The Atlanta school board unanimously approved a long-awaited deal with the city of Atlanta over funding the Beltline Friday, breaking the nearly three-year impasse that had hindered development of the popular trails and parks project.
The agreement goes to the city council Monday for final approval.
The joint announcement by the two sides Friday cleared the dispute that clouded the Beltline’s financial future, though it means APS will collect little more than half of what it was originally promised. With an agreement in place, the Beltline can more easily seek outside funding sources for future development of the trail and transit network.
“A healthy Beltline means a healthier APS,” Mayor Kasim Reed said Friday. “The children of the Atlanta public school system will prosper, Fulton County will prosper and the city of Atlanta will prosper.”
Resolving the issue signals “a renewed partnership” between the city and the school system, APS board chairman Courtney English said.
The agreement brings to an end years of conflict between Reed and school leaders that began in 2013, when the Beltline was unable to make required payments to APS in exchange for using school taxes to expand the urban trail.
Under the new agreement, the school district will get significantly less money than originally agreed to. Instead of payments totaling about $162 million through 2030, the new deal calls for Atlanta to pay $73.5 million through 2031, school officials said. Also, Atlanta would pay all past debts, about $14.8 million, APS officials say. But leaders say it gains more certainty that the school system will actually get paid.
Atlanta already made an initial $9.1 million payment toward its debt in December and is expected to pay another $5.8 million in February. The city would also make an additional $10 million payment next year, according to APS.
The deal brings stability to the Beltline, which has struggled to grow amid financial uncertainty. City leaders have argued throughout the conflict that a stronger Beltline — which they say has already spurred billions in private investment — will result in a higher property tax base to the benefit of all.
The new deal “will allow the Atlanta Beltline to recover from the worst recession in 80 years. And then, when the Beltline is strong and able again, it can make payments at a higher level,” Reed said.
APS will also receive the Bankhead Courts property, a vacant piece of land owned by the Atlanta Housing Authority, English said. The agreement calls for the school district to allow the city to refinance debt connected with another project — the Eastside Tax Allocation District — and for the school district to be paid $593,000 in money owed from that district.
Finally, APS will be paid directly, instead of through the city. The school district will automatically be second in line to get paid — right after bond holders, English said. And the agreement shortens the time limit before the school district can take legal action if the city doesn’t pay.
During negotiations last year, Reed and APS Superintendent Meria Carstarphen clashed over Reed’s refusal to release deeds to vacant APS properties that are held by the city. The agreement announced Friday does not address the deeds.
English said the new deal is more in line with Atlanta’s post-recession economy.
“I think we got a good deal for APS, one that allows us to help our kids right here, right now,” he said.
The Beltline dispute had led to disputes between Reed and APS officials, including former superintendent Erroll Davis, Carstarphen and English. City and APS attorneys also traded threats during the conflict, which also saw Reed and Council President Ceasar Mitchell at odds.
Reed, English and their respective attorneys have worked feverishly in recent months to reach a new accord and prevent the city from breaching the 2009 contract.
Reed’s administration came under fire by at least two Atlanta council members in the process.
Council members Felicia Moore and Mary Norwood cried foul over the nearly $9.1 million payment Reed’s administration made to APS in December. Last year, the council authorized $4 million for negotiations. Moore and Norwood believe Reed’s team circumvented city code by dipping into the general fund for the additional $5 million.
City Attorney Cathy Hampton, who represents both Reed’s administration and the city council, defended the payments as lawful under previous Beltline agreements. Moore, however, maintains that neither the city charter nor existing agreement allows the move.
Still, council members and school officials say they’re eager to put the Beltline saga in the rear view mirror.
The relationship between the Beltline, the city of Atlanta and APS is symbiotic, Mitchell said.
“It will allow us, if we actually move forward together in collaboration, to seize the future and seize the promise of what this city can be,” he said.
The new Beltline deal:
- Under the 2009 agreement, Atlanta was required to make a series of fixed payments totaling $162 million through 2030 to APS, in exchange for using a portion of schools taxes to build the Beltline’s planned 22-mile loop of parks, trails and transit.
- The new deal calls for Atlanta to pay less than half the original amount — $73.5 million — over the same time period. In addition, Atlanta would pay all past debts, a figure APS officials placed at about $14.8 million.
- Atlanta already made an initial $9.1 million payment toward that debt in December and is expected to pay another $5.8 million in February.
- The city would also make an additional $10 million payment next year, according to APS.
- APS will receive the Bankhead Courts property, a now-vacant piece of land owned by the Atlanta Housing Authority.
- The school district will allow the city to refinance debt connected with another project — the Eastside Tax Allocation District — and APS will be paid $593,000 in money owed from that district.
- APS will now be paid through a trustee, instead of from the city. That means that the school district will automatically be second in line to get paid after bond holders.
- The agreement shortens the time limit before the school district can take legal action if the city doesn’t pay.
2005: The city of Atlanta —- then led by former Mayor Shirley Franklin —- enter into an agreement with Atlanta Public Schools and Fulton County to create the Beltline tax allocation district.
June 2006: Attorney John Woodham files a legal challenge to the use of school taxes in tax allocation districts.
July 2006: Atlanta Beltline Inc., the nonprofit overseeing the buildout, is formed.
Feb. 2008: Georgia Supreme Court sides with Woodham.
Nov. 2008: State legislature takes issue to a referendum, and voters approve the use of school property taxes for TADs.
2009: State legislature changes Georgia constitution in accordance with the referendum.
Aug. 2009: City and APS strike an amended deal, upping the amount of money the Beltline TAD would send to APS.
Nov. 2009: City and APS sign a second amendment to the contract.
2012: City officials make moves to renegotiate terms of the deal.
Oct. 2012: The Beltline’s Eastside Trail opens near Piedmont Park.
Dec. 2013: The Beltline TAD makes its first payment of $1.95 million, originally due Jan. 1.
Jan. 2014: APS Chief Financial Officer Chuck Burbridge sends letter to city suggesting ways the Beltline debt can be paid, including by giving APS the Civic Center. Atlanta withholds a $6.75 million payment due this month.
June 2014: Outgoing Superintendent Erroll Davis, in an interview with the AJC, says all options are on the table for resolving the debt, including a lawsuit. Atlanta Mayor Kasim Reed slams Davis for threatening litigation, saying: “Nobody’s going to negotiate at the end of a gun. So, if you’re going to take hostages, you’d better be ready to shoot the hostages.” Atlanta Council President Ceasar Mitchell calls for truce in deal.
July 2014: APS and Atlanta City Council members meet to discuss the conflict.
August 2014: Documents emerge showing that attorneys for Atlanta and APS traded threats and barbs over the Beltline conflict.
Nov. 2014: The Beltline’s $43 million Westside Trail breaks ground in Southwest Atlanta.
Dec. 2014: APS parent groups call on city council members to sign pledge to pay APS what it was owed per the existing contract.
Jan. 2015: Atlanta withholds another required payment, worth $6.75 million. Reed and Mitchell spar on radio and television over Mitchell’s proposal to set aside millions from the city’s reserves to pay APS, pending a new deal.
Feb. 2015: APS Superintendent Meria Carstarphen says Reed is withholding deeds to surplussed school property, preventing APS from being able to sell the vacant buildings. Reed says Carstarphen “doesn’t know what she’s talking about” and says the deeds are part of Beltline negotiations.
March 2015: State Sen. Vincent Fort, D-Atlanta, weighs in on Beltline dispute, introducing a bill that would require the Beltline to first pay the school district before spending money on development.
May 2015: Atlanta Beltline Inc. CEO Paul Morris says the dispute is harming the Beltline’s ability to grow by halting its ability to get loans or sell bonds.
Dec. 2015: Reed’s administration makes a $9.1 million “good faith payment” to APS as the talks continue.
Jan. 2016: Atlanta City Council members Felicia Moore and Mary Norwood raise questions about the payment, asserting Reed circumvented city code by spending money without prior authorization. City Attorney Cathy Hampton defends the payment as lawful.
Jan. 29: Reed