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‘Blight tax’ moves toward approval
Incentive program wielding both stick and reward
City of Statesboro seal

Statesboro City Council on Tuesday evening unanimously moved the proposed “blight tax” ordinance, properly the Community Redevelopment Tax Incentive Program, forward to a second reading.

As now set for potential adoption Dec. 3, the ordinance would apply a sevenfold penalty tax to specific vacant, neglected properties after a lengthy process. Because the special tax would be added on top of the regular property tax, the result would be a total tax eight times the city’s regular millage rate.

But this would follow at least 12 months of communication between the city and affected property owners. That would begin with notices from city code compliance officials to the owners, seeking to have them remove or repair dilapidated buildings, for example. After inspections or a citywide survey, city staff would annually present a list of buildings and sites proposed to be designated “blighted,” with detailed information on each, to City Council.

If the council approved the designation, the owners would be entitled to a hearing in Municipal Court.

“Before it would even get before the mayor and council there would be a year of the designation by the code compliance officer and that opportunity for the property owner to remediate the property,” City Attorney Cain Smith said during Tuesday’s 5:30 p.m. regular meeting.

 

Penalty tax

The tax penalty would be imposed if the council listed a property as blighted and the court approved. On a property with a market value of $100,000, assessed for taxes at Georgia’s standard 40% of value, Statesboro’s regular rate of 7.308 mills amounts to a $292 tax. So, the added penalty tax would be $2,046 on a blighted site worth $100,000.

This penalty phase would be followed by a reward phase for owners who bring blighted properties up to the city’s standards.

In the version of the ordinance tentatively accepted by the council Tuesday, the reward will be a three-year, 50% abatement of the regular city property tax, as well as removal of the penalty tax.

The vote to affirm the first reading – with modifications from earlier versions – came during Tuesday’s regular meeting. But the discussion had begun during a 4 p.m. open work session at Joe Brannen Hall, which is next-door to City Hall.

Discussions of forms of this ordinance have been occurring off and on for eight months. Tuesday’s wasn’t even the first “first reading” approved. Council accepted one on a 3-1 vote Sept. 3, but then suggested substantial changes, requiring a new first reading.

 

Simplified plan

To allow council members to decide between options Tuesday and move to a second reading, Smith included some alternative wording in red.

One of the alternatives was the simplified tax abatement in the reward phase.

The previous draft would have linked the duration of the tax break to the amount of money the owner spends to upgrade a property. That version called  for a one-year, 50% abatement for improvements costing up to $25,000, a two-year abatement for $25,001 to $50,000 of  improvements, a three-year abatement for $50,001 to $75,000, and a maximum four-year abatement for more than $75,000 spent.

That now-abandoned approach had been modeled on Savannah’s ordinance.

 

Albany & Vienna

The simpler, three-year 50% abatement is copied from the incentive programs used by the Georgia cities of Albany and Vienna, Smith noted.

However, Albany and Vienna use a lower multiplier, triple the regular millage rate, for the front-end penalty tax. At this point Statesboro is poised to follow the example of Savannah and some other cities on the higher penalty multiplier, while adopting the simpler reward abatement.

During the work session, Smith noted that the simpler approach used by Albany and Vienna would eliminate the need for city employees to verify the amount property owners spend on improvements.

“If it’s brought up to code, regardless of how much it costs to get there, it’s a three-year abatement, and that sort of mechanism would absolutely cut down on the staff hours required,” Smith said.

Mayor Jonathan McCollar said he liked this aspect of the tax incentive program as providing “positive behavior support.” But he still voiced objections to the “punitive” first phase with its multiplied tax rate as potentially counterproductive.

Another option would have allowed for different rates for commercial and residential properties. That was dropped after District 3 Councilman Jeff Yawn, who had asked about this at a previous meeting, said he did not see a need to distinguish between property types.

 

No occupied homes

Occupied homes will not be targeted for a penalty tax using this ordinance, officials have repeatedly said.

As City Manager Charles Penny noted during the work session, a property must meet at least two conditions from a list of six to qualify as blighted. One of the conditions is that the property is an “uninhabitable, unsafe or abandoned structure.” Another is “inadequate provision for rain, ventilation, light, or sanitation.”

Other conditions refer to sites requiring Environmental Protection Agency-sanctioned cleanup, posing imminent danger from storm damage or where crimes repeatedly occur, as well as those remaining below public code standards for at least one year.

Under the Georgia law that allows blight-reduction tax incentive programs, the penalty tax cannot be imposed for aesthetic reasons.

“Just because you don’t like the color of somebody’s house, you can’t use the blight tax there,” Penny said during the work session.

Before the session ended, he called the “blight tax” phrase “slang” and suggested that he and the other city officials should use the formal name of the incentive program instead.

 

‘Extreme circumstances’

“This would be a tool in the toolkit, but it would probably be (used in) very extreme circumstances,” Penny told the elected officials. “Basically, you can use this for somebody that’s thumbing their nose at you and you’re trying to get someone to come into compliance.”

District 1 Councilman Phil Boyum, who first proposed a “blight tax” in early March, again made the motion to move the proposal, with chosen alternative, forward to a second reading. District 5 Councilman Derek Duke seconded, and the vote was 5-0.

Herald reporter Al Hackle may be reached at (912) 489-9458.

 

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