This document summarizes tools for financing brownfield redevelopment projects in Georgia, including preferential property tax assessments, incentive stacking, and tax increment financing (TADs). Preferential assessments allow frozen property values for up to 10 years or until tax savings equal cleanup costs. Incentive stacking combines preferential assessments with tax-advantaged leaseholds. TADs use future tax revenue from development to finance infrastructure and remediation, as demonstrated by the $2 billion Atlantic Station project which redeveloped a 138-acre brownfield into a mixed-use center through a $270 million TAD bond.

1. TOOLS FOR FINANCING BROWNFIELDS
CORRECTIVE ACTION PLAN
Presented by:
Douglass P. Selby, Esq.
Hunton & Williams LLP
June 4, 2015

2. Overview
Preferential Assessment for
qualifying brownfield property
Stacking Incentives (preferential
assessment + tax advantaged
leasehold assessment)
Tax Increment Financing (TADs)

3. Preferential
Assessment
Qualifying Properties
property has preexisting release of
hazardous material,
Georgia EPD has satisfied and settled all
liens filed against the property,
property does not fall under certain Federal
environmental programs, including the
Comprehensive Environmental Response,
Compensation, and Liability Act (CERCLA),
and
property is not a hazardous waste facility

4. Preferential
Assessment
Must Be An Eligible Prospective Purchaser
person intending to acquire a property interest in a
property where there is a preexisting release, whether
such interest is exclusive or possessory, including:
title holders, and
leasehold tenants
prospective purchaser (including any affiliates) must not
have contributed to a preexisting release
prospective purchaser must not be in violation of
environmental laws
prospective purchaser must obtain EPD Director’s
approval of a “corrective action plan” or concurrence with
“certification of compliance”

5. Preferential
Assessment
Special Ad Valorem Taxation for Qualifying
Brownfield Property
ad valorem tax abatement up to the certified eligible
brownfield cleanup costs:

property value of a brownfield site may be frozen at
the value of such property prior to redevelopment
for 10 years or until the property realizes ad
valorem property tax savings equal to the certified
costs of the cleanup, whichever comes first

preferential assessment begins in year following
filing of certification with County Board of Tax
assessors

6. Preferential
Assessment
Applying for Preferential Assessment
1) obtain certification from Georgia EPD
2) apply to County Board of Tax Assessors (BOTA)
3) BOTA shall grant preferential assessment upon
determination of compliance with O.C.G.A. § 48-5-
7.6
4) failure of BOTA to make determination within 90
days deemed approval
5) may appeal any denial

7. Incentive
Stacking
increased emphasis on adaptive reuse and
urban renewal
business increased use of location
consulting
need to combine incentives
Development Authorities asked to consent
to brownfield preferential assessment and
tax-advantaged leasehold

8. Incentive
Stacking
Consider O.C.G.A. § 48-5-7.6(e)(1) provisions
governing “disqualification” of preferential
assessment upon:
1. notice by taxpayer to local taxing authority to
remove preferential assessment
2. sale or transfer to person exempt from property
taxation or making property exempt from
property taxation, except a sale or transfer to
a DDA, URA, JDA or housing authority
3. the later of 10 years or extended preferential
treatment (15 years)
4. tax savings = certified costs of cleanup costs

9. Incentive
Stacking
Practical Considerations:
1) Work closely with County BOTA
2) Overlapping abatement schedules with same
commencement taxes
3) Statute contemplates Brownfield certification
before creating Tax-Advantaged Leasehold

10. Incentive
Stacking
- Tax Advantaged Leasehold Savings
100%
1 2 3 4 5 6 7 8 9 10 yrs
Hypothetical Incentive (Fulton County, GA)
50%
FMV

11. Incentive
Stacking
Tax Savings
----- = Brownfield Assessment = Taxable Base
xxx = FMV after Development
$Mill
20
15
10
5
1 2 3 4 5 6 7 8 9 10
yrs
-xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx-
-----------------------------------------------------------------------------------
PREFERENTIAL ASSESSMENT
FMV

12. Incentive
Stacking o Tax Savings = Difference between amount of taxes paid on
Taxable Base and taxes due on FMV of Qualified Brownfield
property
o Work with BOTA to determine calculation
o Year 1 under Lease = 50% of FMV; with ramp-up
Year 1 under Brownfield = Taxes due on Taxable Base
o Pay lower of two?
o When Brownfield Tax Savings = Eligible Brownfield costs,
convert to Tax Advantaged Leasehold Schedule?

13. TADs
10 Tax Allocation Districts
To date, approximately $560 million in
TAD bonds have provided gap
financing for over $3.4 billion in private
development
Assessed property values in TADs
have grown 20% since 1998 while City
of Atlanta has grown at 5%
A new TAD cannot be created nor can
an existing TAD be expanded if the
TAD property tax digest exceeds 10%
of the total City tax digest
Atlanta’s existing TAD property tax
digest has grown to over 15%.
City of Atlanta TADs

14. TADs How Do TADs Work?

15. TADs Atlantic Station – Overview
• Redevelopment of 138-acre former Atlantic
Steel Mill brownfield site into a $2 billion
regional mixed-use office, retail and
residential center.
• During the 1950s the 138-acre steel mill
employed 2,300 people and produced
750,000 tons of steel products a year.
• The mill was forced to scale back
operations as the domestic steel industry
collapsed in the early 1980s.
• By 1997, only 400 people were employed
by the Atlantic Steel Company. Operations
ceased the following year.
• Several master plans were devised by
Jacoby Development Inc. and AIG Global
Real Estate with a final master plan
coalescing in 1998.

16. TADs
Atlantic Station – Development Hurdles
•Environmental Issues:
- Pre-development conditions
included 160,000 tons (9000 dump truck
loads) of steel slag contaminated soil
that had to be removed from the site.
- Solution: In 2001, a $76.5MM TAD
Bond was issued to fund environmental
remediation. The GAEPD monitored the
process and in December 2001 issued a
Plan Certification Report declaring the
property remediated.
-The US EPA initially stopped the
construction of new bridges and roadways due
to Atlanta’s non- compliance with the Clean
Air Act.
- Solution: JDI-AIG suggested that the
project was a smart growth project and,
in effect, a Transportation Control
Measure (TCM). This allowed the EPA to
provide an exception to the project as a
part of the Project XL program, and
development continued.

17. TADs
Atlantic Station – Financing
$270MM projected infrastructure costs
$166MM TAD Bond issued in 2006 for site
prep, infrastructure, 7200 space parking
deck and utilities
$61MM in state and federal subsidies
(CMAQ, USDOT, GDOT) to fund multi-modal
17th
Street Bridge over the Downtown
Connector, 17th
Street improvements and
R/W acquisition
$19.7MM from City of Atlanta Water and
Sewer Fund to upgrade storm water
infrastructure and construct detention pond

18. TADs
Atlantic Station – Today
•Although the development is not complete,
it contains 1.4 million ft. of class A office,
3600 residential units, 1.3 million ft. of
retail, 101-room hotel and 15,000+ jobs.
•Pre-redevelopment property taxes =
$300,000/yr. Currently generating $30MM+
in property taxes and $10-$20MM/yr. in
sales tax.
•Atlantic Station also hosts many events
including the BB&T Atlanta Open Tennis
Tournament, Cirque De Solei, and Ice
skating in the winter.

19. TADs
Atlantic Station – Benefits and Lessons Learned
•Atlantic Station was honored as “the nation’s
best brownfield redevelopment” with the EPA’s
Phoenix Award in 2004.
•As one of the earliest and largest examples of
brownfield remediation and redevelopment,
Atlantic Station serves as a national model.
•The overlapping complexity of local, state, and
federal level planning and regulatory approvals
highlights the importance of collaboration
between project stakeholders.
•The scale of the Atlantic Station
redevelopment, which included significant
brownfield remediation, necessitated a public-
private partnership between JDI-AIG and the
City of Atlanta to secure the $2 billion needed
for the project financing.

20. Douglass P. Selby, Esq., Hunton & Williams LLP
Acknowledgement to Invest Atlanta for Atlantic Station slides