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Official: Beltline ruling could devastate redevelopment

LAWRENCEVILLE - A Supreme Court ruling involving Atlanta's proposed Beltline could be the "death knell" for Gwinnett's revitalization hopes, said Chuck Warbington of the Gwinnett Village Community Improvement District.

In the ruling, justices decided the city of Atlanta can't use tax revenue earmarked for schools to help fund a multibillion dollar redevelopment project known as the Beltline.

According to the Associated Press, the high court said the use of school funds for non-educational purposes violates the Educational Purpose Clause of the state Constitution.

Warbington said that means the amount of money that could be produced in a tax allocation district would be cut in half.

"It's just totally devastating any redevelopment here," Warbington said of the ruling.

Last November, nearly a dozen local cities passed referendums to allow the districts, which use the expected boost in property tax values from redevelopment to back bonds to fund infrastructure improvements. The cities of Norcross, Lilburn, Duluth, Buford, Suwanee and Sugar Hill were moving forward with projects, but would need permission from the county commission and the local school board to earmark much of the expected revenues.

After a failed referendum in 2006, county officials were pursuing a July vote to consider the tool again. It was not immediately clear whether those plans would move forward, but Warbington said the ruling could severely hamper a proposed redevelopment of OFS property along Interstate 85.

"Unless the Legislature addresses it, it's going to kill TADs in the entire state," Warbington said.

Commission Chairman Charles Bannister said he was unsure of all the implications at this point, but he said he would recommend the county goes forward with its vote.

"There's a lot at risk in the issue. It could be (devastating). Then again a door closes and a window opens. I would look at it as a future opportunity," he said. "We will see where this goes."

Lilburn developer Emory Morsberger, who is pursuing a tax allocation district to redevelop Atlanta's City Hall East, was not available for comment Monday evening.

As for the Beltline, it wasn't immediately clear how the ruling will affect the $2.8 billion project, which seeks to transform old railroad lines surrounding the city's urban core into a mixed use development.

The project would use miles of railroad segments to link together parks, trails, transit and new development. Atlanta created a specific area, called a tax allocation district, and authorized the use of educational ad valorem property taxes collected from the area to help pay for the project. The school system agreed to participate.

However, a Fulton County resident objected, arguing that the use of school taxes as security for the sale of bonds to support the project was unconstitutional. A lower court overruled the objections, but the state Supreme Court, in its unanimous decision, sided with the resident, John Woodham.

The Associated Press contributed to this report.