By Jody Steinberg
The controversy over the tax abatement proposed for the Sembler Co.’s Town Brookhaven has driven the DeKalb County Office of Economic Development (OED) and the county Development Authority to revise their incentive policy for attracting business investments.
Sembler consultant KPMG asked for a 20-year, 100 percent abatement from property taxes on two buildings not yet constructed at the Brookhaven development. The request focused public attention on the obscure board of volunteers with the power to grant a $52 million tax break.
At a time of government budget cuts and uncertain revenues, watchdogs and some elected officials question the authority and its right to negotiate with current and future tax dollars. The hard-to-measure impact on schools, infrastructure and the economy needs to be weighed against the need and justification for each recipient.
Since 1974, the Development Authority has packaged bonds and approved tax exemptions to support the initiatives of the OED, but it does not provide public funds, grants or credit guarantees. The OED has a much bigger bag of services and financial tools to attract new enterprises and strengthen existing businesses, including tax exemptions and credits, real estate and financial grants, site location assistance, and project management.
But the Town Brookhaven debate has shown that the OED lacks the right tools for the current economy. A financial consultant hired by the authority called DeKalb’s economic development policy “conservative” and found the KPMG proposal unusually aggressive and a significant departure from policy.
CEO Burrell Ellis urged the authority to draft a comprehensive incentive policy that reflects both the current economy and best practices in economic development. That task falls to the OED’s director, Maria Mullins, and her staff.
“Our policies are based in another era,” she said. “Today, we’re competing with every (municipality) in the country. Our new incentive policy has to be aggressive and address the real needs of businesses so they will want to come here and put people to work.”
Supporting the Development Authority is only a small part of the work of the OED, Mullins said. Recent initiatives include a small-business retention program, a biolife sciences and innovation initiative, support for retail business distribution, the search for partners to redevelop the former General Motors site in Doraville and 150 acres near I-285 and I-20, and the identification of businesses to redevelop derelict properties in high-potential areas.
Mullins said the last category applies to the apartment complex that was torn down to build Town Brookhaven.
Many DeKalb residents, led by state Rep. Mike Jacobs (R-Brookhaven) and including county commissioners, the county Board of Education and the Ashford Alliance Community Association, objected to the $52 million abatement proposal for Town Brookhaven. The criticism included the lack of any required approval from elected officials, the departure from past Development Authority practices, the advantage Town Brookhaven would have over competing businesses, the precedent it would set for other developers, the county’s inability to afford it, and the fact Sembler had agreed to a significant 10-year tax exemption in December.
Mullins said the kind of publicity the Sembler deal received undermines the authority and the OED because companies want to make business moves quietly to stay ahead of the competition.
She pointed to the recent decision by NCR to relocate its headquarters and 1,000 jobs from Ohio to Gwinnett County. In the competition to attract business, local governments use an ever-growing menu of tax breaks and incentives.