TAD study identifies two possible areas in initial screening

Presentation slide showing potential areas for a tax allocation district in Henry County (county photo)

Henry County is exploring the creation of tax allocation districts (TADs) and two areas have been identified as possible candidates in the initial screening. The TAD study is a secondary component of the megasite master plan.

The possible candidates are the North Henry corridor, located around the intersection of state route 138 and US 23 / SR 42, and the Jodeco Road corridor. The areas qualify based on the age of existing commercial structures and the possible opportunity for redevelopment.

The county’s consultant is continuing the TAD study and will take a closer look at the two areas to see if TADs are viable. The study’s completion is expected in 2020.

What is a TAD?

Tax allocation districts allow local governments to direct future property tax collections towards the cost of infrastructure improvements now. They are often utilized in blighted or deteriorating areas where the increased property tax collections following redevelopment are sufficient to pay off the upfront investments.

Infrastructure improvements can cover a variety of tasks including road projects, water and sewer lines, land clearing and grading, property acquisition for public use, and environmental remediation. The funds to finance these improvements are most often secured through tax allocation bonds.

Local governments do not lose any property tax revenue when a TAD is created. Instead, the tax revenues paid to the county are frozen with future increases in the annual tax bill going towards the TAD bonds.

Are TADs different from CIDs?

Tax allocation districts are a different mechanism than community improvement districts, though the two are often used in tandem with each other. Community improvement districts are formed when a collection of commercial and industrial property owners voluntarily agree to self-tax themselves an additional millage rate.

The additional property tax collected in CIDs can be used towards infrastructure improvements and are often utilized as a local match to help secure state and federal funding in a community. CIDs are self-governing bodies with boards elected from within their membership.

Henry County’s first community improvement district is awaiting a vote from the board of commissioners to finalize its creation. The board held a joint meeting with the Henry County Development Authority in November to discuss the district in more detail.

The proposed CID consists of fifteen properties generally located along Declaration Drive and Greenwood Road. The proposed district could generate up to $231,613.68 in annual collections if the owners self-imposed the maximum of five mills.