CUMBERLAND — A Fulton County beverage distributor is asking the Cobb County Development Authority to issue up to $65 million in bonds to help them build a distribution center in south Cobb.
Officials with Empire Distributors, a wholesale distributor of alcoholic beverages throughout the Southeast, project to have more than 500 employees at the facility, which would be built on about 70 acres on Hartman Road near Factory Shoals Road.
Many of those positions would be relocated out of Fulton, but as many as 90 or more would likely be new hires.
Authority members on Tuesday approved an inducement resolution for the bonds. The resolution indicates that the authority is willing to issue the taxable revenue bonds, but Empire would have to come back before the authority and have a final bond resolution approved.
“The availability of this present bond issue being requested, as well as other economic incentives, are fundamental — factors to their decision to relocate and invest in this new facility,” said Tim Ramsey, an attorney who represented Empire at Tuesday’s authority meeting.
The facility would become the headquarters of the company, which is a wholly-owned subsidiary of Texas-based McClane Company, a worldwide supply chain company. The facility would be about 600,000 square feet, including about 50,000 square feet of office space.
It would be built within the South Cobb Enterprise Zone, an area created by the county in 2013 to spark new business development, existing business expansion and new jobs through tax breaks.
In September, commissioners gave the green light to grant the development the enterprise zone’s tax incentives. The incentives are expected to total about $1.55 million, while the projected positive economic impact to the county has been estimated at $1.75 million during the incentive period.
Under the incentive program, no county ad valorem taxes will be owed for the first five years, while the following five years will see that ad valorem tax rate upped by 20 percent each year until the full tax rate is being paid in year 11.
When commissioners approved the request to rezone the land to make way for the distribution center, officials referred to the incoming development by a code name: “Project Steady.”
Empire aims to close on the land in late February, with construction expected to take about 18 months, Ramsey said.
In addition to its initial acquisition and construction budget of $65 million, Empire would maintain significant product inventory of about $35 million per year at the Cobb site, as well as a fleet of 70 trucks, Ramsey added.
Authority members Tuesday also approved an inducement resolution for up to $8 million in bonds for Cobb-based RaceTrac Petroleum to finance the acquisition and installation of furniture, fixtures and equipment to be used by the company in its new corporate headquarters to be located on Galleria Parkway in Cumberland.
Nelson Geter, the authority’s executive director, said the company will retain roughly 800 employees in Cobb through the relocation of its corporate headquarters from Cumberland Parkway near Cumberland Mall, with plans to add 90 employees over a five-year period.
RaceTrac officials who spoke at Tuesday’s meeting said the company has about 1,200 employees in Cobb.
A fiscal impact analysis conducted by Georgia Tech’s Enterprise Innovation Institute on RaceTrac’s expansion said it would have a net fiscal benefit to the county of more than $290,000 over the next 10 years.
Geter said both Empire and RaceTrac could come back to the authority at its Feb. 21 meeting with final bond resolutions to consider.
“The reason why the development authority was created ... was to create commerce through the issuance of bonds, thereby creating job opportunities for the citizens of the county. It’s not unusual for a company to use this mechanism for creating capital for a project,” Geter said, adding that a company going through the authority in most cases can obtain lower bond interest rates and more flexible terms than a bank may be able to offer, among other potential benefits.
In other business, authority members at a called meeting Thursday approved a resolution to issue up to $52 million in bonds to allow the Kennesaw State University Foundation to refund bonds issued in 2007 and 2008. They were used to finance construction of a parking facility, dining hall and classroom facility at KSU’s Kennesaw campus. The issuance essentially serves as a refinancing of the outstanding bonds, Geter said, and will allow the foundation to save about $8 million over the life of the bonds.
“Typically, institutions such as Kennesaw State will refund bonds because of lower interest rates — they’re able to get a better interest rate now than they did when the bonds were originally issued. What that means to them is pretty significant savings,” Geter said.
Authority members were to consider the KSU Foundation’s request at its meeting Tuesday but could not vote on the matter as Chairman Clark Hungerford serves as a foundation trustee and therefore recused himself, leaving the meeting with a lack of a quorum to vote on the issue.