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'Private cities' measure back before lawmakers

ATLANTA - Last year, they were "community development districts."

This year, they're "infrastructure development districts."

But to critics, legislation that would let developers use quasi-governmental powers to finance and build new communities in undeveloped areas across Georgia still goes by the more pithy sobriquet "private cities."

For the second consecutive legislative session, Republicans are pushing a bill and accompanying constitutional amendment that would allow landowners to finance the roads and water and sewer lines needed to create large developments.

Subject to the approval of affected cities or counties, property owners would form districts governed by boards with the power to float bonds that would be repaid through taxes, fees and assessments levied on the residents.

But this year's legislation features a new twist.

An exemption that opponents say is unconstitutional would prohibit districts from being formed in counties that have imposed caps on property tax rates.

That means the bill would not apply to Oaky Woods, a formerly state-owned tract in Houston County that became a focus of controversy in last year's gubernatorial campaign.

"It has nothing to do with millage rate caps," Neill Herring, a lobbyist for the Georgia chapter of the Sierra Club, told a Senate committee last week. "It has to do with keeping Oaky Woods out of consideration for this program."

Answer to growth

Supporters see the legislation as a solution to Georgia's perennial growing pains.

Sen. Johnny Grant, R-Milledgeville, chief sponsor of the bill and amendment, said other fast-growing states - notably Florida - are using infrastructure improvement districts to finance the building blocks of development that many local governments can't afford on their own.

"These IDDs have helped new communities develop without burdening local governments with the costs of infrastructure," he said. "They're the perfect impact fee."

While helping underwrite the costs of growth, the districts don't usurp the authority of cities or counties, Grant said. Thus, it's a "misnomer" to call them private cities, he said.

"Local governments maintain zoning, permitting, land use and police powers," he said.

Clint Mueller, legislative director of the Association County Commissioners of Georgia, said the legislation would particularly benefit rural Georgia.

For one thing, there are large areas of undeveloped land in rural counties. Also, rural communities don't have the tax bases to provide adequate services to large planned developments, Mueller said.

"It's a financial tool ... a way of ensuring public infrastructure is there when these things are created," he said.

Too much paving

But Deborah Miness, vice president of land programs for The Georgia Conservancy, said any financing mechanism that encourages development in rural areas would only increase the "leapfrog development" that is engulfing more and more of the state's pristine land.

She said 39,000 acres are being paved over every year in Georgia, harming water quality and diminishing wildlife habitats.

"We believe this would accelerate this alarming trend," she said.

At the same time, other opponents question whether infrastructure development districts could create a demand for housing in rural communities that lack an obvious draw.

"I don't know if I go to Talbot County and do one of these things, that it would necessarily stimulate growth," said Senate Minority Leader Robert Brown, D-Macon. "I don't know that you can in isolation stimulate growth."

Herring advanced the flip side of that argument. He said the areas where private cities would be most suitable, fast-growing counties in the far suburbs of major cities, don't need such a financing mechanism.

"They're all developing anyway," he said.

Consumers beware

Herring and others also are skeptical of the consumer protections built into the legislation, including disclosure requirements and caps on the fees and assessments residents pay.

Allison Wall, executive director of Georgia Watch, a consumer watchdog group, derided the bill during last week's committee hearing as "predatory lending for middle-class retirees."

She criticized a provision that exempts the bill from the state's cap on interest rates and another section stating that homeowners' costs are subject to fluctuation.

"I can't find any remedy in the bill for the property owner," Wall said.

But Sen. John Wiles, R-Marietta, chairman of the State and Local Governmental Operations Committee, said the law has not been abused in the states that have it on the books.

"It's drawn tight enough that what you're talking about has never happened in the United States," Wiles told Wall shortly before his committee approved the bill and constitutional amendment in separate 6-2 votes.

Oaky Woods exempt

Mueller said the bill's exemption for counties that have caps on property tax rates would apply to Houston, Columbus-Muscogee and Augusta-Richmond counties.

He said voters in those communities approved the caps, so it would be wrong to impose legislation on them that could lead to higher taxes on some homeowners.

But Herring said supporters of private cities simply don't want the Oaky Woods property drawn into the debate on the legislation, even though it's the sort of property for which the bill is tailor-made.

Protected for years as a state wildlife management area, Oaky Woods was put up for sale several years ago by its timber company owners.

The state Department of Natural Resources had identified the site as a top priority for acquisition, but Gov. Sonny Perdue said the state couldn't afford it because of a budget crunch.

The land ended up being sold to a group of Houston County developers.

After news reports last fall revealed that Perdue had bought 101 acres adjacent to Oaky Woods to expand his home property, Democratic gubernatorial candidate Mark Taylor made it a campaign issue.

The Southern Environmental Law Center charged last week in a memo that the exemption is unconstitutional.

But Mueller said the ACCG's lawyers have reviewed it and believe it to be legal.