Does U.S. Highway 278 have anything that makes it special? Many people don’t think so, at least, not yet.
The commercial corridor is Covington’s largest, but visitors and even some of its own property owners admit the corridor is at best non-descript.

“I, like many of you, have lived here all my life, and we can ride up and down 278 every day. You kind of get desensitized. But if you put a visitors’ eyes in your head, ‘What do they see?’ And it’s kind of scary. It really is,” said a local property owner, who is part of an effort to improve the corridor.

Commercial property owners on U.S. 278 in Covington want to bring new life and a new look to the corridor, and they’re willing to tax themselves to do it.

Some of the highway’s largest property owners are working to form a Community Improvement District (CID), which will place an extra property tax on them and their fellow commercial property owners, but the tax funds would be completely privately controlled and spent.

CIDs are being used all over Metro Atlanta to revive struggling commercial corridors and enhance those that have grown stagnant.

What is a CID?

A CID is a collection of commercial property owners — not residential property and not necessarily business owners, unless they also own their property — who voluntarily agree to pay additional property taxes that are put into a special fund that they control.

The idea behind CIDs is that by combining their money, commercial property owners can make improvements that benefit themselves and the entire corridor, including road construction projects and upgrades, sidewalks, stormwater projects, landscaping, parking and even parks and other recreational facilities.

While government at the local, state and federal levels typically tackle these types of projects, governments are both short of available cash and have to try to balance projects for the entire area they serve.

CIDs don’t replace governments; instead, they look to partner with governments. Because CIDs are willing to put up a share of the money for larger projects, thus reducing governments investment, CIDs can help expedite such projects.

Invest money to get money

“Why in the world would any business person want to tax themselves more?” Snellville state Rep. Brent Harrell asked at a June 5 meeting of U.S. 278 property owners. “We’re concerned about return on investment.”

Harrell was formerly in charge the Evermore CID in Gwinnett County, which now has five CIDs. During the peak of the economy, the Evermore CID along U.S. Highway 78 was seeing a return on investment (ROI) of 23 to 1.

That return came in the form of public funding and grants, two sources that have since dried up, but Harrell said the average ROI is still 3 to 1.

“Even 3-to-1 is still worth investigating further, and you’ll probably want to participate,” Harrell said. “Are you satisfied with the number of drivers (on U.S. 278)? You can always get more customers.”

Current Evermore CID Executive Director Jim Brooks said in an interview that Evermore CID property owners have paid $10.9 million during the past 11 years and that money has contributed to $110 million of projects that have either been completed, are in the works or are slated to be done.

The Lilburn CID, also in Gwinnett County, has collected $850,000 since 2010 and that has led to approximately $6 million in completed projects, according to CID Executive Director Gerald McDowell. The Lilburn CID is one of the closest in size to Covington’s U.S. 278 in terms of total property values and the amount of money that could be raised.

Among Lilburn’s biggest projects to date were the $4 million realignment of Main Street, a $950,000 multi-use trail along the corridor and $150,000 in median landscaping for U.S. Highway 29, McDowell said.

While the figures will vary by CID, Brooks said about 16 percent of the Evermore CID’s budget goes toward salaries and benefits for two full-time employees. The Evermore CID is almost four times as large as Covington’s would be, so it would be up to Covington’s property owners to decide how they would structure their CID.

How do you start and end a CID?

A CID can be created if a majority of commercial property owners in a district agree to form one. There are two requirements that must be met:

1. A majority of property owners (50 percent plus one owner) must give written consent to form a CID.

2. Those property owners in favor have to own at least 75 percent of the total commercial property value in the district (as measured by the county tax assessor).

The Georgia General Assembly has to pass a bill — this is called local legislation and is usually a formality if the local community is firmly behind the legislation — and the Covington City Council would also have to pass a resolution consenting to the creation of the district, said CID consultant Larry Kaiser, an engineer and president of Collaborative Infrastructure Services.

In order to drum up support for the CID, Kaiser said there’s generally a marketing effort to sell the CID concept to property owners. All of these initial efforts — marketing and working through the initial process — require start-up money, Kaiser said; usually a nonprofit is formed to lead the effort until the CID is developed.

If a CID is formed, property owners would then vote on a CID board of directors, which Kaiser said is typically five to seven members in size. The ballots for this process are weighted by the value of the voter’s property.

Once a CID is formed, it lasts for an initial six-year period. The CID is then voted on during that sixth year and once every six years after that, and owners can either keep the CID in place or discontinue it.

Kaiser and Harrell said they have never yet heard of a CID in Georgia being disbanded, though many CIDs are less than six years old.

Why does 278 need a CID?

“Exit 90 and 278 is the gateway to Covington and about 10,000 vehicles a day come off this non-descript interstate exit,” Kaiser said. “25,000 vehicles a day drive down the 278 corridor. What’s special about it? I can’t see anything special about it, personally speaking.”

Kaiser pointed to cow paths along the side of the road, areas of worn-out grass that show a walking trail in absence of a sidewalk, as well as temporary signs and other unsightly items.

Serra Phillips, the Covington-Newton County Chamber of Commerce’s commercial/retail recruiter, said protecting and reviving 278 is one of her first priorities.

“Before I bring one business in and we start improving in another area, we’ve got to improve what we have in our home, and we‘ve got improve our home in that corridor and make sure we protect it and not forget about it and move to a different area,” Phillips told property owners.

“You are the economic gateway of Covington. You have the most sales tax. You have more companies and businesses located up in that corridor than anywhere else in the county, as well as you employ more people than anywhere in the county.”

Jerry Bouchillon, who owns multiple properties along 278, said one of his ‘pet peeves’ in past years is the fact the city and county have spent so much money on downtown Covington and ignored 278 despite the fact 278 brings in so much more tax revenue and provides so many more jobs.

However, Bouchillon said part of that is because a group of business owners decades ago decided to start up a Main Street Covington program, which has received hotel/motel tax money for many years. He said if a CID is started, he would hope the city and county would be willing to give public support to 278.

Mayor Ronnie Johnston and Councilman Chris Smith both told property owners at the June 5 meeting that the city supports the formation of a CID and is willing to partner with the property owners.

Large property owner Rob Fowler said another benefit of a CID for 278 is that it would give the vast group of businesses a group to act as a spokesperson to represent the corridors’ interests and bring some cohesiveness.

CID’s priorities

While there is no concrete list in place, Phillips said most of the initial priorities for business owners in support of a CID are to clean up the corridor, including:

-cleaning up litter

-better maintaining and landscaping the corridor, including the interstate exits

-installing new signage that’s consistent and brands the corridor and better directs people to important locations

-installing more lighting

David Bailey, with Colony Realty, said he didn’t oppose the CID, but he asked whether the efforts weren’t just trying to “put on a pretty face” without really fundamentally changing the corridor. For example, there are multiple pawn shops on the corridor, which Bailey said he doesn’t oppose, but those shops aren’t examples of the high-end businesses people want.

Harrell said the change won’t happen overnight, but a more scenic and eye-pleasing corridor should lead to more customers and revenue. He’s seen a pawn shop along U.S. 78 upgrade from a bad building to a nice, two-story, four-sided stone building. He’s also seen examples of traditional car dealerships come in and replace buy here, pay here locations.

Next steps

The chamber’s Office of Economic Development, Newton Federal and Knight and Tabb Insurance Agency were among the entities that publicly pledged start-up funds and other owners are also contributing. Mayor Johnston said he would also ask the council to financially participate.

For more information about the CID, contact Phillips at skphillips@selectnewton.com or 770-786-7510 ext. 12, or Jimmy Tanner with Newton Federal, at jimmytanner@newtonfederal.com or 678-729-9781.