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Atlanta board OKs controversial cash, tax breaks for major companies

Maggie Lee
Exterior of 725 Ponce BlackRock's Atlanta home: 725 Ponce, on the Eastside BeltLine. Credit: Kelly Jordan

By Maggie Lee

Atlanta’s economic development board granted tax breaks and cash worth a total $2.1 million to three major corporations Thursday.

But some folks think BlackRock, Norfolk Southern and Invesco already have pretty sweet public subsidies and objected.

“How much do we reward successful corporations for coming to Atlanta?” said Bill Bozarth, an Invest Atlanta board member, during the Thursday meeting where he voted “no” to three of the four proposals for the three companies.

BlackRock, the world’s largest asset manager, will receive $500,000 in city of Atlanta dollars in the form of a “economic opportunity fund for business retention and expansion” grant. Last year, Invest Atlanta approved a $705,000 personal property tax break for the company’s equipment. And in March this year, the state of Georgia gave BlackRock $4 million. And the building it’s in, 725 Ponce, also has a property tax break.

The board also voted a similar $600,000 business retention grant for Norfolk Southern. The railroad’s new Midtown Atlanta headquarters have already been granted a property tax break worth $24 million over 10 years. (Separately, Norfolk Southern is making some northwest Atlanta residents angry with its plans to turn the old Chattahoochee Brick yard into a bulk transfer facility.)

Invesco, also a huge asset manager, will receive a $150,000 grant in the same category as BlackRock. And Invest Atlanta’s board also approved a personal property tax break on office equipment that will be worth about $843,000. INVESCO is set to move its headquarters to the Midtown Union Building that will be on the block between 17th, West Peachtree and Spring streets. Fulton County’s development authority granted that building a property tax break worth $57 million over 10 years.

Cities, counties and states across the country routinely offer valuable incentives of one type or another to woo companies.

The idea is that the pie gets bigger when a big company moves to a community — and eventually pays a full tax bill, and has employees who pay income taxes and so on.

All three corporate locations — BlackRock, Norfolk Southern and Invesco — were what are called “competitive” projects, according to Invest Atlanta.

That is, other communities were making their own pitches for these corporate locations and Atlanta feared losing out to Salt Lake City or Austin or other places.

Criticism of Thursday’s Invest Atlanta business came from some 18 emails from the public — which is a lot of comment for a rather obscure city board.  The emails called the grants and tax breaks corporate welfare, corporate giveaways, and so on.

Former Invest Atlanta board member Julian Bene sent one of the emails.

“Invest Atlanta cannot seriously claim to play a role in promoting a more equitable city with these favors on the agenda,” he wrote.

There was little obvious enthusiasm from the board to approve the deals for the three companies. Each motion struggled to get someone to second it. Only the Invesco $150,000 grant passed unanimously.

But the tax breaks and grants were part of the initial pitch to each company, in courtships that go back years and years.

“I think the bar for saying ‘no’ on something we’ve already OK’d should be high,” said Boardmember Fred Smith just before the BlackRock vote. It’s a sentiment several of his colleagues echoed during the morning meeting.

Invest Atlanta and the city of Atlanta have made moves toward an economic development policy that lifts up local folks, people who don’t have college degrees and parts of town that need investment.

Atlanta’s workforce agency was recently integrated into Invest Atlanta, putting job training and placement under the same roof with business recruitment. Atlanta Mayor Keisha Lance Bottoms’ One Atlanta plan spells out exactly how her administration wants to work to achieve better economic outcomes for Atlanta residents, primarily Black and brown communities where low household income and high rates of poverty and unemployment persist.

After Thursday morning’s votes, Invest Atlanta President and CEO Eloisa Klementich made a comment to her board.

“We heard you, board,” she said. “I just want to thank you for allowing us to get through those previous commitments and change is on the way.”

There was one more personal property tax abatement approved Thursday. It’ll be worth $269,000 in savings to Coffee Cafe Bakery, a contractor to the likes Dunkin’ Donuts. The bakery will employ some 70 people at a Browns Mill Road site.

Documents

BlackRock grant fact sheet from Invest Atlanta

INVESCO grant fact sheet from Invest Atlanta

INVESCO personal property tax break fact sheet from Invest Atlanta

Norfolk Southern grant fact sheet from Invest Atlanta

Coffee Cafe Bakery personal property tax break fact sheet from Invest Atlanta

Correction: A previous version of this story incorrectly stated one of Bill Bozarth’s votes.
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Maggie Lee
Maggie Lee

Maggie Lee is a freelance reporter who's been covering Georgia and metro Atlanta government and politics since 2008.

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3 Comments

  1. Avatar
    Larry Savage November 20, 2020 10:25 am

    “Grants” to private entities by City or State appear to violate the “Gratuities Clause” of the Georgia constitution. I’m not aware of anything in the constitution that permits this. Just about ALL of these tax abatement deals are illegal under current law. The various development authorities get their legal advice from the bond lawyers who profit from the fees they are paid when bonds are issued. The law firms then kick back money to the authorities where there is little or no accounting or transparency. In short, it’s all a big scam that transfers the cost of government from businesses to private citizens.Report

    Reply
  2. Avatar
    Larry Savage November 20, 2020 10:38 am

    BTW, the biggest losers in all these tax abatement deals are the various school districts who are so highly dependent on property taxes that will not be collected from these projects.Report

    Reply
  3. Avatar
    xyz November 24, 2020 9:14 am

    We should provide the amount of tax breaks required to get them to do business in Atlanta, instead of someplace else, and no more. That exact amount is probably hard to pin down for a casual observer, and probably even for the people who are hopefully doing that analysis. Maybe laws should change so that there isn’t competition between cities, but until then, that’s the world we live in, right? And more high paying jobs, more folks paying income tax to fund needed services in the city, more construction jobs to build those buildings, more restaurants in the area to serve those new employees, etc… All good stuff, no? Btw, in a parallel world where those companies locate somewhere else, you still wouldn’t get the tax revenue.Report

    Reply

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