Timothy Franzen, Intervenor v. City of Atlanta ( 2021 )

FIFTH DIVISION
MCFADDEN, C. J.,
BARNES, P. J., and RICKMAN, P.J.
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
https://www.gaappeals.us/rules
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COURT. ALL FILINGS MUST BE SUBMITTED WITHIN
THE TIMES SET BY OUR COURT RULES.
March 29, 2021
In the Court of Appeals of Georgia
A21A0259. TIMOTHY FRANZEN, INTERVENOR et al. v. CITY
OF ATLANTA.
A21A0267. TIMOTHY FRANZEN, INTERVENOR et al. v. CITY
OF ATLANTA.
RICKMAN, Presiding Judge.
This case involves two of three related bond validation proceedings, “all of
which concern the redevelopment of an area of downtown Atlanta commonly referred
to as “The Gulch.”“ Franzen v. Downtown Dev. Auth. of Atlanta, 309 Ga. 411, 411
(845 SE2d 539) (2020) (“Franzen I”).1 The Appellants opposed the bond validation
1
The bond validation proceedings at issue in this case involve the Westside
Tax Allocation District, where The Gulch is located. The third related bond validation
proceeding, which is not considered as part of this opinion, involved the Enterprise
Zone Employment Act. In Franzen I, the Georgia Supreme Court determined that
“[t]he record supports the trial court’s decision to defer to the City’s view that
redevelopment of The Gulch serves a beneficial public purpose and upheld the trial
court’s determination that the issuance of those Bonds was “sound, feasible, and
below primarily by arguing that the Atlanta Board of Education and the Fulton
County Board of Commissioners did not have the authority to commit educational tax
dollars derived from certain tax allocation districts to the use of the proposed Gulch
developer for the Gulch redevelopment. Because we find that these arguments have
no merit, we affirm the trial court’s validation of the related bonds.
“Whether a proposal to issue bonds is sound, feasible, and reasonable is a
question for the trial court, and its findings about soundness, feasibility, and
reasonableness must be sustained on appeal if there is any evidence to support them.”
(Citation and punctuation omitted.) Savage v. State, 297 Ga. 627, 631-32 (3) (774
SE2d 624) (2015).
“The relevant facts show that, in 1998, the City of Atlanta (“City”), through its
City Council, adopted a Westside Redevelopment Plan that expressly declared the
City’s goal of redeveloping The Gulch, which had been blighted and underdeveloped
for some time. Franzen, 309 Ga. at 411 (1). According to the plan,
The Railroad Gulch – The ravine created in Atlanta by the railroads has
long been a nuisance to the citizens of Atlanta as it has visually,
socially, and physically divided the area since the early 1900’s. To
overcome these conditions[,] the infusion of capital and the assistance
reasonable.” Id. at 431-432 (4).
2
of government is needed to redevelop this 150 acre area.... With the
impending development of the new Atlanta Arena, [Tax Allocation
District] funds could be used to help fill development gaps for tourism
uses, ... office and retail uses, and other redevelopment needs and uses
that might exist. Such developments offer Atlanta the best opportunity
to redevelop the “[G]ulch” since the founding of the city over 150 years
ago.
Id. at 411–12 (1).
The Redevelopment Powers Law encourages redevelopment “of economically
and socially depressed areas” because “these areas contribute to or cause
unemployment, limit the tax resources of counties and municipalities, and create a
greater demand for government services and, in general, have a deleterious effect
upon the public health, safety, morals, and welfare.” OCGA §§ 36-44-1; 36-44-2. “To
encourage such redevelopment, it is essential that the counties and municipalities of
this state have additional powers to form a more effective partnership with private
enterprise to overcome economic limitations that have previously impeded or
prohibited redevelopment of such areas.” OCGA § 36-44-2.
A political subdivision,
may exercise any powers necessary or convenient to carry out the
purposes of the [Redevelopment Powers Law], including but not limited
3
to, the power to: . . . [c]ause redevelopment plans to be prepared, to
approve by resolution the plans, and to implement the provisions and
effectuate the purposes of the plans; [c]reate within redevelopment areas
tax allocation districts and define the boundaries thereof or designate an
entire redevelopment area as a tax allocation district; . . . [i]ssue tax
allocation bonds[.]
OCGA § 36-44-5 (a) (2), (3), and (5).
A tax allocation district is defined as “a contiguous geographic area within a
redevelopment area which is defined and created by resolution of the local legislative
body of a political subdivision . . . for the purpose of issuing tax allocation bonds to
finance, wholly or partly, redevelopment costs within the area.” OCGA § 36-44-3
(13). Tax allocation bonds are “one or more series of bonds . . . issued by a political
subdivision to finance, wholly or partly, redevelopment costs within a tax allocation
district and which are issued on the basis of pledging for the payment or security for
payment of such bonds positive tax allocation incrementsrederived from the tax
allocation district.” OCGA § 36-44-3 (12). Tax allocation increments are derived
4
from an increase in ad valorem property tax2 revenues resulting from redevelopment.
See OCGA § 36-44-3 (14).
In 1998, the City created the Westside Tax Allocation District (“TAD”) when
it adopted the Westside Development Plan. Thereafter, the Atlanta Board of
Education, passed a resolution consenting to the inclusion of its ad valorem real
property taxes in the computation of the tax allocation increments for the Westside
TAD. Likewise, the Fulton County Board of Commissioners passed a similar
resolution, consenting to the inclusion of its ad valorem real property taxes in the
computation of the tax allocation increments for the Westside TAD through 2023.
Twenty years later, in 2008, the City Council passed a resolution amending the
termination date of the Westside TAD from December 31, 2023 to December 31,
2038. Fulton County then amended its 1998 resolution and extending its consent
through 2038, with certain conditions.
After the bond validation proceedings were initiated in both of these cases, the
Atlanta Board of Education adopted the 2018 resolution which stated that “[n]o
2
Ad valorem property taxes are defined as “all ad valorem property taxes
levied by each political subdivision and each county and independent board of
education consenting to the inclusion of that board of education’s property taxes as
being applicable to a tax allocation district” subject to a few defined exceptions.
OCGA § 36-44-3 (1).
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further use of the ad valorem tax increments authorized by the School Board in the
1998 Resolution . . . shall be permitted without the School Board’s prior written
consent, except to pay the debt service on the currently outstanding Bonds secured
thereby.”
One month later, the Atlanta Board of Education passed another Resolution
(“the 2019 Resolution”), ratifying its continued consent to use of its tax increments
from the Westside TAD:
Effective upon the Atlanta City Council’s approval of the Agreement,3
the School Board hereby ratifies its continued consent to the inclusion
of educational ad valorem property tax increment derived from the
Westside TAD for the payment of redevelopment costs in the Westside
TAD through December 31, 2038 and as security for the payment of the
Prior Westside TAD Bonds, as such bonds may be refunded,
restructured and or restated; provided that the maturity of such bonds
shall not be extended beyond December 31, 2037.
Additionally, the 2019 Resolution provided that the School Board consented “to the
inclusion of its educational ad valorem property tax increment generated solely
within the Gulch Area of the Westside TAD for the payment of Redevelopment Costs
in the Gulch Area and tax allocation bonds issued for the Gulch Project but only
3
The City Council approved the Agreement.
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through December 31, 2038[.]” Finally, the 2019 Resolution clarified that it “shall
supersede any conflicting provision in the [2018 Resolution] related to City tax
allocation districts.”
On the first day of the bond validation hearings, four citizens of the City (the
“Intervenors”), the appellants in these cases, moved to intervene and filed an answer
and objections to the bond validations.4 The trial court granted the motions to
intervene and the bond validation hearings took place over several days.
In A21A0259, the trial court issued orders both denying the Intervenors
objections and validating the issuance of the Westside TAD Gulch Area Bonds in an
amount not to exceed 40 million dollars. In A21A0267, the trial court issued orders
both denying the Intervenors objections and validating “the issuance by [the City] of
a series of restated bonds originally issued as part of redevelopment work in the
City’s Westside Tax Allocation District.”5 The Intervenors appeal from these four
4
The Intervenors are Timothy Franzen, Vincent D. Fort, James S. Martin, and
Julian M. Bene.
5
As explained in the trial court’s validation order, “the proceedings concern
the City’s (1) Tax Allocation Variable Rate Bonds (Westside Project), Series 2001-R,
in the aggregate principal amount of $3,535,000 (“the 2001 Restated Bonds”) in
exchange for the City’s outstanding Tax Allocation Variable Rate Bonds (Westside
Project), Series 2001, in the original aggregate principal amount of $14,995,000 (“the
Original Series 2001 Bonds”); (2) Tax Allocation Variable Rate Bonds (Westside
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orders.6 Many of the enumerated errors in A21A0259 and A210267 involve the same
issues so we will consider both cases jointly.
1. The Intervenors contend that the trial court erred by holding that the Atlanta
School Board could not limit its participation in the Westside TAD pursuant to the
2019 resolution.
Project), Series 2005A-R in the aggregate principal amount of $32,680,000 (the
“2005A Restated Bonds”) in exchange for the City’s outstanding Tax Allocation
Variable Rate Bonds (Westside Project), Series 2005A in the original aggregate
principal amount of $72,350,000 (the “Original Series 2005A Bonds”), and its Tax
Allocation Variable Rate Bonds (Westside Project), Series 2005B-R in the aggregate
principal amount of $4,905,000 (the “2005B Restated Bonds”) in exchange for the
City’s outstanding Tax Allocation Variable Rate Bonds (Westside Project), Series
2005B in the original aggregate principal amount of $10,215,000 (the “Original
Series 2005B Bonds” and together with the Original Series 2005A Bonds, the
“Original Series 2005 Bonds”); and (3) Tax Allocation Variable Rate Bonds
(Westside Project), Series 2008-R in the aggregate principal amount of $48,290,000
(the “Restated 2008 Bonds” and collective with the 2001 Restated Bonds, the 2005A
Restated Bonds and the 2005B Restated Bonds, the “Restated Bonds”) in exchange
for the City’s outstanding Tax Allocation Variable Rate Bonds (Westside Project),
Series 2008 in the original aggregate principal amount of $63,760,000 (the “Original
Series 2008 Bonds” and collectively, with the Original Series 2001 Bonds and
Original Series 2005 Bonds, “the Original Bank Bonds”), all as more particularly
described in the pleadings of this case.”
6
The Intervenors originally filed their notice of appeal in both cases in the
Supreme Court of Georgia. After reviewing the Intervenors’ briefs, however, the
Supreme Court determined that its constitutional question jurisdiction was not
invoked, and it transferred both cases to this Court.
8
This holding that the Intervenors challenge was an alternate holding. The trial
court held that, in the 2019 resolution, the Atlanta School Board consented to the
inclusion of educational ad valorem property tax dollars as a basis for computing the
tax allocation increment for the Westside TAD. Furthermore, the trial court held that
even without the 2019 resolution, “there was never a time limit on [the Atlanta School
Board’s] commitment to pledging its share of ad valorem tax dollars in the Westside
TAD, dating back to its original consent in 1998.” Alternatively, the trial court held
that once the City passed the Gulch Project Resolution in 2018, the Atlanta School
Board could not revoke its consent.
The 2019 resolution expressly stated that the Atlanta School Board consented
“to the inclusion of its educational ad valorem property tax increment generated
solely within the Gulch Area of the Westside TAD for the payment of Redevelopment
Costs in the Gulch Area and tax allocation bonds issued for the Gulch Project[.]” And
regardless of the validity of the 2018 resolution, the trial court properly held that the
Atlanta School Board expressly reinstated its consent to the inclusion of any
educational ad valorem property tax dollars as a basis for computing the tax
allocation increment for the Westside TAD in the 2019 resolution.
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2. The Intervenors contend that the trial court erred by failing to grant their
motion for judgment on the pleadings.
“After the pleadings are closed but within such time as not to delay the trial,
any party may move for judgment on the pleadings.” OCGA § 9-11-12 (c). The bond
validation hearings began on December 10, 2018. See Franzen I, 309 Ga. at 419-420
(3) (b). The Intervenors did not file their motion for judgment on the pleadings until
January 11, 2019, over a month after the trial began. The trial court held that the
Intervenors motion was untimely, citing OCGA § 9-11-12 (c).
The Intervenors fail to even address the basis for the trial court’s ruling. We
conclude that the trial court’s denial of the motion as untimely was not an abuse of
its broad discretion. See generally Franzen I, 309 Ga. at 419-421 (3) (b).
3. The Intervenors contend that the trial court erred by holding that Fulton
County consented to the proposed financing of the Gulch project.
OCGA § 36-44-14 (b) provides that,
All tax allocation bonds, notes, and other obligations shall be authorized
by resolution of the local legislative body, adopted by a majority vote of
the members thereof at a regular or special meeting and without the
necessity of a referendum or any electoral approval. The resolution shall
state the name of the tax allocation district and the aggregate principal
amount of the tax allocation bonds authorized.
10
In 1998, Fulton County consented to the inclusion of its ad valorem taxes on
real property in the computation of tax allocation increments for the Westside TAD
through 2023. In 2008, Fulton County passed a resolution extending its consent
through 2038, but requiring a new resolution before allowing Fulton County tax
increments to be used for “new projects receiving TAD financing after December 31,
2018.”
Intervenors argue that because the Westside TAD bonds for the Gulch
contemplate using the ad valorem taxes after December 31, 2018, there must be a
separate Fulton County resolution authorizing each use because the Gulch is a “new”
project. The trial court held that “as read by the Intervenors, the [2008 resolution]
would effectively swallow the [1998 resolution] and mandate a project-specific
resolution for every Westside TAD development projecct proposed after [December
17, 2008]” and that if that had been the intent, Fulton County would have simply
repealed the 1998 resolution. Thus, the trial court found that “new” in the 2008
resolution referred to
when the TAD-dependent project is proposed, not when the financing
begins to flow. . . . “That the Westside TAD Gulch Area Bonds –
redevelopment bonds that were proposed and approved by the city
before [December 31, 2008] – will rely in part on the County’s ad
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valorem taxes is not problematic and not inconsistent with the ongoing
consent the County granted in its [2008 resolution].”
“In considering these various enactments, we must apply the principal rules of
statutory construction.” City of Buchanan v. Pope, 222 Ga. App. 716, 717 (1) (476
SE2d 53) (1996). “It is a basic rule of construction that a statute or constitutional
provision should be construed to make all its parts harmonize and to give a sensible
and intelligent effect to each part, as it is not presumed that the legislature intended
that any part would be without meaning.” (Citation and punctuation omitted.) Id.“These principles apply in the interpretation of city or county ordinances as well as
statutes.” Id.We agree with the trial court that construing both the 1998 and 2008
resolutions together, the logical interpretation that harmonizes both resolutionas is
that any project approved on or before December 31, 2018, such as the Gulch project,
is able to utilize the County’s share of ad valoreum taxes without further resolution
from the County. For new projects proposed after December 31, 2018, no County ad
valorem taxes could be used absent a resolution from the County expressing its
consent. See generally City of Buchanan, 222 Ga App. at 718 (1) (a); Hogan v.
DeKalb County, 196 Ga. App. 728, 729 (397 SE2d 16) (1990).
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4. In two enumerated errors, the Intervenors contend that the trial court erred
by holding that the Atlanta School Board has consented to participate in the Westside
TAD through December 31, 2038 and by admitting the 2019 resolution into evidence.
“All relevant evidence shall be admissible, except as limited by constitutional
requirements or as otherwise provided by law or by other rules. ... Evidence which is
not relevant shall not be admissible.” OCGA § 24-4-402. “[T]he term ‘relevant
evidence’ means evidence having any tendency to make the existence of any fact that
is of consequence to the determination of the action more probable or less probable
than it would be without the evidence.” OCGA § 24-4-401. “[E]vidence having a
tendency to establish facts in issue is relevant and admissible, and no matter how
slight the probative value, our law favors admission of relevant evidence.” (Citation
and punctuation omitted.) City of Atlanta v. Bennett, 322 Ga. App. 726, 728 (1) (746
SE2d 198) (2013). A trial court’s ruling that evidence is relevant will not be reversed
absent abuse of discretion. (Citation and punctuation omitted.) Heard v. Payne, 350
Ga. App. 283, 286 (1) (828 SE2d 657) (2019).
As discussed in Division 1, the 2019 resolution expressly stated that the
Atlanta School Board consented “to the inclusion of its educational ad valorem
property tax increment generated solely within the Gulch Area of the Westside TAD
13
for the payment of Redevelopment Costs in the Gulch Area and tax allocation bonds
issued for the Gulch Project[.]” Because the 2019 resolution clarified that it “shall
supersede any conflicting provision in the [2018 Resolution] related to City tax
allocation districts,” it was relevant to the trial court’s ultimate conclusion regarding
the propriety of the bonds and whether the School Board properly consented to the
inclusion of its property tax increment in the TAD Bonds. Accordingly, the trial court
did not abuse its discretion in failing to exclude the evidence. See generally Heard,
350 Ga. App at 286 (1).
5. The Intervenors contend that the trial court erred by validating the TAD
development agreement. Specifically, the Intervenors argue that the TAD
development agreement violates Art. IX, Sec. V, Par 1 (a) of the 1983 Georgia
Constitution (the “debt limitation clause”), Art. IX, Sec. II, Par. VII of the 1983
Georgia Constitution (the “appropriation clause”); and Art. III, Sec. VI, Par. VI of the
1983 Georgia Constitution (the “gratuities clause”).
In our Supreme Court’s order transferring this case to our Court the Supreme
Court stated that “the trial court specifically declined to consider the constitutional
arguments raised therein, such that its order validating the bonds cannot be
considered an implicit ruling on those untimely arguments.” Franzen v. City of
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Atlanta (Case No. S20A1013).7 Because the trial court did not rule on the
constitutional questions, the constitutional issues are not properly before this Court.
See City of Decatur v. DeKalb County, 284 Ga. 434, 438 (2) (668 SE2d 247) (2008).
6. The Intervenors contend that the trial court erred in the bond validation order
by concluding that the financing structure of the Gulch tax allocation bonds was
lawful.
The Intervenors advanced this argument in the second amendment to their
answer and the trial court failed to address it because it was untimely. Because the
trial court found the Intervenors’ objection to be untimely and failed to address the
argument, there is nothing for this Court to review. See Franzen I, 309 Ga. at 420 (3)
(b); City of Gainesville v. Dodd, 275 Ga. 834, 837 (537 SE2d 369) (2002) (when
there has been no specific ruling by the trial court on an issue on appeal, there is no
ruling to review for legal error).
7
The Intervenors contend that the trial court erred by holding that certain of
their objections were untimely. This issue has already been dealt with by our Supreme
Court who found that it was not an abuse of discretion for the trial court to determine
that Intervenors’ amendments, which included additional objections, were untimely.
See Franzen I, 309 Ga. at 420 (b).
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7. The Intervenors contend that the trial court erred by holding that a new or
amended local law is not required before the City can exercise the authority to use
school tax funds in a TAD to fun redevelopment costs.
The Georgia Supreme Court has recognized that since 1986, the City has been
authorized to create TADs to fund redevelopment projects. See Sherman v. Atlanta
Indep. Sch. Sys., 293 Ga. 268, 269 (1) (744 SE2d 26) (2013).8 The trial court properly
held that nothing in the Redevelopment Powers law repealed the City’s existing
authority to create TADs. OCGA § 36-44-22 only requires that “[r]edevelopment
powers under this chapter may not be exercised by any political subdivision unless
so authorized by a local law relating thereto.” Because the City had already passed
a local law authorizing the City’s redevelopment powers, this claim has no merit.
8. The Intervenors contend that the trial court erred by holding that the City’s
adoption of the Westside Redevelopment Plan and creation of the Westside TAD was
lawful.
8
“In 1986, the General Assembly enacted a local law amending the charter of
the City of Atlanta to authorize the City to exercise redevelopment powers, see Ga.
L. 1986, p. 4834, §§ 1–3; that local law was approved in a City referendum.”
Sherman, 293 Ga. at 269 (1).
16
“A redevelopment plan may be proposed by the redevelopment agency of a
political subdivision, but such plan may not be implemented until it is approved by
the adoption of a resolution of the local legislative body of the political subdivision
as provided in this chapter.” OCGA § 36-44-7 (a). The Georgia Supreme Court stated
that “in 1998, the City of Atlanta (“City”), through its City Council, adopted a
Westside Redevelopment Plan that expressly declared the City’s goal of redeveloping
The Gulch, which had been blighted and underdeveloped for some time.” Franzen I,
309 Ga. at 411 (1). The Intervenors fail to make any successful argument as to why
the redevelopment plan was not properly adopted and this claim has no merit.
9. The Intervenors contend that the trial court erred by holding that the
redevelopment plan complied with OCGA § 36-44-3 (9).
OCGA § 36-44-3 was amended in 2009 to add the requirement that “[i]f the
[redevelopment] plan proposes to include in the tax allocation increment ad valorem
taxes levied by a board of education, the plan shall contain a school system impact
analysis addressing the financial and operational impact on the school system of the
proposed redevelopment.” OCGA § 36-44-3 (9). The Westside Redevelopment Plan,
however, was adopted in 1998 and amended in in 2008, accordingly this claim has
no merit. See OCGA § 36-44-9 (g) (“Any consent by a local board of education to the
17
inclusion of educational ad valorem property taxes as a basis for computing tax
allocation increments and any authorization to use such funds for such purposes that
was approved before January 1, 2009, and not rescinded or repealed prior to April 22,
2009, is ratified and confirmed.”).
10. The Intervenors contend that the trial court erred by holding that the
original series 2008 bonds that are the subject of A21A0267 were secured by
education property tax increment dollars.
As the trial court found, the evidence shows that since 2011, the original series
2008 bonds have been secured by the education tax increment, accordingly this claim
is meritless.
11. The Intervenors contend that the trial court erred because the validation
order and the order on objections fail to comply with OCGA § 9-11-52 (a)9.
9
That statute provides that,
In ruling on interlocutory injunctions and in all nonjury trials in courts
of record, the court shall upon request of any party made prior to such
ruling, find the facts specially and shall state separately its conclusions
of law. If an opinion or memorandum of decision is filed, it will be
sufficient if the findings and conclusions appear therein. Findings shall
not be set aside unless clearly erroneous, and due regard shall be given
to the opportunity of the trial court to judge the credibility of the
18
The Intervenors fail to explain how exactly the orders fail to satisfy the
requirements of OCGA § 9-11-52 (a). They made the same argument in Franzen I and
the Supreme Court rejected the argument, holding that
during the three days of hearings, extensive evidence was, in fact,
presented regarding the mechanics of the bond financing structure,
which is included in the record and discussed in the trial court’s lengthy
orders. Therefore, contrary to the Intervenors’ contentions, there is a
clear statement of the trial court’s reasoning, and there is a sufficient
basis on which this Court can assess that conclusion.
Franzen I, 309 Ga. at 422 (3) (c). The same reasoning applies to the orders in this
case and “[t]herefore, there is no need to remand this case for the trial court to make
additional findings.” Id.
In conclusion,
[t]he record supports the trial court’s decision to defer to the City’s view
that redevelopment of The Gulch serves a beneficial public purpose.
While not all Atlantans, including the Intervenors in this case, share the
City’s vision for The Gulch, that does not mean that the project is
illegal. As the trial court pointed out, the job of the courts is not to
question the advisability or estimate the popularity of the City’s
decisions regarding the development of The Gulch. With regard to the
witnesses.
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validation of the Bonds, the job of this Court is simply to determine
whether there was any evidence supporting the trial court’s
determination that the issuance of the Bonds was sound, feasible, and
reasonable. In this case, there was.
Franzen, 309 Ga. 411 at 431–32 (4).
Judgment affirmed. McFadden, C. J., and Barnes, P. J, concur.
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