Porterdale TAD #1: A Critical Analysis
An evidence-based examination of why the proposed Tax Allocation District #1 Redevelopment Plan may not serve Porterdale's best interests
The Revenue Diversion Problem
The draft plan proposes capturing future growth in property taxes within the 396.5-acre Tax Allocation District and placing those funds into a special account rather than flowing to the city, county, or school system. This represents a massive diversion of public revenue.
The Cedar Shoals development alone could generate approximately $142.9 million in municipal and county property taxes over 30 years. However, the plan reveals that only $925,000 of this amount would continue flowing to general funds. The remaining balance—over $141 million—would be diverted to the TAD special fund to reimburse developers and pay for infrastructure.
Effectively, Porterdale would be surrendering decades of tax growth in exchange for uncertain future benefits. This arrangement prioritizes private development reimbursement over essential public services including police, fire protection, parks, and educational facilities.
$143M
Total Tax Revenue
Projected from Cedar Shoals over 30 years
$925K
City Keeps
Less than 1% flows to general funds
$141M
Diverted
Goes to TAD fund for developer reimbursement
The Financial Leverage Gap
The plan estimates $96.5 million in "eligible redevelopment costs" across Cedar Shoals and other projects. Even under the most optimistic assumptions—including full county and school participation and a 6.5% discount rate—the financial math simply doesn't add up.
Net Present Value
All tax increments total approximately $59 million under best-case scenarios
Realistic Leverage
Only 65-75% of NPV is actually leveragable in practice
Actual Funding
TAD would provide just $38-$45 million toward costs
Coverage Gap
Covers no more than 46% of eligible project costs
This leaves a massive funding gap. Developers and the public would need to find tens of millions of dollars elsewhere, yet Porterdale would still be surrendering its tax base for up to 25 years. The city assumes virtually all the downside risk while providing less than half the necessary funding.
Locked In for a Generation
25-30 Year Commitment
Georgia law requires a TAD to remain in place until all redevelopment costs and debt service are paid in full. The plan anticipates a term of 25 to 30 years—essentially a generation.
During this extended period, the city council cannot dissolve the district unless all financial obligations are satisfied. This means Porterdale would be locked into the arrangement even if:
  • Community priorities shift significantly
  • The development project falters or stalls
  • Market conditions deteriorate
  • Better opportunities emerge elsewhere
  • Unforeseen public needs arise
This inflexibility represents a severe constraint on local governance and the ability to respond to changing circumstances.
Built on Optimistic Assumptions
The financial forecast relies on a long list of optimistic assumptions that may not materialize. Each assumption introduces risk, and the compounding effect could dramatically undermine projected outcomes.
Rapid Build-Out
Assumes Cedar Shoals development proceeds on schedule over 10-15 years without delays, market disruptions, or financing challenges
Soaring Property Values
Projects tax digest growth from $3.14 million to $141.6 million—a 45-fold increase that depends on sustained market strength
Stable Millage Rates
Assumes tax rates remain constant despite potential pressure to raise rates to compensate for diverted revenue
Full Partner Participation
Requires Newton County and the school district to fully participate without demanding compensatory payments
No Developer Abatements
Doesn't account for developers potentially seeking tax abatements that would further reduce available revenue
The plan itself acknowledges that market cycles, assessment lags, and other factors could reduce or delay tax increments. If these rosy projections don't materialize, Porterdale will have already pledged its tax growth to a project that may not deliver.
Pay-As-You-Go: Handing Money to Developers
No Bonds, No Leverage
The city anticipates using annual reimbursement agreements instead of issuing traditional tax-exempt bonds. This "pay as you go" approach would simply hand future tax increments directly back to developers as revenue comes in.
Without bonds, the city cannot leverage the revenue stream to build community amenities up front. This means residents see few tangible benefits until the project reaches completion—potentially decades away.
1
Tax Revenue Generated
Property taxes flow into TAD fund annually
2
Direct Reimbursement
Funds immediately paid to developers
3
Minimal Public Benefit
Community sees little until completion
Impact on Schools and Public Services
National and local reporting on Tax Allocation Districts reveals why school districts express serious concerns about these schemes. The evidence from other jurisdictions provides a cautionary tale for Porterdale.
"When you extend these TADs, none of the schools are going to get tax dollars. Counties may need to raise property taxes to make up for diverted revenue."
— Atlanta tax policy experts, as reported by Axios
The Atlanta Civic Circle notes that TADs redirect property tax growth away from schools, healthcare, and public safety, giving it instead to private developers. Porterdale's plan would similarly withhold the majority of new property taxes from the Newton County School System and Newton County itself.
68%
School Impact
Typical percentage of diverted revenue that would have gone to schools
1407
New Homes
Cedar Shoals units that will demand school services
25-30
Years
Duration schools forfeit this revenue stream
The forecast estimates that hundreds of new homes and apartments could significantly increase demands for educational services, infrastructure, public safety, and other government functions. Yet the revenue to support these services would be diverted to developer reimbursement instead.
Where Would the Money Actually Go?
The list of "proposed uses" in the plan is non-binding and heavily weighted toward reimbursing private developers rather than creating public benefits. The actual allocations will be decided later through private development agreements, leaving no guarantee that Porterdale residents will see significant public amenities.
Of the $38-44 million in expected TAD proceeds, approximately $21-25 million would go to Cedar Shoals for roads, infrastructure, clubhouses, and "multi-family and commercial incentives." Only about $6.9-7.4 million would be directed to public parks, trails, and related improvements.

Critical Point: These allocations are not binding commitments. The plan explicitly states that actual funding decisions will be made later in private development agreements, giving the city little leverage and residents no guarantee of public benefits.
Social Equity and Displacement Risks
The Gentrification Concern
Academic research warns that TADs are a "financial gamble" for local governments and can reduce net community wealth if projects fail. Moreover, TADs may stimulate growth that increases demand for public services without generating enough new revenue to support them.
Cedar Shoals is marketed as a luxury "resort-styled" community. Without robust affordable-housing requirements, the project could push up housing costs in Porterdale and price out existing residents.
01
Luxury Development
High-end project raises property values in surrounding area
02
Rising Costs
Existing homeowners face higher property taxes and living expenses
03
Displacement Pressure
Low-to-moderate income families forced to relocate
04
Limited Resources
City lacks funds for mitigation due to diverted tax revenue
Because the plan diverts tax revenue away from general city funds, Porterdale may have severely limited resources to mitigate these impacts through affordable-housing programs, rental assistance, or expanded services for displaced residents.
Research also notes that TAD debt is considered high-risk, forcing bond markets to demand higher interest rates. Jurisdictions sometimes end up subsidizing businesses that would have invested anyway, effectively transferring public wealth to private developers without creating additional economic benefit.
Bottom Line: A Raw Deal for Porterdale
Tax Allocation District #1 asks Porterdale to gamble its future tax growth on a privately driven project. The evidence reveals multiple serious concerns that city council members and stakeholders must carefully consider.
1
Massive Revenue Loss
Porterdale would give up over $141 million in tax growth from Cedar Shoals alone—revenue that would otherwise support police, fire, parks, schools, and essential services for up to three decades. Similar TADs have forced counties to raise millage rates, potentially increasing taxes on existing residents.
2
Vague, Non-Binding Promises
Most TAD funds would reimburse developers, with only a small portion earmarked for public amenities. These allocations are not guaranteed and will be negotiated later in private agreements. Porterdale is essentially writing a blank check and hoping for the best.
3
Rosy Assumptions, Real Risks
Financial projections assume rapid build-out, soaring property values, stable tax rates, and full partner cooperation. If any of these assumptions fail, the TAD underperforms while the city has already surrendered its tax base. Porterdale bears the downside risk with limited upside potential.
4
Loss of Control
Although Porterdale commits its tax growth, the county and school board must consent and may demand compensatory payments. Actual terms will be negotiated later, giving the city minimal leverage. Porterdale shares revenue without controlling how funds are spent.
5
Gentrification Without Resources
The luxury development could displace lower-income residents through rising housing costs. Yet diverted tax revenue leaves the city with limited resources for affordable-housing programs or expanded services to protect existing residents.
6
Questionable Public Benefit
Research suggests TADs often subsidize projects that would have been built anyway, simply boosting private profits. Porterdale could use its future tax growth for citywide infrastructure, neighborhood improvements, or educational investment instead of underwriting private development.
The Verdict
For these evidence-based reasons, Porterdale's TAD #1 looks more like a sweetheart deal for developers than a sound investment for the community. Council members should demand binding commitments for public benefits, robust affordable-housing protections, guaranteed school funding, and clear accountability measures before considering this proposal. The city's future tax growth is too valuable to surrender on uncertain terms.
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