Officials oppose major tax break for Sembler project

Opposition to a proposed tax break for a major development in north DeKalb County is growing, with officials from local and state government leading the charge.

A school board member asked his peers Monday night to oppose the deal requested by Sembler Co. while a state legislator held a rally across town to organize opposition to a substantial tax break for the developer. And Jeff Rader said he is planning to ask his colleagues on the County Commission to oppose the tax break at their meeting Tuesday.

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KENT D. JOHNSON / kdjohnson@ajc.com

In a standing room only meeting with about 200 attending, Jeff Fuqua with Sembler talks before the meeting Monday evening. State Rep. Mike Jacobs has called a Town Hall meeting Monday night in DeKalb to rally protests against the newest tax break for the Sembler multiuse project.

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KENT D. JOHNSON / kdjohnson@ajc.com

Florida-based Sembler Co. has asked for what observers say is an unprecedented subsidy in the county: a 100 percent property tax abatement for 20 years. The tax break, worth an estimated $52 million, would waive all property taxes on the undeveloped half of the company’s 54-acre mixed use project near the Brookhaven MARTA station.

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KENT D. JOHNSON / kdjohnson@ajc.com

Sembler President Jeff Fuqua said taxpayers wouldn’t be forfeiting anything since the parcel he wants to develop is unimproved and producing little tax revenue now.

Florida-based Sembler Co., pointing to the chance to produce more revenue in sales taxes, has asked for what observers say is an unprecedented subsidy in the county: a 100 percent property tax abatement for 20 years. The tax break, worth an estimated $52 million, would waive all property taxes on the undeveloped half of the company’s 54-acre mixed-use project near the Brookhaven MARTA station. A couple of residential towers are up, but the company says it can’t finish the mixed-use shopping village as planned without help from taxpayers.

The money would come from the budgets of the county government and school system though neither apparently has a say. The DeKalb Development Authority could vote on it June 18, and the quasi-governmental agency’s attorney, Greg Worthy, has said its seven-member board has the sole discretion over whether to grant it.

If the authority approves the abatement, the agency would take possession of the property, then lease it back to Sembler, say officials familiar with the deal. The agency can’t be taxed, so the parcel would be tax-free until the lease expired.

Neither the school system nor the county, which are being squeezed by declining tax revenue, should have to subsidize the project, said Paul Womack, a school board member.

Womack introduced a resolution against the tax break Monday night, saying, “I made the motion at the request of the people in my community. Sembler will be taking dollars out of the classroom.”

Board members, however, did not act on his request. Instead, they decided to ask the development authority for more information. They also asked that authority members consider the impact of any deal on the school system.

School board member Eugene Walker, who is chairman of the Development Authority, supported the board request for more information, but it was not clear whether he would request a delay by the authority to give the school board more time.

At Rep. Mike Jacobs’ town hall meeting Monday night, which drew more than 200 people, many people applauded when speakers stated objections to the Sembler project.

Jacobs (R-Atlanta) said the abatement would “place upward pressure on everybody else’s property taxes” because others would have to pick up the slack in paying for services.

Sembler contends that DeKalb taxpayers would be making an investment if they cut the company a break. Company President Jeff Fuqua says the parcel is unimproved and producing little tax revenue now.

Fuqua described the area around the project site as “blighted,” which elicited laughter from the crowd, who disagreed.

Sembler estimates that even with the tax break, its project could produce $160 million more than the $22 million it would cost for the government and the school system to service the future tenants.

Much of that would come from sales taxes. Critics such as Rader say the development would shift sales tax money from elsewhere in the county.

The resolution Rader plans to introduce Tuesday asks the County Commission to both oppose the tax abatement and to “challenge” it, if necessary.