Staff writer Katie Leslie contributed to this article.
A Fulton County government authority has positioned Turner Broadcasting for continued lucrative property tax breaks in hopes of retaining local jobs and corporate spending, even as the company prepares for significant job cuts.
As part of a deal this summer with Fulton’s development authority, Turner has stated that it expects to employ about 7,000 people locally in four years, according to authority documents.
That jobs total is actually more than the 6,500 employees Atlanta-based Turner currently has in the area. However, a Turner spokesperson maintains that the potential tax breaks and authority action are not related to the company’s number of employees.
Turner recently offered voluntary buyout offers to nearly 600 of its 9,000 U.S. employees, many of whom are in Atlanta. In addition to the buyouts, Turner has said it expects to cut jobs later this year. The reductions are part of a broader effort to refocus on its strongest options for financial growth, the company has said.
But as part of its latest agreement with the Fulton development authority, Turner could eventually qualify for what could be millions of dollars in tax breaks on up to $600 million in technology equipment and office furniture purchases that it may make over the next few years.
Neither the county authority nor Turner, which includes CNN, TNT, TBS, Cartoon Network and other TV and online properties, have publicly detailed what equipment will be purchased. Turner requires lots of technology infrastructure and sophisticated equipment for its TV and online operations.
Turner has won property tax breaks from Fulton County since 1998 as a result of a series of bonds issued by the development authority. In essence, Turner pays to buy equipment and other kinds of property, which the Fulton development authority takes ownership of and then leases back to Turner. The arrangement allows Turner to pay reduced property taxes on the equipment. It pays half the normal tax in the first year, then pays an increasing percentage of the property’s value of over the next nine years, eventually hitting full value.
The development authority has helped other companies win tax breaks, with the hope that it encourages businesses to expand, ultimately growing the tax base, boosting the local economy and encouraging hiring.
An analysis by Invest Atlanta, the city’s economic development arm, shows potential tax savings for Turner for the latest bond issue could be worth about $29 million over time.
Robert Shaw, the development authority’s chairman, said Turner has been a great benefit to the county and he hopes it continues to be.
"We would expect them to do what they said they would do when they came forward and asked for this incentive," Shaw said. "We delivered and now we expect them to deliver."
According to its agreement with the development authority, Turner represents that acquiring the equipment and projecting that it “will retain 7,000 employees in Fulton” by the end of 2018 constitute “good faith, reasonable expectations.”
But in response to questions from The Atlanta Journal Constitution, Turner issued a statement saying that the bond transaction “is not connected to the number of employees. Instead, it is an incentive for Turner to maintain its facilities at its midtown Techwood campus and its downtown CNN Center location.”
The company later added that “Turner’s participation in the tax savings initiative reflects the company’s intent to maintain a significant presence in Fulton County as a vital location for television production and related staffing.”
Shaw of the development authority said the latest discussions with Turner began long before recent news stories about pending job cuts.
“That hadn’t come up and been raised to us,” he said. “I’m not in on what they plan to do.”
He said that while the authority recommends the tax breaks, the county’s board of tax assessors determines if the breaks are legitimate and is responsible for verifying that the company meets its commitments.
In late May, the potential bond for Turner was brought up in a development authority meeting. A few days later, in early June, Turner chief executive John Martin sent a memo to employees discussing an initiative to refocus operations, including likely making staffing changes. In late July, the authority unanimously voted in favor of the bond issue for Turner, and on August 12 it filed paperwork about it with the courts. A week later, Turner’s chief sent out another memo to employees, in which he wrote that Turner would start 2015 as “a more streamlined, nimble and efficient company.” The following week, the company announced voluntary buyout offers for nearly 600 older U.S. employees and predicted layoffs later this year.
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