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Dyana Bagby Posted by on February 15, 2017.

Brookhaven council seeks to raise hotel/motel tax to fund Peachtree Creek Greenway construction

The Brookhaven City Council is seeking legislative approval to raise its hotel/motel tax from 5 percent to 8 percent so it can fund construction of the long-awaited Peachtree Creek Greenway project.

The council voted unanimously Feb. 15 to approve a resolution asking DeKalb legislators to introduce a bill that would authorize the city to raise the tax and plans are to break ground on the Greenway next year.

“This is a very big first step and it will signal to the rest of the donor community we really mean business,” Mayor John Ernst said after the vote.

A map of the planned Peachtree Creek Greenway. The requested 3 percent increase in hotel/motel tax would go to fund construction of a paved trail between North Druid Hills Road and Briarwood Road. Click to enlarge. (Peachtree Creek Greenway)

Betsy Eggers, chair of the Peachtree Creek Greenway board, thanked the City Council for its support. Paved trails for running, biking and walking was the No. 1 “most wanted” item in the Brookhaven Parks & Recreation master plan, she said.

The city will be focusing initial construction on a base trail along the Greenway between North Druid Hills Road and Briarwood Road estimated to cost about $9 million.

State law requires the 3 percent be divided with 1.5 percent going to the city to use on a project for “creation and expansion” of a project to drive tourism to the city and region — in this case the Greenway — and the other 1.5 percent going toward the promotion and advertising of the city. State law prohibits the money to be used for improvements of existing parks, said City Attorney Chris Balch.

Assistant City Manager Steve Chapman said it’s estimated the city’s half of the 3 percent will add $650,000 annually to the city’s coffers. The $650,000 will then be used by the city to finance a $9 million loan, or revenue bond, over 20 years at 3.93 percent principal and interest. The revenue stream from the hotel/motel tax will pay for the revenue bond. Revenue bonds don’t require a public vote because they don’t rely on the full faith and credit of the city, City Manager Christian Sigman said.

Design plans for the Peachtree Creek Greenway between North Druid Hills Road, at left, and Briarwood Road. Click to enlarge. (City of Brookhaven)

The hotel/motel tax in unincorporated DeKalb County is already at 8 percent and the cities of Chamblee and Doraville approved a resolution last month seeking to increase its rate to 8 percent, Sigman told the council at the Feb. 15 work session.

Sigman said in a city press release the hotel/motel tax is a “logical funding source” for the Peachtree Creek Greenway. The tax is paid by non-city residents and once complete, the Peachtree Creek Greenway will connect to the Atlanta Beltline and Path400 for a regional “tourism product,” he said.

Eggers noted that many hotels in the city are located near the Greenway.

“It will be a win-win for both residents and the visitors who are staying in our city to have a nearby place to walk, run or bike,” she said in the press release. “Linear parks with mult-iuse trails have been shown to be financially self-sustaining through their return-on-investment, year over year.”

Brookhaven’s 2017 budget estimates hotel/motel tax revenue at $2.2 million. Under the existing arrangement, 60 percent of that revenue – or $1,320,000 – goes to the city’s General Fund; and 40 percent – or $880,000 – goes to Discover DeKalb, the county tourism agency the city uses rather than having its own city tourism agency.

The Peachtree Creek Greenway plan is a 12-mile multi-use path and linear park that is designed, in the long term, to connect the Atlanta BeltLine to Brookhaven, Chamblee and Doraville. Three miles of the Greenway is located in Brookhaven.

The North Fork of Peachtree Creek begins outside of I-285 and mostly flows along I-85 until it joins the South Fork of Peachtree Creek near the Lindbergh MARTA station and Path400 in Buckhead.

The presentation provided to the mayor and City Council at the work session:

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