The move by Rep. Matt Dollar (R-east Cobb) comes following a controversial tax abatement offered to a wealthy real-estate developer through a local Cobb development authority.
Dollar introduced the Development Authority Transparency and Accountability Act on Wednesday with bipartisan support from members of the Cobb County local delegation.
Dollar is being challenged for his House seat in this year’s Republican primary race by Karen Hallacy, who sits on the board of the Development Authority of Cobb County.
The bill, House Bill 921, would require development authorities to provide quarterly reports, giving counties, municipalities and local school boards a way to stay informed on upcoming development projects that might get offered special tax deals.
It’s in reaction to a storm of controversy surrounding the Development Authority of Cobb offering a 10-year tax abatement to a project backed by mega-developer John Williams and put forth by his local agent, Tad Leithead.
Though the $103 million mixed-use Riverwalk project failed to meet the county’s criteria of creating 25 jobs and contributing at least $500,000 to the tax digest, the Development Authority still offered the hefty tax break, which would have saved the developer $3.5 million.
But that offer caused outrage among the Cobb school district, which mounted a legal challenge to the bond issue underpinning the deal. Other owners of existing income-producing property reportedly called county officials and requested they, too, be offered the same tax break offered to Williams’ group.
Riverwalk was proposed to contain about 250 luxury apartments and a 10-story office tower.
Cobb Board of Education’s legal challenge claimed the tax abatement undermined the board’s ability to levy taxes and would take away needed revenue from the school district facing a $78 million budget shortfall.
Ultimately, Leithead withdrew his application for incentives and the future of the development is now unclear.
Dollar: Accountability needed
Dollar said on Tuesday in an email the legislation is a reaction to the heated debate that took place in Cobb over who should get incentives and who should get to dole them out. The Development Authority of Cobb is appointed by the Cobb Board of Commissioners but is still able to act independently and is not required to follow commissioners’ recommendations.
“The necessity of this legislation is a direct result of the recent debacle that revealed that there are serious problems with the current system,” Dollar said. “The taxpayers need more accountability from the appointed boards and the economic development community needs to know Cobb’s word can be trusted.”
Dollar also introduced a resolution to create the Development Authority Study Committee, allowing state representatives to study local development authorities and their relationship to other governing bodies and address concerns about accountability.
The committee will consider a state audit released in December that indicated development authorities need to have more clearly defined ethics policies and ensure transparency by better adhering to the Georgia Open Meetings Act.
“People in Cobb County were shocked, and rightfully so, that an unelected and completely unaccountable board could approve a sweetheart deal to a single developer, that the county’s own professional staff had recommended not go forward, thus giving away millions of dollars of the county and school system tax revenue,” Dollar said.
State Rep. David Wilkerson (D-Austell) is a co-signer of Dollar’s bill.
“Anytime another governmental entity is being impacted by a tax reduction or a reduction in their revenues, I think it’s important that they know,” Wilkerson said.
Challenger supports more transparency
Hallacy, Dollar’s challenger in the upcoming primary election, hasn’t seen the legislation, but said she is supportive of requiring additional accountability.
She offered to step down from her post, giving the commissioner who appointed her, Bob Ott of east Cobb, an opportunity to place a school representative on the board responsible for fostering economic development, often by handing out tax breaks.
Hallacy also presented a proposal for increasing communication between the development authority and the county school system, but no official action has been taken.
“I think imitation is the sincerest form of flattery,” Hallacy said, calling it “interesting that he’s proposing legislation now that I am on the Development Authority.”
Still, Hallacy said she’s all for ensuring accountability.
“I just hope that they have looked at what the school board had requested and obviously I have to just say that I’m looking forward to additional transparency and accountability and I hope that we can move forward on my proposal,” Hallacy said.