Attorney tries to hush development board’s dialogue on tax breaks
by Jon Gillooly
December 18, 2013 12:40 AM | 4648 views | 11 11 comments | 12 12 recommendations | email to a friend | print
Karen Hallacy, board member of the Development Authority of Cobb County, addresses chairman Clark Hungerford, not pictured, with board member Al Searcy seated next to her Tuesday. <br>Staff/Jeff Stanton
Karen Hallacy, board member of the Development Authority of Cobb County, addresses chairman Clark Hungerford, not pictured, with board member Al Searcy seated next to her Tuesday.
Staff/Jeff Stanton
MARIETTA — The Development Authority of Cobb County’s attorney on Tuesday tried to quash a discussion of that agency’s controversial practice of handing out tax breaks that slash future school revenue to developers.

At the same meeting, Development Authority board member Karen Hallacy called for reform in the way the agency makes its decisions.

The Development Authority, an unelected board whose members are appointed by county commissioners, granted a 10-year tax abatement to the proposed $103 million “Riverwalk” apartment and office project planned for the Cumberland/Galleria area by mega-developer John Williams.

During its Tuesday meeting, Authority Chairman Clark Hungerford asked attorney Dan McRae if he had any legal updates to give the board.

“No report,” said McRae, in spite of the fact that earlier that morning the Cobb School District was objecting in Cobb Superior Court to Williams’ tax break.

Is it legal?

Sen. Lindsey Tippins (R-west Cobb) on Monday questioned the constitutionality of the Development Authority granting tax breaks that impact school revenue when the school district has no representation on the Authority. Authority board member Bob Morgan asked McRae about that question.

“Has that been adjudicated before?” Morgan asked.

McRae encouraged discussion, but only behind closed doors.

“If this is a question about pending litigation to be discussed, I ask that it be done in executive session,” said McRae, who has also been hired by county Chairman Tim Lee to work on the county’s deal with the Atlanta Braves.

Hungerford then asked McRae to disclose what he knew about the morning’s legal hearing, at which point McRae finally revealed that the Cobb School District had filed “interventions” against the Williams’ development. The judge had continued the case, McRae said, until Dec. 30.

“We’re giving you as much information as we know, which is not much,” Hungerford told the board. “We will definitely know more and we will communicate that once we know.”

Hallacy wants reform

Hallacy, who recently announced she is challenging state Rep. Matt Dollar (R-east Cobb) in next year’s primary, had more to say about the subject.

Hallacy passed out a Dec. 11 letter she sent to Hungerford in which she called for improving the Development Authority’s decision process. Better communication was needed with the Cobb Board of Education, Hallacy said, suggesting that perhaps a new member could be added to the authority to represent the school district, a suggestion state Sen. Hunter Hill (R-Smyrna) made on Monday.

Hungerford said Hallacy’s request was legitimate, although he defended existing practices.

“I do say that everything we’ve done is open record, is on the table for everybody to look at, and we can figure out if there’s additional ways that maybe we need to communicate that we haven’t over the past for the last 30-plus years or last 40 years,” Hungerford said. “The Development Authority has worked pretty well in conjunction with all the elected bodies represented. If there’s ways to improve it as things change, maybe we need to look at those things.”

Members defend tax breaks

Board members defended their vote granting the tax break to Williams’ development after the meeting.

“John Williams has done a lot for Cobb County, but that doesn’t really have anything to do with our vote on this,” said Morgan, a CPA with Marietta-based Cerqueda, Morgan & Collins. “We voted on the project. It looked like it would be something that would be good for the county.”

An appointee of Commissioner Helen Goreham, Morgan said he was unaware when voting on the tax break that the Cobb School District faced a $79 million shortfall.

“But I think we would have done it anyway because you got to look at the long term,” Morgan said. “Ten years from now, they’re going to be getting $700,000 a year property tax instead of $40,000. I don’t know of any businessman that wouldn’t look at this deal and say, ‘I’ll take that.’”

Hallacy, an appointee of Commissioner Bob Ott, said she voted for the tax break based on the information she was given at the time.

“The question I asked is would this move forward without the tax abatements and the answer (from Williams’ consultant, Tad Leithead) was unequivocally, ‘no,’” Hallacy said.

Hallacy pointed out that when Leithead gave his initial presentation on the development in September, it wasn’t public knowledge that the Braves were planning to move nearby.

“I don’t know if he knew about the Braves. I know that we didn’t know about the Braves,” Hallacy said. “But I think that the questions that I asked were the best ones that I knew at the time.”

Communication, Hallacy said, should be done the way it was in 2005, when Sam Olens was county chairman and Kathie Johnstone was school board chairwoman.

“Years ago, when Sam was commissioner and Kathie Johnstone was chair of the school board they tried to have meetings informal — coffee, no decision process going on, no quorum, no policies being made — just what’s going on in your backyard, what’s going on in my backyard,” Hallacy said. “I think that that is critical.”

Hallacy said she hopes the Development Authority will iron out the communication problems in January.

McRae, the Development Authority attorney, declined to be interviewed after the meeting.

Comments-icon Post a Comment
Diamond Jim
December 19, 2013
Good lord!! Lawyer McRae has an obvious conflict of interest since he has been hired by Lee to work on the Braves deal, and is trying to stifle open discussion and move it all behind closed doors. Oh, what a tangled web they weave! This whole deal is beginning to smell to high heaven, and it appears that Karen Hallacy is the only member of the Development Board trying to make their process more transparent and efficient. It also appears that the Board was not given adequate information on the Braves deal ahead of deciding on tax breaks for Williams. I think it is time to rescind the deal and call Williams's bluff. If he wants to pick up his marbles and go home, let him! My bet is that he won't--he has too much to gain. The stadium development will help create a market for his overpriced apartments and condos, and I'm sick and tired of taxpayers being asked to subsidize moguls like Williams and Arthur Blank. Time for the state to step in and tighten restrictions on how these unelected boards operate---and past time for some new commissioners in Cobb.
December 19, 2013
These super rich white good ole boy RINO’s have been robbing the taxpayer’s blind, we all have questioned this as unconstitutional all along and the Cobb county commission had as legal reasonability to protect the tax payers. If you raise taxes you have bring it forward and the public has a right to speak the same is true of lowering taxes this invisible empire the CID has nullified the taxpayers right of appeal. Tim sounds like Obama they aren’t sure they don’t know; you know Tim has all that CID & Cobb chamber money and he has the secret ring to go with it.
Cobb School Advocate
December 18, 2013
Dear Authority,

Considering the close present and past ties to the Cobb School District, where is the "finanncial impact analysis" Mr. Hungerford, Mr. Searcy and Mrs. Hallacy - can't claim like Morgan that he know "nothing".

Maybe the Cobb taxpayers need to flush this board and bring in some serious citizens ?
December 18, 2013
Thank goodnees that at least one member of the Deveopmental Board seems to GET IT! I totally agree with Karen Hallacy's comment that we need more communication between the various boards.
Lib in Cobb
December 18, 2013
It has been reported the the state of GA is looking at the legality of this tax forgiveness deal.
Kennesaw Resident
December 18, 2013
I don't think this is a communication issue at all. I think it may very well be an issue of corruption in the banana republic we now live in.
Wrong decision
December 18, 2013
Ten years down the road is too long when you have schools and children who are not getting what they need. Taking away that $40,000 now to say that 10 years from now you will be getting $700,000 doesn't make sense. Every time the schools turn around, it will be less money because now The Weather Channel doesn't want to pay taxes. Ridiculous! The richer get richer and everyone else is left suffering.
December 18, 2013
So a businessman that could actually afford to pay the taxes gets a tax break or else he will take his ball elsewhere. And seven losers with no accountability, desperate to fall into the good graces of this condition-laden businessman, accept such brinksmanship with a smile, supplying the grease to get it done. Or is that vaseline, of which these mighty seven are surely in great supply. This kind of business doesn't take finesse, skill, diligence, time or anything else. It takes money, influence, seven accomplices, a board willing to look the other way, and about 500 Mexicans to build the joint.
Just Wait
December 18, 2013
Hallicy is a true politician. AFTER she votes to give a tax break to a wealthy developer, she wants to change the way the Authority works. She will represent the people of east Cobb well.
December 18, 2013
The Development Authority giving tax breaks to developers that hurt our schools is outrageous. Let me explain something else to these "developmentally" challenged board members and I hope they read this slowly....TAX ABATEMENT often is simply just TAX SHIFTING, because by excusing one person from paying taxes just means others (homeowners, existing businesses, etc.) have to pick up their tab for governmental operations. THIS IS JUST WRONG.
Family Ties
December 18, 2013
One would think than communication between the the CDA and the BOE would be better, given that Mr. Hungerford's wife is the #2 person at the school system.
*We welcome your comments on the stories and issues of the day and seek to provide a forum for the community to voice opinions. All comments are subject to moderator approval before being made visible on the website but are not edited. The use of profanity, obscene and vulgar language, hate speech, and racial slurs is strictly prohibited. Advertisements, promotions, and spam will also be rejected. Please read our terms of service for full guides