LaGrange approves agreement for new TAD
Published 10:15 am Thursday, December 15, 2022
The LaGrange City Council approved an agreement that will allow for the city’s sixth Tax Allocation District (TAD) at its meeting on Tuesday evening.
The TAD is for the proposed LaGrange Logistics Redevelopment Plan that would provide warehousing on 376 acres between Whitesville and Hamilton Rd.
During the previous work session, City Attorney Jeff Todd explained that bonds would be issued for the TAD rather than the other “pay-go” TADs the city has primarily approved. With a pay-go TAD, the money collected is turned over to the developer every year as funds come in.
For TAD #6, the plan is to issue bonds to pay for the redevelopment, which will be limited to $20 million plus interest and professional fees.
The bonds will primarily pay for the main road for the redevelopment. If there are funds left over, they could be used to pay for public sewer additions.
The TAD agreement has an automatic termination clause if the bonds haven’t been issued by the end of 2025. Likewise, if the developer, Selig-Interstate Partners of LaGrange, doesn’t get a building permit to start any of the big private projects that are planned by then, TAD will automatically terminate.
The bonds will be paid for using incremental property tax increases as improvements are done to the property.
“Theoretically, it’s a tax abatement, because at the end of everything they’ll be paying fewer taxes, but we’re setting whatever that property is worth this year. They’re going to pay tax on that,” Todd said. “When they spend a bunch of money out there and the tax revenue goes up, they get that increment back to pay the bonds back. Once the bonds are paid back, it will be taxed as normal.”
Since the City of LaGrange doesn’t have a property tax it won’t be giving up any potential tax increments. The county and school board would need to have to agree to give up their incremented tax revenue.
If the TAD is approved, the City of LaGrange would issue the bonds, but the developer will be responsible for repaying the bonds.
The city’s credit rating should not be harmed if the bonds aren’t repaid, but it could affect the city’s reputation.
“We are associated with it my name,” City Manager Meg Kelsey said. “Although they’re not our responsibility, our name would be attached to it.”
The Troup County School Board discussed the TAD at its work session and is expected to approve the intergovernmental agreement at the regular meeting on Thursday.
The Board of Commissioners is expected to discuss the TAD at its Dec. 20 meeting.