Bill would allow bonds to fund residential infrastructure

ATLANTA - Rural Georgia real estate developers would gain the ability to create private towns, issuing quasi-governmental bonds to pay for roads, sewers and even schools, under a bill to be introduced Monday by state Sen. Cecil Staton, R-Macon.

The Georgia Economic Redevelopment Act of 2006 is designed to promote residential development with better amenities than many Georgia counties can currently afford using public funds, Staton said at a Thursday news conference. The bill would expand the use of community-improvement districts to include residential development.

"This would be particularly useful in developing retirement communities in south Georgia," Staton said. "Florida has been doing this for years."

The bill would not extend the new districts to Tier I counties, the wealthiest in Georgia's four-tier classification. Houston is the only Tier 1 county in Middle Georgia.

Staton said he expects bipartisan support for the bill, but believes the decision to exclude wealthy counties could create some controversy.

"I wanted to avoid having this get into a debate about overgrowth in these high-growth counties," Staton said.

Some legislators might question the need for the bill at all. Georgia recently passed 9 million in population, and there have been calls to preserve rural timberland recently put on the market by forest product companies.

"The whole thing sounds preposterous to me," said Neil Herring, an environmental lobbyist.

Georgia has grown at a prodigious rate. There is no need for public participation in residential development funding."

State law currently allows the creation of community-improvement districts for commercial and industrial development. Staton's proposal would require passage of a constitutional amendment to be voted on next fall.

The districts could be created only by private parties who petition a county government. The county would not be directly liable for paying back the bonds in case of default, Staton said. The bonds would be repaid through a fee - similar to a condominium association fee - charged to those who buy property in the improvement district.

The system created is like a voluntary version of impact fees imposed on residential development in some counties to pay for infrastructure. But the fee here goes directly toward paying off the privately owned assets.

The new districts would not gain eminent domain powers without county government approval, and then would be limited to condemnations for water, road and utility rights of way, Staton said.

The infrastructure improvements would be owned by the community-improvement district, which would be administered by a board consisting of four members appointed by the property owners and one appointed by the county government.

These could eventually revert to public ownership, Staton said, but would be privately owned while the bonds were being repaid.