The Dunwoody City Council approved a tax break and fee waiver plan in an effort to incentivize large businesses to come to town at a March 8 meeting.

City Economic Development Director Michael Starling first presented the incentive plan at a January council meeting. The plan would mark the first time the city has directly offered incentives to businesses. 

Starling said Dunwoody has traditionally relied on its location to draw in businesses, but many of its surrounding cities offer abatements on business licenses, permit fees or both. He said vacancy in Dunwoody offices is significantly higher than in some of those cities.

According to Starling, vacancy in Dunwoody is at about 24%. For comparison, vacancy in Atlanta’s Midtown neighborhood is at 16% and in Cobb County’s Cumberland Galleria area is at 14%. The rest of the Perimeter area is about 19%.

The city-level plan could be in addition to incentives offered by other state, county and municipal bodies, such as the Dunwoody Development Authority.

“We’re entering uncharted territory for office leasing due to COVID-19 and added incentives from the city can make a huge difference,” Starling said. “Especially when they are part of the overall package that may include incentives from the Development Authority, and the state when the company is relocating from outside of Georgia.”

The plan would incentivize businesses to come to Dunwoody through means such as expediting the permitting process required for a new business location or expansion.

Another incentive would waive business and occupation taxes. According to documents from the meeting, the city would have the opportunity to waive 50% of business license taxes totaling up to $50,000 on an annual basis. The waiver would continue for the entirety of the lease as long as the lease did not exceed 10 years. 

To qualify for the plan, businesses would have to meet certain criteria, including creating 500 or more full-time positions where at least 75% of those jobs meet the average wage level in DeKalb County. Eligible businesses would also have to lease or purchase an office space of 100,000 square feet or more, and if leasing, sign a lease with a minimum 7-year term. 

Councilmember John Heneghan expressed concern that a developer could receive incentives from both the city and the Development Authority, a quasi-government board that votes on tax break deals with developers. 

Starling said there would be a possibility for incentives from the plan to be layered with incentives from the Development Authority, but they would be separate entities. He said while tax abatements given to developers are typically passed onto the tenants of those buildings, this new incentive plan would offer incentives directly to the businesses themselves. 

Starling said businesses that applied for incentives would not be required to come before the council for approval. 

“It would be more like a permit in that,” he said. “”[That’s] one of the reasons we’ve created such a high bar … we didn’t want to make it too small, that every business in the city could get it.” 

Starling said an application process has not been set up yet, but now that the plan has been approved the city will begin work on one. Councilmember Joe Seconder suggested the council could still be notified when a business received an incentive, even if it did not have final approval. 

Mayor Lynn Deutsch agreed with Seconder and asked to include a “sunset clause” that would bring the policy back before the council for evaluation every two years.