Tenant-luring incentives turn out to be mixed bag

Amid rising commercial vacancies, enticements see success — sometimes

When Everest College Atlanta West dedicated a new location near Greenbriar Mall last month, the focus was on the school’s medical services training programs.

But the moment also marked an economic development success: the for-profit college opened in a renovated Cub Foods store, lured in part by a more than $600,000 grant toward renovation costs.

Amid the metro area’s rising commercial vacancy rate, economic development officials are offering such incentives to put businesses in the empty spaces.

The results have been mixed, they acknowledge.

The Atlanta Development Authority, through its Campbellton Road Tax Allocation District program, gave Everest the grant to help with the $5.5 million renovation of the grocery store.

Leaders reasoned the school will generate $5.4 million in income from jobs and $13 million from economic output. The ADA gets its funding from the city’s general fund, property it owns, grants and admini- strative fees from programming.

Across the metro area at Gwinnett Village industrial park, occupancy has increased from 60 percent to 90 percent because the area was designated a state Opportunity Zone, said Chuck Warbington, executive director of the Gwinnett Village Community Improvement District. The zones offer job tax credits of up to $3,500 per job created.

“If you don’t have that Opportunity Zone, they don’t even consider you,” War- bington said of potential tenants.

But Cobb County’s 3-year-old Commercial & Industrial Property Rehabilitation Incentive Program, which offers tax abatements on the total spent on improvements, has not had any takers, said Michael Hughes, director of Cobb’s economic development office.

Designed to encourage rehabilitation of structures 20 years and older, it targeted buildings worth millions in three Cobb corridors — Atlanta Road, Canton Road and Veterans Memorial Highway.

“By the time we put this in place, the market went into decline,” Hughes said.

Roger Tutterow, an economist at Mercer University, said incentives can work, but he cautioned that economic development leaders must make sure the benefits exceed the costs. He said incentives must bring jobs and sales taxes or they end up being giveaways to companies.

“What you want to attract are high compensation jobs that spend that money in the community,” he said.