The uproar began with a $103 million development planned for a site at Cobb Parkway and Cumberland Boulevard near the new Atlanta Braves stadium. Backed by wealthy developer John Williams, the Riverwalk development has been approved by the Cobb Board of Commissioners for 236 for-lease condos, 14 three-story townhome apartments and a 10-story office tower.
The project didn’t meet the county’s requirements of creating 25 jobs and contributing $500,000 to the tax digest. A waiver of fees and permits was rejected by a county committee, which included Cobb Chairman Tim Lee and County Manager David Hankerson.
But the Development Authority is moving ahead anyway with a more lucrative incentive — a 10-year tax abatement.
Development Authority members are appointed by county commissioners, but they don’t answer directly to voters and they have the ability to act on their own outside of Cobb’s guidelines.
The Authority approved offering a 10-year property tax abatement for the development and is now trying to get the bonds it would take to finance the development through Cobb Superior Court.
But the Cobb School District has mounted a challenge.
School system unhappy about losing tax revenue
Already facing an $80 million deficit, the Cobb School District spoke out against the proposed tax subsidy alleging it takes away the school system’s right to tax.
The school system argued the bonds “benefit a private developer and place the public’s funds at risk” and are a “gratuitous gift of public funds” in an official objection it filed with Cobb Superior Court.
Cobb Schools Chairman Randy Scamihorn told the MDJ he isn’t sure what the impact of the lost revenue would be on the county’s schools, but he thinks the schools should have been clued in earlier that a tax abatement was in the works.
The two parcels that make up the 7 acres of undeveloped land are valued at about $6.1 million for tax purposes, according to the Cobb County Tax Commissioner’s website. That raw land generated $46,433 for the Cobb School District in 2013 and $26,803 for the county.
If developed into a $100 million project, the site would pump more than 15 times that amount annually into county coffers, with $436,400 generated for the county and another $756,000 for Cobb schools, according to estimates provided by the county finance office.
But developers won’t be paying those taxes, if approved, and that could add up to more than $8 million in lost revenue for the schools and county government over the term of the 10-year abatement.
Legislators vow to rein in development authorities
Two hearings have been conducted in Cobb Superior Court, neither resulting in an agreement. Another hearing is set for 10:30 a.m. on Jan. 10 in Courtroom 2000. If the Development Authority and school system haven’t worked out an agreement by then, the court will hear arguments.
Local legislators have also raised concerns and indicated legislation may be introduced in the General Assembly’s upcoming 2014 session that could require local development authorities to consult with school districts before offering tax breaks.