Georgia grants $4 million incentive to BlackRock for Ponce officeBlackRock's Atlanta home: 725 Ponce, on the Eastside BeltLine. Credit: Kelly Jordan
BlackRock’s Atlanta home: 725 Ponce, on the Eastside BeltLine. Credit: Kelly Jordan
By Maggie Lee
Some 18 months after Georgia announced fund manager BlackRock would open a major office in Atlanta, the state revealed it’s granting $4 million to equip the company’s Eastside BeltLine office.
Georgia considers the $4 million a good investment.
The state was in the running an unknown number of other places for the BlackRock office, said Bert Brantley, COO of the Georgia Department of Economic Development.
“Just do some quick math on having 1,000 people making $130,000 a year. That’s a significant economic impact to the city, to the state,” Brantley said.
That’s because state plus local governments will eventually collect all kinds of sales, property and income taxes from those employees and the company.
Governments everywhere use tax breaks, grants or other subsidies to certain businesses on the argument that it’s a good thing to have a building, a robust business, or an employer in one’s jurisdiction.
The building BlackRock will occupy, 725 Ponce, itself got a property tax break worth $7.4 million over 10 years.
The city of Atlanta’s development authority last year also granted the company a personal property tax break worth about $700,000 over 10 years.
But it was awkward for some on Invest Atlanta’s board to vote a tax break to a company that manages nearly $7 trillion dollars.
Some Atlanta City Council members had already started making noise about wanting to spend their economic development money to boost small companies, Atlanta workers, or parts of town left behind by investment.
The idea there is that people, companies and parts of town that are already doing well don’t need the help.
BlackRock also asked Atlanta for a $500,000 grant. But Council never took up the 2019 legislation.
Granting money to a company in one of the more prosperous places in Georgia brings up issues of economic and geographic justice, said Kasia Tarczynska of Good Jobs First, a Washington, D.C.-based a policy resource center that tracks all kinds of government subsidies to companies nationwide.
The revenue “could have gone to areas of the state that truly need support,” she said.
Georgia first announced in late 2018 that it had successfully wooed BlackRock to a yet-undecided location in Atlanta. At the time, the Atlanta Journal-Constitution reported, the state was still negotiating its deal with BlackRock. But some multi-million dollar subsidy of some sort was expected.
Brantley said only a very small percent of the companies the state courts get such a grant — something on the order of 5% or so. These so-called Regional Economic Business Assistance (REBA) grants are a tool the state uses, he said, only when Georgia is in the running with other states.
But all companies can tap other tax breaks written into law: a job-creation incentive, a “mega-project” tax break and so on.
Tarczynska said it’s hard to know how much subsidy any given new company in Georgia gets, because the state doesn’t disclose individual recipients of those tax breaks.
The timing of the disclosure of the $4 million break might be a little awkward for the state. The governor, state Senate and state House are in annual budget negotiations, and dealing with $159 million in cuts.