Commercial real estate and infrastructure development have been in mutualism since the very beginning; both are developing year after year and each benefits the other immensely. Looking back at the past few decades alone, we can clearly identify how local governmental authorities and commercial real estate investors have positively impacted the development of important infrastructure across local markets in Georgia. To explore this relationship further, we’ve used this article to outline how commercial real estate has and will continue to pave the way for larger infrastructure through local governmental programs such as improvement districts.
Improvement Districts
Commercial property owners and developers play a tremendous role in shaping urban landscapes in a local real estate market. Seasoned investors understand that the investments they make extend beyond their property lines. They realize that the public realm surrounding their commercial buildings can play a pivotal role in both growing their business and increasing the equity generated throughout the ownership tenure of their assets. In the 1970s, this realization led to the formation of the first improvement districts in the United States.
These improvement districts were adopted and implemented in urban areas and commercial submarkets across the nation. Improvement districts have been branded different names across the nation’s states and are often referred to as community improvement districts (CIDs), business improvement districts (BIDs), and special services areas (SSAs).
Regardless of nomenclature, these districts provided proper channels for state authorities to raise funds through self-taxation. In its simplest form, an improvement district is a group of property owners in a defined area that voluntarily tax themselves in order to fund improvements within the district’s boundaries. These funds are then spent on consignments and services important to both property owners and the local public that comprise these districts. Since the creation of improvement districts, property owners have benefited greatly from these funds in their respective sub-markets and the funds have also managed to improve services for the public, such as street conditions, security, health services, and medical infrastructures.
Impact on the Metro Atlanta Area
Recently, the CID created in the City of Atlanta has earned huge projects which have catered to millions of people. Previously, commercial sub-markets with CIDs usually attracted limited investments; however, with increased growth and expanded budgets, these same funds have led the charge in making a considerable impact on the local infrastructure developments in their respective districts. By way of example, with the addition of numerous infrastructure improvements in the City of Atlanta through its CID, the real estate values in the local Atlanta sub-market have witnessed tremendous growth over recent years.
Surrounding real estate sub-markets soon noticed the benefits of improvement districts and, as a result, commercial property owners from the surrounding real estate sub-markets also began creating their own CIDs to solve the mobility and transportation issues they were facing in their local real estate markets.
These efforts from the commercial property owners in Atlanta and its surrounding areas turned fruitful. Since the inception of improvement districts, commercial property owners have helped to expand major commuter corridors, interchanges, and other important infrastructure located throughout the Metro Atlanta area. Moreover, the commercial sub-markets in and around Atlanta have also introduced ancillary improvement districts to fulfill other urbanized needs, such as parks and streetscapes.
Summary
To conclude, the improvement district projects which have impacted the Metro Atlanta area over recent years have solidified the sentiment that improvement districts are one of the most powerful public-private tools that can help revitalize business districts and re-energize entire communities. Improvement districts coordinated by local real estate investors and developers are an extraordinary commercial real estate tool for building improved transportation and local infrastructure, which can ultimately lead to tremendous growth in equity over the course of owning a commercial property in sub-markets which make use of them.
