The Buckhead cityhood movement claims that the new city would simply cover its pro-rata share of Atlanta’s debt, or around 40%. But opponents of deannexation cast doubt on their ability to do so without legislation authorizing that step -- and even then, there would likely be legal challenges, they said.
Recent history elsewhere in Georgia demonstrated the messy financial implications of deannexation. In 2018, the wealthy neighborhood of Eagle’s Landing sought to deannex from the mostly-Black city of Stockbridge. The move was challenged by a lending arm of Capital One Financial Corp., which held nearly $12 million in Stockbridge bonds and filed a lawsuit claiming a move to deannex would violate the contracts clauses of the U.S. constitution.
Capital One’s complaint detailed how deannexation would cost Stockbridge about half of the tax base backing the debt, “substantially impairing and eliminating a significant portion” of the security backing the bonds. Voters ultimately voted down the proposed new city.
The Georgia Municipal Association cited the Stockbridge example to lawmakers to indicate what is at stake with the Buckhead deannexation, said Tom Gehl, director of governmental relations for the group, which is against the effort.
Gehl said the moment brought to mind the Phoenix that’s depicted on the city’s seal.
A downtown sculpture called Atlanta from the Ashes, known as the Phoenix, represents its rise to a major Southern powerhouse after the destruction wrought by the Civil War.
“‘Die out’ doesn’t mean that they don’t have a chance of rising again like the Phoenix,” he said. For that reason, he said his group was going to watch for any “trickery” in the legislature surrounding deannexation.
--With assistance from Brett Pulley.
This article was provided by Bloomberg News.