At a time when many communities around the nation are struggling to finance improvements to their roads, bridges, and basic infrastructure, Atlanta has built a striking new model to fund a visionary investment: the Atlanta BeltLine, a nearly $3 billion system of streetcars, parks, and multiuse trails that will encircle some 45 neighborhoods in and around the city’s core.
The project is mammoth in its physical dimensions: The BeltLine will reclaim 22 miles of old rail lines for a streetcar system that will surround and traverse the city center. Thirty-three miles of walkable trails will follow the rail corridor and spur off from it, linking parks and neighborhoods. The BeltLine will also connect to MARTA, Atlanta’s regional public-transit system.
“It is a very ambitious project,” said Joseph Kane of the Metropolitan Policy Program at the Brookings Institution. “It does say something for a city such as Atlanta that’s typically known as a sprawling metro that it is taking on a project like this to innovate locally.”
But the project may be even more innovative in its financing. National Journal honored the BeltLine project because of the creative ways its sponsors are constructing a massive, potentially transformative, infrastructure project at a time when squeezed public budgets have grounded many other worthwhile projects in the United States.
Planners have pulled funds to pay for the $2.8 billion project from a constellation of sources. The first money came from a Tax Allocation District established in 2005. The city, Fulton County, and the Atlanta City Schools created the 25-year district to raise more than $1 billion. (A TAD is a defined area where real-estate tax revenues over a certain threshold—in this case over 2005 levels—are used to fund a specific improvement.) The district, drawn to exclude single-family homes, includes 6,500 acres of underused or abandoned industrial properties around the rail line.
At the same time, the city of Atlanta invested $146 million from park bonds and capital-improvement project funds to acquire necessary land, to pay for design, and to begin park construction. Planners then raised money from the philanthropic community—some $42 million so far. Federal transportation funds added an additional $25 million for environmental analysis, preliminary engineering, and improvements to the street grid to make neighborhoods in the planning area more walkable and livable.
For the final piece of the funding puzzle, the city has floated bonds and established a system to repay them from the increased tax revenue that the project is expected to spur in both expanded development and rising property values. To minimize the risk that development will not rise to the level necessary to repay the bonds, planners base their projected revenues on projects that are already in the ground, said Ethan Davidson, a spokesman for Atlanta BeltLine Inc., the entity charged with planning and implementing the project. Every few years, the project reevaluates TAD growth and determines how much new bond financing it can support.
“There’s not one entity or one fundraising source,” said Rob Brawner of the Atlanta BeltLine Partnership, an organization that raises money and garners public support for the project. “It really is a true model of a public-private partnership. The whole is greater than the sum of the parts.”
The early returns are promising: Six years into the project, three sections of trail—spanning nearly six miles on the city’s southwest, north, and east sides—have been built, Davidson said. The first streetcar line—a 2.7-mile loop connecting Centennial Olympic Park and the Martin Luther King Jr. historic district—will open in 2014. The early activity has spurred about $1 billion in private real-estate development within the Tax Allocation District, said Lisa Gordon of Atlanta BeltLine Inc. “There’s no tax incentive or subsidy,” she said. “That’s completely private investment.”
Over time, planners hope the BeltLine will create 30,000 full-time and 48,000 one-year construction jobs, and add $20 billion to the tax base. They also hope to build more than 5,600 units of affordable housing.
The project has experienced some setbacks. Two BeltLine executives resigned in 2012 after The Atlanta Journal-Constitution disclosed questionable expenditures by the organization. In July, metro Atlanta voters rejected a transportation tax that was intended to raise $7.2 billion—about $600 million of which would have gone toward building 10 miles of streetcar lines on the BeltLine. Although the money would have helped, the defeat did not threaten the project, Davidson said. That resilience only underscores its planners’ success in formulating new ways to finance needed infrastructure during a time of chronically tight public budgets.
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