By Joel Hall
This week, Riverdale city officials reported that the Riverdale Town Center project -- a planned mixed-use community expected to boost the city's economy -- will most likely have a $20 million price tag.
Recently, the city council narrowly approved a funding scheme that will require the city to borrow against the $17 million it expects to receive from the 2008 Clayton County Special Local Option Sales Tax (SPLOST).
Last Monday, the mayor and council voted 3-2 to approve a plan which will use certificates of participation (COPS) and SPLOST revenue to finance the building of the Town Center's community center, public plaza, amphitheater, and new City Hall complex. Over the six years of the impending SPLOST, the city will back the COPS with the entire $17 million of its SPLOST revenue.
Officials plan to pay off the remaining $3 million over the course of 20 to 30 years using money from the city's general fund. Iris Jessie, Riverdale city manager, said because the project will rely heavily on COPS, the city has little to lose and much to gain.
"There are people who purchase the bonds and that's what generates this pool of money, which provides project finances," said Jessie. "These are not general obligation bonds. Your private investors are the ones who take on the risk, rather than the municipalities.
"We are backing these certificates of participation, a portion with our SPLOST proceeds," Jessie continued. "Usually, what we have to do is pay debt services out of the general fund. Under this, we are backing it with our SPLOST proceeds."
In addition to COPS and money borrowed from the SPLOST, Jessie said the project will be partially funded by Community Development Block Grants (CDBGs). The city is presently choosing not to make the Town Center a Tax Allocation District (TAD), due to a Georgia Supreme Court decision earlier this year prohibiting school districts from contributing their tax revenues to TADs.
Jessie, however, said the question concerning school board participation in TADs will be on the Nov. 4 ballot, and thus, Clayton County Public Schools may provide another avenue of funding for the Town Center.
Despite the backing of city hall staff, members of the city council have been bitterly divided about the Town Center. Various resolutions favorable to the project have passed by a tie-breaking vote from Evelyn Wynn-Dixon, Riverdale's mayor.
Council members Wanda Wallace and Kenny Ruffin have generally voted in favor of the project, while council members Rick Scoggins and Wayne Hall have, at times, challenged the project.
Scoggins said he is "not against the project," but "against the way it has been presented." He believes, given the state of the economy, the project is a risk the city can't afford.
"I don't think the council has definite control as to how finances are going to be obtained," said Scoggins. "I don't see any other cities in this area that are proceeding with this type of project. There were four or five funding sources presented at the meeting. None of them seem to be viable ... nothing is in concrete."
Scoggins said he worries that rising foreclosure rates and the school system's loss of accreditation may impact that city's ability to retrieve funding from the 2008 SPLOST. He believes the city should be more conservative with its spending.
"This is the worst the economy has been in decades,"he said. "Now is not the time to proceed with this lavish spending in my opinion. This is the time to make due until things get better. Why would you proceed with this transaction, knowing that you don't have the money to proceed?"
Ruffin, however, believes that, with 64,260 cars passing through on Highway 85 daily, and Riverdale experiencing a 23 percent spike in population since 2000, the city needs more local employment options.
"The city is still growing amongst what is going on nationally," said Ruffin. "The way to get out of any economic depression is that you have to create jobs, and this is an economically viable way to do this. We've got to do something to determine our own fate."
"With the type of financing we are doing, we feel comfortable going forward with this ... the percentage of COPS in Georgia that have defaulted is zero," said Ruffin. "Our goal as elected officials is to improve the quality of life for the citizens, and we feel this will go a long way toward that, not only for the citizens of Riverdale, but for anybody who comes through this community."