School District rejects tax break settlement for Riverwalk project
by Nikki Wiley and Jon Gillooly
January 16, 2014 12:01 AM | 4216 views | 12 12 comments | 48 48 recommendations | email to a friend | print
Cobb County School Board <br> Staff/file
Cobb County School Board
Staff/file
slideshow
MARIETTA — The Cobb School District is moving forward with its legal challenge to tax breaks for a developer that would cost the district millions despite an 11th hour attempt to get the district to drop its case.

That attempt was made Tuesday when Chamber of Commerce and school officials arranged a meeting attended by such political heavy-hitters as Attorney General Sam Olens, County Chairman Tim Lee and former Gov. Roy Barnes.

But school officials would not be swayed.

To Lee’s great disappointment, the Board of Education voted unanimously Wednesday to reject a settlement offer put on the table by the Development Authority of Cobb County. The school board countered by requesting the Authority withdraw applications for a bond deal that would allow moving forward with the tax breaks offered to a development backed by real estate mogul John Williams.

The private meeting

Lee said Chamber CEO David Connell invited him to attend a private meeting Tuesday morning in the conference room of one of the Galleria office buildings. Present at that meeting were Olens, Barnes, Williams’ consultant Tad Leithead, Connell, Brooks Mathis, the chamber’s executive vice president of economic development; Development Authority Chairman Clark Hungerford; Cobb Superintendent Michael Hinojosa; Cobb Board of Education Chairwoman Kathleen Angelucci, Vice Chairman Randy Scamihorn; State Sen. Lindsey

Tippins (R-west Cobb) and school board attorney Clem Doyle.

Lee said he accepted Connell’s invitation so he could better understand the school board’s objection to the tax breaks granted by the Development Authority.

Lee said he agreed with the comment Olens made at the meeting that the school board was on a path that would harm future economic development efforts.

“If companies are looking at Cobb, and there’s any kind of uncertainty surrounding our process, it’s easy to skip over us and go to some place where there is certainty, so we’ll lose out on those opportunities,” Lee said.

Olens could not be reached for comment about why he attended the private meeting.

State Rep. Rich Golick (R-Smyrna) has announced a member of the Cobb Legislative Delegation will be filing legislation this session to reform the Development Authority. Golick says he wants to consider two points. One is to require the elected commissioners to have the final say on whatever tax break the unelected Development Authority grants a business. The other point is that if the Development Authority is going to decide on giving away millions of dollars earmarked for education to developers in the form of tax breaks, the school district should have a say in the matter.

The MDJ asked Lee how Cobb’s economic development opportunities would be jeopardized if the state legislation made the same requirements for neighboring counties such as Fulton and Gwinnett.

“It would put Georgia at a disadvantage with places like Birmingham,” Lee said of Golick’s proposal.

Gov. Nathan Deal apparently doesn’t have the desire for legislation reforming development authorities either.

“I have not talked to the governor, but from what I’ve been told, there is no appetite on the state level to deal with any revisions to the development authority legislation,” Lee said.

School board disappoints Tim Lee

Lee said he was highly disappointed the school board rejected the settlement offer from Hungerford.

“Very much so because the best way to solve issues is sitting around the table and discussing our differences and coming up with viable options and that hasn’t occurred aggressively,” Lee said.

The development, coined Riverwalk, includes 236 for-lease condos, 14 three-story townhome apartments and a 10-story office tower.

The Development Authority offered Riverwalk a 10-year graduated property tax abatement though the project didn’t meet the county’s requirement to qualify. That includes creating 25 jobs and a $500,000 economic impact.

School Board attorney Clem Doyle said in a letter Wednesday to the Development Authority that resolution will now have to be in court unless the Authority withdraws the request.

Resolution is now “entirely in the hands of the Development Authority of Cobb County and Riverview Office LLC” and withdrawing their bond validation request would allow parties to “step back and have a discussion about the issue of funding tax abatements with school taxes and the extent to which the school board should be excluded from that process,” Doyle wrote in the letter.

The school board’s suggestions follow an offer extended by the Development Authority last week that would provide $139,299 in property taxes during the three-year construction phase of the development.

Usually, developers receiving tax abatements are not required to pay any taxes, even those assessed the raw land, while construction is ongoing.

Judge to hear arguments this morning

Cobb Superior Court Senior Judge Michael Stoddard will hear arguments from the Development Authority and the school board today at 10:30 a.m. in Courtroom 2000. That hearing has been continued three times.

Doyle’s letter suggested that if the bond validation is not withdrawn, the county should develop and approve a tax abatement policy subject to approval by the Development Authority and the school board.

That policy, Doyle said, “should include a process that incorporates a reasonable and objective analysis of the costs (including the abatement) and benefits of each future project.”

The policy should take into account the number of jobs created, average pay for those jobs, value of real and person property, sales tax generated, increase in the level of services required by the county and the impact a company or development would have on the

environment.

Comments
(12)
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isn't it odd
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January 18, 2014
Isn't it odd that Bill Byrne has not had an opinion on this matter. He usually tries to get in on everything. "Me thinks" he is trying to hide while running for HELEN'S JOB.
Rico? Yes.
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January 18, 2014
The new "Dixie Mafia" (Barnes, Olens, Lee, Connell, Tippens, Leithead, Connell, Mathis, and Hungerford)Lead by the Godfather John Williams, made an overt attempt to intimidate the school board representatives. their should be a Grand Jury investigation conducted. You had a former Governor, the State Attorney General, County Chairman, State Representative, Chamber Director and others in high positions of power and authority. Straight out of the pages of the Godfather.

The RICO Act

Main article: Racketeer Influenced and Corrupt Organizations Act

On October 15, 1970, the Racketeer Influenced and Corrupt Organizations Act (18 U.S.C. §§ 1961–1968), commonly referred to as the "RICO Act", became United States law. The RICO Act allowed law enforcement to charge a person or group of people with racketeering, defined as committing multiple violations of certain varieties within a ten-year period. The purpose of the RICO Act was stated as "the elimination of the infiltration of organized crime and racketeering into legitimate organizations operating in interstate commerce". S.Rep. No. 617, 91st Cong., 1st Sess. 76 (1968). However, the statute is sufficiently broad to encompass illegal activities relating to any enterprise affecting interstate or foreign commerce.

Commerce is the whole system of an economy that constitutes an environment for business. The system includes legal, economic, political, social, cultural and technological systems that are in operation in any country. Thus, commerce is a system or an environment that affects the business prospects of an economy or a nation-state. It can also be defined as a component of business which includes all activities, functions and institutions involved in transferring goods from producers to consumers.

Rich Pellegrino
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January 16, 2014
A great day for transparency and for the citizens of Cobb...the old "Cobb Way" of back room deals benefiting only a few, that Olens and Lee and the Chamber have shepherded, is coming to an end and everyone is becoming the wiser. Thanks to the MDJ for helping to shed light on this....I wonder when they will also abandon the Braves "ra, ra bandwagon".
your group
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January 18, 2014
Your citizens group need to call for an investigation by the District Attorney's Office.
Taxmageddon
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January 16, 2014
Congratulations Cobb School Board! It looks like you won. You now get to keep 100% of the zero new school taxes the vacant site is likely to generate over the next several years. That will surely help to close the budget deficit. If you can succeed in keeping a 100% share of lots of other vacant sites that generate zero new taxes, the District will be running budget surplus in no time. It is TRULY scary that you folks are in charge of a near billion $ enterprise.
Tony Cain
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January 16, 2014
If Williams and Leithead thought they could win in court, they would have gone to court. They didn't go to court because they kow "developers" have been breaking the law and getting away with it.

A court ruling against Williams would also put in question, if not jeopardy, every so-called development scheme using the same taxpayer financing in Ga.

This has been a good day for taxpayers, a bad day for crooks who want to use OUR MONEY!

HotinAtlanta
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January 16, 2014
Hooray. Finally someone put their foot down on the Cobb County Commissioners. This whole thing (including the Braves deal) is suspicious and stinks of payoffs. If Cobb County continues to give these business tax breaks, we residents will have to continue to pay higher taxes to make up the difference. Let the rich pay those taxes.
Just Wait
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January 16, 2014
Finally, the school board does something right. While your at it, why don't you inquire about the Development Authorities private jet?
Lib in Cobb
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January 16, 2014
Every Republican in Cobb county has referred to our president as a "socialist". Would someone please explain how this Braves/Riverwalk deal is not socialism? If the county can find $300 million for baseball, then let them find the funding for our schools and those who work so hard to educate the children.

Let the Braves and John Williams go elsewhere.
anonymous
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January 16, 2014
They all use to be Democrats now they are RINO’s they are Fascist Republicans they conspire with big business against tax payers. Sam was the head of the Democratic Party in Cobb.
Guido Sarducci
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January 16, 2014
Lib, I am in general agreement with your sentiments, except how you try to relate this fiasco to "socialism".

However, before the lunch mob gets ot yu, let me point out that school boards funds and county funds do nt come out of the same pot. Timmy finds money for the county, not the school board.
COBB CSI
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January 16, 2014
How can Sam Olens not recuse himself when use to be in on all this illegal tax nullification and was the ARC president? The Cobb government has been doing illegal things for years with social media more than 50 to 75 concerned citizens are finding out and seeing how much money is being stolen. The Braves are already making sure they don’t pay taxes at the new stadium, and Timmy Lee had a private round table with all commissioners attending but only two at a time. Any commissioner that attended that meeting sold out the public and should be removed from office.
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