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Fulton commercial tax breaks get a day in court

A picture of a sign showing the logo of the Development Authority of Fulton County

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.

Documents:

Check out the whole virtual hearing here.

 

 

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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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4 Comments

  1. Steve December 29, 2020 10:05 am

    Thanks for another informative article.
    I am a Capitol View resident and was involved with discussions with the Exide Devopment. The developer Rangewater had no discussion with neighborhood prior to their initial presentation and responded to our concerns with a not in the interest of our investors to our suggestions. They also misrepresented them selves at the second Fulton County Tax meeting suggesting they had discussion with the neighborhood and stating they were a pioneer with Lee/White a 10 minute walk down the Beltline. The meeting only allow for concerned parties to comment before the meeting and not respond to comments at the meeting by the developers. They also suggested they were a pioneer developer and needed money to secure the success. At the end of the meeting they parted ways in a manner that the Commision and developers new each other.

    As a longtime resident of Atlanta it seems another good buddy seal.

    As the article states the city of Atlanta has asked has asked Fulton County to stop. In
    My opinion the taxes breaks by Fulton County, the City of Atlanta and the State of Ga need to stop giving tax breaks to successful businesses to develop. It is raising property tax and the cost of living to long time residents.Report

    Reply
  2. Larry Savage December 29, 2020 10:59 am

    This goes on all around Metro Atlanta. The law DOES NOT provide for tax breaks. Tax breaks are not mentioned in the law. The words “tax abatement” do not appear anywhere in Official Code of Georgia. The Development Authorities law has PAGES of requirments that must be met but DAFC and other Authorities say they are not required to follow the law, that they can do AMYTHING they want as long as their Board members vote for it.
    I have argued several of these things in Cobb Courts. I have never lost on the law, always on ‘procedural’ matters, such as my briefs getting lost in the courthouse. On one occasion I got a favorable ruling. Unfortunately Kroger appealed to GA Supreme Court. The Court ruled for Kroger based on comments from the judge in Cobb. The Court declined to rule on the issues I had raised.
    This entire enterprise of tax breaks for the rich and powerful stinks to high heaven. It probably should be investigated as a RICO crime. The bond lawyers and developers make out well while other taxpayers pick up the slack, then the lawyers kick back part of he money to the DAFC and other Authorities.Report

    Reply
  3. Mary Margaret Oliver January 1, 2021 10:38 pm

    Please note my prefiling of HB 23, HB 24, and HB 25 in the Georgia House to create more transparency tax abatements and bond validation hearings. Thank you.
    Mary Margaret OliverReport

    Reply
    1. Jim Bob January 4, 2021 8:41 pm

      Keep up the good work Ms. Oliver. The light of day needs to be shown on these deals. It makes no sense to incentivize companies to build developments in metro Atlanta’s hottest areas.Report

      Reply

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