Multinational pizza chain Papa John’s will get $13 million in taxable revenue bonds that will finance the improvement of the company’s soon-to-be office at The Battery Atlanta.
The Development Authority of Cobb County approved the bonds in a 4-2 vote Tuesday morning, with members J.C. Bradbury and Karen Hallacy opposed. The Development Authority is a seven-member body; Kevin Nicholas did not attend Tuesday’s meeting.
Papa John’s announced in September it would open a second headquarters in metro Atlanta. In November, after the Development Authority signaled its willingness to consider the bonds, the Louisville-based company announced it had chosen Three Ballpark Center at 788 Circle 75 Parkway as the location of the new headquarters.
The company’s new office will occupy two floors totaling 60,000 square feet. The bonds will be used to purchase furniture, fixtures and equipment and “customize (the office) to their particular needs,” said Nelson Geter, the authority’s executive director.
Bradbury, a professor of economics at Kennesaw State University, asked Papa John’s representatives at Tuesday’s meeting whether they would pull out of Cobb if the authority were to reject the request for revenue bonds.
Representatives for Papa John’s did not answer the question directly, but said the incentives were a factor in the company’s decision to come to Cobb.
Development authority members also defended the incentives Tuesday.
Chair Clark Hungerford noted the company had announced its intention to come to Cobb after the board signaled its willingness to consider the bonds in November.
“For us not to approve (the bonds) I don’t think would be in good faith,” Hungerford said.
Vice Chair Donna Rowe agreed.
“I believe in trickle-down economics, and it is going to bring other companies here … being able to say we have Home Depot, we have Papa John’s, we have so-and-so forth,” she said. “And also the jobs they’re going to do and houses they’re going to buy and tires they’re going to buy and burgers they’re going to buy — it’s just good for the Battery area, it’s good for Cobb County.”
In November, John Warden, of Colliers International, told the Development Authority the move would bring at least 160 jobs to the county at an average salary of $120,000. Colliers helped Papa John’s find potential locations for its new headquarters.
Of those 160-plus jobs, about 70 are expected to be local hires, with the remainder relocating from the company’s current headquarters in Louisville, Kentucky, Warden said.
The bonds approved Tuesday will help the company finance improvements to its new Cobb location.
County businesses pay taxes on the land and buildings they own as well as the equipment and furniture inside those buildings.
The bonds allow Papa John’s to save on both types of tax by transferring the title of the building to the Development Authority, which is independent from Cobb and not subject to its property taxes, according to Geter.
Such a move would not impact taxes the county already collects on the property. Rather, it would waive the additional tax the company would owe after renovations boost the property’s valuation. That additional tax would be phased in over a period of 10 years.
It is not the first set of incentives Papa John’s has been given for its relocation.
In November, county commissioners approved an incentive package valued at $71,000 for the relocation. Those incentives come in the form of waived permit and business license fees.
Permit fees, at $6.25 per $1,000 of construction value, would otherwise cost Papa John’s more than $28,469. Under the agreement it reached with the county, it will only have to pay $5,000.
Business license fees are determined by a business’ classification and the revenue they generate. Based on information Papa John’s provided, the county estimated those fees would generate $50,907 over three years.
According to the terms of the agreement, the county will cap that business fee for three years at $1,000, saving Papa John’s more than $47,000.