The city of Dunwoody is considering a system of tax and fee waivers and other incentives for businesses to come to town. The plan would be a first for the city, hoping to draw in large-office users.
Michael Starling, the city’s economic development director, presented the incentive plan at a Jan. 11 City Council meeting. The system would be separate from the Dunwoody Development Authority, which offers tax abatements for developments through a different mechanism of tax-free bonds. And it would be a change in long-standing policy.
“Since Dunwoody was created, we made a conscious decision not to offer incentives from the city,” Starling said to the council. “We rely on our low office rents, as well as tax abatements from the Development Authority. But we are entering a sort of uncharted territory here with COVID-19, and I think this is a good opportunity to look at offering what many of the other cities around us offer, which is an incentive directly from the city.”
As COVID-19 numbers continue to climb in the state, many offices sit vacant. The plan would attempt to help fill those empty offices with such incentives as expedited permitting processes and waivers of business and occupation taxes. To qualify, companies would have to lease spaces of at least 100,000 square feet; create at least 500 jobs; sign leases of at least 10 years; and invest at least $4 million in furniture, fixtures and equipment.
“We are constantly looking at our policies and checking them against other communities that are around us,” Starling said in a phone interview. “And this has been something that’s been on our radar for quite some time. It just seems like this is the right time to bring it forward.”
In Dunwoody, incentives traditionally have been handled by the Development Authority and its tax abatement process. In Georgia, development authorities can be formed by cities or counties. In recent years, development authorities have come under scrutiny for offering tax breaks to projects in hot real estate markets, and for governmental disputes between cities and counties over whose development authority should grant such breaks and when. The Fulton County and Atlanta authorities recently butted heads over jurisdiction. DeKalb County and the city of Brookhaven have had several disputes about tax breaks granted by their respective development authorities, sometimes with the city objecting and, more recently, with the county in the role of abatement-challenger.
Some Dunwoody council members expressed concern over the incentive plan’s relationship to the Development Authority, a quasi-govermental body with a board that votes on tax break deals. The incentive plan proposed by Starling would involve a vote by City Council.
“I just want to make sure I understand that there’s no double bite at the apple in the sense of tax abatements,” said Councilmember John Heneghan.
Starling confirmed the incentive plan would be separate from the Development Authority.
“I would say that this is an opportunity to possibly package an incentive from the city with something that the Development Authority is looking at, but no,” Starling said. “Just the City Council would offer this.”
Starling said that in the short term, companies would be eligible even if most of their employees were working from home due to the pandemic, and expressed optimism for the future of the office market.
“We do believe that moving forward, there’s still gonna be high demand for office use,” Starling said in the interview. “A company that maybe before the pandemic would have taken more space, they might be leasing less space now. But we still think they’ll be in the market. So, if for the next year or two, the majority of their people are working remotely, that’s not going to impact our incentives.”
Starling said he plans on bringing the plan back to the council later this month.