The Riverwalk project, targeted for a 7-acre site near the new Braves stadium and backed by mega-developer John Williams, didn’t qualify for county incentives because it would not create the required 25 jobs and $500,000 jolt to the county’s tax digest.
Despite the recommendation of the county, the Development Authority, chaired by banker Clark Hungerford, is forging ahead with property tax abatements that could cost the Cobb School District millions of dollars.
The Authority has granted Riverwalk developers a reduced tax rate that would generate $3.5 million in school taxes over 10 years, compared to the $7.8 million it would generate if built without tax breaks.
Development Authority Executive Director Nelson Geter, an economic development manager for the Cobb Chamber of Commerce, told the MDJ last month the unelected authority typically follows the lead of the county Board of Commissioners, but it has the power to act independently, lowering its
standards and bucking those recommendations.
And that’s exactly what happened.
In the process, critics emerged, not the least of which is the Cobb School District, which filed a legal challenge to the revenue bonds that would finance the project.
Others requesting similar incentives
In the wake of the Riverwalk deal, MDJ has learned other real estate developers have approached Hungerford and asked for tax breaks for their properties. Those businesses have been referred to the Board of Tax Assessors.
But the Tax Assessors are not responsible for doling out incentives, which must first be offered by the Development Authority, and play only a procedural role in setting values on parcels of land.
The Cobb Board of Education rejected the Development Authority’s last-ditch offer Wednesday and the outcome of the school system’s challenge to the bonds will now be decided in court. A bond validation hearing is set for 10:30 a.m. today in Superior Court Judge Michael Stoddard’s courtroom.
Ott opposes deal
Meanwhile, Commissioner Bob Ott, who represents the Cumberland area, said Tuesday he does not approve of the Development Authority’s incentives offer and has let his two appointees on the board, Karen Hallacy and Donna Rowe, know where he stands.
“When it first came to the county, I told (attorney) John Moore, their representative, that I didn’t think it was appropriate,” Ott said. “There are none of the other developments in the area that have incentives, so no, I don’t support it.”
Ott also said he thinks elected officials should have the final say in doling out tax breaks and supports the proposal put forth by Rep. Rich Golick (R-Smyrna) that would require the Board of Commissioners to approve any special tax deals the Development Authority offers to a developer.
“I think it would be appropriate for the Board of Commissioners to have the final say because we are the elected body,” Ott said.
Attorney raised concerns
The 25 jobs needed to qualify for incentives would never be created, according to emails sent by Cobb Finance Director Jim Pehrson and obtained by the MDJ through the Georgia Open Records Act.
“I know the added employee count is in question, and my assessment is that no new employees would be added,” Pehrson wrote in an email on Sept. 30 to Michael Hughes, director of the county’s Office of Economic Development, who oversaw the county’s Economic Incentives Review Committee. That committee was charged with reviewing the merits of Riverwalk’s application for fee waivers.
“Because of this, I would not be in favor of recommending offering any incentive as I do not think the current ordinance would allow such an offer,” Pehrson said in another email.
County Attorney Deborah Dance told Hughes in a Sept. 20 email she was “uncomfortable with providing approval, given the limited information supplied and my understanding of the limited functions of the (Economic Incentive Review Committee).”
Dance said a “more sufficient explanation than what was presented on the application” was needed to satisfy the requirement that 25 jobs be created before incentives are doled out.
“I would expect to see, for example, a representation from the applicant that the required number of jobs are ‘new’ to Cobb specifically, as well as a breakdown of those jobs as requested on the application,” Dance wrote in the email.
She said Riverwalk’s application didn’t indicate any jobs created would be new to Cobb.
Preferred Apartment Communities, the company Riverwalk backer John Williams is behind, plans to relocate its headquarters to the proposed office tower, Hughes wrote in a Sept. 30 response to Dance’s concerns.
Those jobs already exist in the Cumberland area of Cobb and wouldn’t be considered new.
It wasn’t clear, Hughes said, if the remaining tenants of Riverwalk would be new jobs to Cobb, though Tad Leithead, consultant for the project, told Cobb officials Riverwalk would bring 293 new jobs.
Hughes also said a financial analysis indicated the project would not provide the needed $500,000 to the county’s tax digest.