The State Farm
tower rises along Hammond Drive in Dunwoody. State Farm was seeking a total of
$48.6 million in tax incentives for three office towers, but it withdrew a
request for $15 million of that amount that would have helped offset costs of
construction of the first tower that’s nearly completed.
Like a good
neighbor, State Farm is there — but your tax money isn’t. The nation’s largest
property insurance company backed off its pursuit of $15 million in tax incentives to build a Dunwoody office tower
that’s almost completely constructed, said spokesman Justin Tomczak in a
statement Monday.
State Farm
withdrew its request for a property tax break amid questions from Dunwoody’s
economic development board about its necessity, since the company had already committed to consolidate offices on the 17-acre campus near Perimeter
Mall. Tax incentives are usually designed to encourage businesses to relocate
or expand.
The insurer and
its developer, Dallas-based KDC, still intend to seek $34 million in public
support for two more office towers being considered for the site.
The first
office tower is scheduled to open by the end of this year, with 13 stories of
office space and eight levels of above-grade parking.
“State Farm is in Dunwoody. Therefore, they’re going to build out whether we give
them a tax abatement or not. That’s not my opinion; that’s a fact,” said Bill
Robinson, the vice chairman of the Dunwoody Development Authority. When State Farm
decided against seeking tax breaks for the first office tower, “that relieved
what might have been a problem for them,” he said.
Public financial support for business development projects like State Farm’s comes from a
discount on property taxes the company would otherwise pay to DeKalb’s school
system, county government and city’s government.
The Dunwoody
Development Authority, made up of citizens appointed by the city’s council and
mayor, has the power under state law to give tax abatements.
“Everyone
understands that, to provide a tax abatement for a project that’s almost
finished, made very little sense,” said Robert Wittenstein, president of the
Dunwoody Homeowners Association. “These abatements are somewhat controversial,
and they (development authority members) try to use them judiciously.”
The
almost-finished office tower is a $175 million real property investment, and it
will become the workplace for about 2,500 State Farm employees with average wages
of $56,500, according to a fiscal impact study by the Georgia Tech Enterprise
Innovation Institute.
It’s unclear
when or if the next two towers would be built. They would add another 5,000
workers to State Farm’s Dunwoody campus.
The developer
had said State Farm needed the full amount of the tax incentives — $48.6
million for all three buildings — to move up its construction schedule and
break ground on the project’s second phase next year. Under the project’s
original schedule, work on the next buildings wouldn’t start until 2020.
The Dunwoody
Development Authority will require a guarantee that the second phase starts in
2017 or 2018 before it awards the tax incentives, said Michael Starling, the
city’s economic development director.
In all, the project represents $595 million in real property investment over the next five
years, according to the Georgia Tech study. The three buildings will provide
about 1.8 million square feet of office space, and a fourth building could be
added in the future.
Sen. Fran
Millar, whose district covers Dunwoody, said tax incentives should be
negotiated before a company begins construction.
“Why would we
give money for something that’s already built?” asked Millar, R-Atlanta.
“Coming back after the fact like that doesn’t look very good. If they had
negotiated it up front, they probably would have gotten it for the first
building.”
The authority could
consider whether to award tax breaks for the next two State Farm buildings at a
meeting tentatively planned for late October.
Related
http://www.myajc.com/news/news/local-govt-politics/no-tax-break-for-dunwoody-state-farm-tower/nsbXj/
Comments
The
Dunwoody Development Authority had already granted $83 million to State
Farm. The tax abatement was for $500
thousand a year for 17 years.
Norb
Leahy, Dunwoody GA Tea Party Leader
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