Cobb Board of Education Chairman Randy Scamihorn said his board will review the offer Tuesday before deciding what to do.
The school board has filed a challenge in Cobb Superior Court to the bonds being issued by the Development Authority to underwrite the $103 million project, which includes apartments and an office tower backed by real estate tycoon John Williams.
Authority Chairman Clark Hungerford said the school board needs to accept the settlement agreement and drop its challenge to the bond validation so the $103 million development can go forward.
“If they don’t accept the settlement offer, I can’t tell you whether or not the developer will try to develop the property or not,” said Hungerford, an executive with Vinings Bank.
In its undeveloped state, the raw land of the proposed site would generate annual school tax revenue of $46,433, or $464,331 over the 10-year term of the deal.
If Riverview were to be constructed without a tax break, the school district would receive $7.8 million in tax revenue over the 10-year span, Hungerford said.
The Development Authority, however, has granted the Riverwalk development a tax break that would generate $3.5 million in school taxes over the 10-year span.
Taxes not waived during construction
Hungerford said part of the settlement would ensure that no taxing authority, whether it be the school board, city or county, would lose revenue during the construction period of a new development.
Tad Leithead, Riverview’s consultant, told Development Authority members during the meeting that his company had offered the school district a settlement in a Dec. 18 letter.
“There would have been no property taxes paid to the school board for ’14, ’15 and ’16 (during the construction phase of the development),” Leithead said.
That would be the $46,433 amount times three.
“Our offer to them is to pay those taxes — payment in lieu of taxes — on the date that those taxes would otherwise have been collected, Oct. 15, in the years ’14, ’15, and ’16 so that they are made whole if you will and then the incentives would kick in.”
The Development Authority also voted unanimously to revise its policy on notifying the school system whenever it takes action to approve an application for tax abatement. “So they are made aware of any pending applications,” Hungerford said.
Violating the Sunshine laws?
The Development Authority met behind closed doors for more than an hour before opening the meeting back up to the public.
The MDJ asked the attorney for the Georgia Press Association, David Hudson, if the Development Authority was allowed to meet in closed session to discuss a communications policy.
“There is no exception (to the Georgia Open Meetings Act) that allows ‘policy’ matters to be discussed in a closed session,” Hudson said.
Yet Hungerford defended the closed meeting.
“There are legal actions being taken against the Development Authority,” Hungerford said. “We are allowed to go in there and discuss those matters. This is a part of the settlement to try to settle that matter, so it falls within that, our attorney-client privilege to discuss matters that will allow for the settlement of litigation.”
Scamihorn, who attended the open part of the meeting, said afterward he wanted the school board to review the proposal.
“I do know that both sides are hopeful to find a good outcome,” Scamihorn said. “We’re all Cobb Countians, we’re all on the same team, so it’s not a matter of us against them, it’s a matter of how do we move forward and have the best process for the citizens of Cobb County.”
Development Authority members include Bob Morgan, a CPA with Marietta-based Cerqueda, Morgan & Collins; Realtor Donna Rowe; Richard Moore, managing director of external affairs for AGL Resources; retirement planner Al Searcy; Karen Hallacy, who is challenging state Rep. Matt Dollar (R-east Cobb) in the Republican primary; and Blake Kenya, owner of a landscaping business.