Fulton commercial tax breaks get a day in court
By Maggie Lee
A Fulton agency and an Atlanta resident met in court Monday, the two sides urging a judge in opposite directions on some potential $15.2 million in property tax breaks for four new commercial properties in hot Atlanta neighborhoods.
On one side, the Development Authority of Fulton County, which argues its job is to grow the county’s economy and tax base, and part of that includes doing something that has the state’s blessing: offering tax incentives to new developments.
On the other side, two longtime opponents of property tax breaks for developers: Atlanta resident Julian Bene (of Redlight the Gulch); and representing him, attorney John Woodham. They argue that the way Fulton does business breaks the letter of state development law and that Fulton should stop doing business where Atlanta and its schools have asked it to stop.
In the middle, Chief Judge Christopher S. Brasher of the Superior Court of Fulton County. Such tax breaks are delivered by complex transactions that needs the court’s formal approval, making it the venue for residents like Bene to bring their complaints.
The complaints Bene brought are on an Atlantic Station dual-branded hotel; a Blandtown residential development near the BeltLine corridor; the Interlock II, a mixed-use development across Northside from Georgia Tech; and a new mainly residential development on the old Exide battery site on the BeltLine in Capitol View.
Each of the projects faced some objections at the board of Fulton’s development authority, but did get approval. Together, the property tax breaks would be worth a total $15.2 million on the four properties over 10 years. That money would normally go to a mix of the county, the city, and schools; or mainly to the BeltLine if the property is on that corridor.
Woodham brought up tons of fine points in Georgia’s development law, like the different legal treatment of a mere hotel with meeting space versus a “trade show” facility. And he also raised legal questions about the complex “lease-purchase” bond transactions that allow a public agency to take control of a property for tax purposes and pass the lower tax bill on to the developer.
But what makes this case different very from others Woodham has argued is that Atlanta City Council, the Atlanta Board of Education and Invest Atlanta have all asked Fulton’s development authority to stop doing business in the city.
Those city folks argue that Fulton is giving away the city’s tax base wrongly or when it doesn’t have to — that developers are pretty likely to come to places like Midtown anyway. Or that development ought to be incentivized in neighborhoods that have been left behind by prosperity. Or that the focus should be on affordable housing.
“We think it is legally impossible for the Development Authority of Fulton County to meet the ‘substantial benefit’ burden to the public — a substantial benefit to the public — when you’ve got elected bodies in Atlanta saying, ‘Not only are they not a benefit. They are a burden, please stop’,” Woodham said.
But DAFC’s attorney, Cary Ichter, said that his client is doing exactly what state law allows.
“The development authorities law tells the court what it has to look at in that regard. If you take a look … it says that this chapter shall be ‘liberally construed’ to affect the purposes hereof,” Ichter said. “And it tells us what the purposes hereof are, and unsurprisingly they have to do with promoting economic development and job creation.”
Brasher asked both sides to submit proposed final orders by Tuesday close of business.
Despite its name and jurisdiction, the Development Authority of Fulton County doesn’t answer to the Fulton County Commission, exactly. Commissioners appointment members, but DAFC itself is a creation of the state.
Any legal change to what DAFC does would start in the Georgia Legislature. Their session begins Jan. 11.
In 2019 and 2020, DAFC and Invest Atlanta granted preliminary or final approval tax breaks worth $240 million over 10 years in Atlanta, in the name of economic development.
Check out the whole virtual hearing here.