By David Pendered
The Atlanta City Council is trying to get a handle on the incentives offered by Invest Atlanta during negotiations over business relocations.
The measure comes as the council wrestles with the increasing independence exercised by the leaders of the city’s development arm, which is chaired by the mayor. On Wednesday, the council’s Finance Committee approved a resolution that calls on the city’s CFO to submit monthly reports to the council on the incentives Invest Atlanta orders paid to businesses. The full council is to vote on the plan July 15.
Committee Chair Felicia Moore shelved a sterner measure she’d proposed that called for a non-binding council vote before Invest Atlanta could offer such incentives. Moore, who introduced both papers, said the stricter proposal was unlikely to win enough votes to pass.
Moore said the broader issue she wants to address is how the city goes about offering, and paying, financial incentives offered to businesses to locate or expand in Atlanta. The amount of money at stake is considerable – more than $2 million was presented to the council just last month.
“How do we want to fund Invest Atlanta and how do we want to fund these incentives,” Moore asked the committee. “All this [resolution] says is … tell us how you spent it.”
Councilperson Howard Shook said he is unsure if either of Moore’s proposal are the best solution to the council’s relation with Invest Atlanta.
“There’s a problem here. It’s a communication problem,” Shook said. “Something’s got to change. I’m not sure if this is the right way to do it. I will vote for something that gets us on a much better level of communication.”
Part of the issue appears to be a sum of more than $2 million in incentives the city offered to businesses and was presented to the council at its June 17 meeting. That was the day the council was swamped with its final approval of the 2014 budget. The sum – somewhere between $2.3 million and $2.5 million – was promised to businesses without any consultation with council and without any funding source authorized, according to Moore and at least one other councilperson.
Councilperson Joyce Sheperd, who also serves on the board of Invest Atlanta, said she was not aware of the funding promise that had been made on behalf of the city.
“I was taken aback, and I’m on the board,” said Sheperd, who’s not on the Finance Committee but spoke from the audience. “If we’re going to provide $2.3 million for economic opportunity funds, we should already have the money in hand. We shouldn’t be making promises.”
One recent example of an incentive provided by Invest Atlanta illustrates the types of deals that can occur without the council’s input. It illustrates the magnitude of just one transaction, which in this case was part of a much larger package offered in conjunction with the state. Invest Atlanta, in entering this and other transactions, is fully authorized to act as the city’s development agent.
The example is the city’s effort to entice Carter’s Inc. to locate in Buckhead. Invest Atlanta provided the clothing manufacturer with a $350,000 grant. The grant contains clawback penalties if Carter’s does not create at least 200 jobs in Atlanta that pay certain wages and benefits, according to terms of the deal.
The council’s concern, expressed most recently during the debate over Moore’s legislation, is when financial promises are made on behalf of the city, and the council is expected to find the money to cover in a budget that’s already allocated.
The measure Moore shelved would have required a non-binding vote by the council before Invest Atlanta offered any incentive to a business. Sheperd said this proposal was troublesome, while she could support the proposed CFO reports because, she said, they represent “transparency and accountability.”