Dunwoody Development
Authority approves $780 million in tax abatement resolutions by Dyana Bagby,
7/29/16, Reporter Newspapers
The Dunwoody Development Authority
voted July 28 to approve $780 million in “inducement resolutions” for two
separate development projects in the Perimeter Center, including two additional
buildings as part of the State Farm hub and a new office building to be located
in a corner of the parking lot of Perimeter Mall.
The Development Authority approved the
resolutions to issue revenue bonds totaling $650 million for the State Farm
project that will include two new office buildings that will also include
restaurant and retail space built on the current Hammond Exchange building
site. Construction on Phase 2 of the State Farm hub – the first phase is the
building currently under construction on Hammond Drive – could start as soon as
next year, according to KDC, developers for the project.
State Farm is expected to save some
$48 million in property taxes from the city, DeKalb County and the DeKalb
County School District over 17 years of the tax abatement, according to a
financial analysis by Georgia Tech’s Enterprise Innovation Institute. The
project is expected to bring in 2,200 new jobs to Dunwoody.
The authority also voted to approve
the resolution to issue $130 million in revenue bonds for developer
Transwestern to build a 16-story office building nearly directly across the
street from the State Farm complex on a corner of the Perimeter Mall parking
lot and adjacent to the Dunwoody MARTA station.
Transwestern will save approximately
$14.5 million in property taxes over 12 years, according to Georgia Tech. The
project is a speculative project — meaning no tenants are signed on to locate
there — so how many jobs the project will bring to Dunwoody is uncertain.
Transwestern estimates the project will bring nearly 2,500 jobs to the city.
The resolutions are not the final
approval of the projects, said Michael Starling, director of Economic
Development for Dunwoody and also the executive director of the Development
Authority.
“Inducements resolutions are fairly
broad and say we agree to talk and move forward on the project,” Starling said.
The corporations and development
authority will eventually have to sign a formal “memorandum of understanding”
that will outline the specifics of the tax abatements, he said. The Development
Authority will likely meet again in October to go over the final MOUs, he said.
While the Dunwoody Development
Authority has a close relationship with the city, it is its own separate entity
and City Council approval is not needed to approve the tax abatements, Starling
said.
Taxpayers are also not at risk with
the issuance of revenue bonds, explained Carlianne Patrick, economics professor
at Georgia State University’s Andrew Young School of Policy Studies. “The
public is not on the hook,” she said.
Comments
The AJC
article indicated that the city of Dunwoody would be the landlord and lease the
space. It sure sounds like the city is
“on the hook”. It also quoted 7500 jobs,
not 4700 jobs.
Several
cities in California have gone bankrupt backing “economic development” projects
that failed and the cities got stuck with the bill.
If this
is just a “pea and shell game” to get a “tax holiday”, then Dunwoody voters
need a full disclosure explaining the deal.
It could mean that the city buys the land and a property company owns
and pays for the building, so we need to know how the city pays for the land in
order to give the property tax abatement and for how long.
Einstein
said: ‘If you can’t explain it clearly, you don’t understand it well enough’.
Norb
Leahy, Dunwoody GA Tea Party Leader
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