Robert J. Shaw, chairman
Development Authority of Fulton County
As the chairman of the Development Authority of Fulton County (DAFC), I feel obliged to respond to the recently published commentaries by John Sherman and Bill Bozarth, (Buckhead Reporter Dec. 12-25 edition) both of whom criticized projects financed under the DAFC’s taxable bond program.
My impression is that both men oppose the taxable bonds with tax incentives only to the extent that those bonds are used to finance “high-end projects.”
If this is true, I appreciate their implicit acknowledgment of the importance of this financing technique as the primary economic development tool used on a widespread basis within metropolitan Atlanta and throughout Georgia. Because of certain constitutional and legal constraints, Georgia is at a decided disadvantage when competing against other states for new business investment.
The construction of the Kia automotive plant in West Point and the corporate relocations of Invesco, Cousins Properties and Newell Rubbermaid represent instances in which this financing technique brought quality companies to Georgia or Fulton County. Tax incentives are absolutely essential to attracting new businesses in today’s highly competitive economic development climate.
The DAFC’s primary focus is on projects that expand the tax base and create or retain employment opportunities in Fulton County, and all portions of Fulton have benefited from the DAFC’s efforts over the years.
The DAFC is more concerned about the number and quality of jobs created by projects that might not otherwise be built than whether such projects could be characterized as “high-end” or “luxurious.” Hospitality positions created by these hotel projects in Buckhead or anywhere else in Fulton County represent important opportunities for unemployed or underemployed residents.
With the economic problems in metropolitan Atlanta and the budgetary challenges to local governments, I question the wisdom of Mr. Sherman’s assertion that new development and employment opportunities should be exported to “depressed areas of the state.”
To expand the tax base and create jobs, the DAFC, working in conjunction with the Fulton County Board of Assessors, issues taxable bonds with future tax incentives for projects that would not have otherwise been developed. Without such incentives, these projects would likely have been developed in some of the other counties in metropolitan Atlanta, which tend to be more aggressive than Fulton County in offering tax incentives.
Finally, I need to clarify a couple of misconceptions in the two published commentaries. First, the DAFC does not grant “tax abatements” for existing buildings or anything else. Rather, the DAFC, working with the Board of Assessors, issues taxable bonds for new construction or acquisition of real or personal property. If the value of an existing building has dropped precipitously, to the extent that its assessed value may be reduced, the DAFC would consider issuing taxable bonds to facilitate the acquisition and renovation of that building. Otherwise, such a deteriorating asset would be a burden on taxpayers because of shrinkage of the tax base.
Second, the assertion that the DAFC approves virtually every deal is incorrect. For every DAFC taxable bond issue, nearly twice as many proposed projects are rejected by DAFC staff, working in conjunction with DAFC counsel. The DAFC relies on its professional staff and does not need its legal counsel to “recommend” projects or to provide anything other than legal input.
The DAFC has a proud record of service to Fulton County since 1973. Rather than imposing additional and unfair tax burdens upon taxpayers, the DAFC has helped with the relocation of important corporations to Georgia, facilitated billions of dollars of new development that expanded the tax base and fostered the creation of thousands of employment opportunities within Fulton County.