The Development Authority of Cobb County changed its fee structure for projects over $1 billion to further incentivize larger developments, starting with the recent $1.6 billion Lockheed Martin project.
As part of the agreement approved recently, Lockheed Martin will receive up to $77 million in tax incentives through 2048 as the company receives federal defense contracts over the next several years. In addition, Lockheed Martin will now save up to $750,000 on fees.
Instead of paying fees up to $2 million under the original deal, the company will pay up to $1.27 million.
The authority calculates its fees through a set percentage structure based on the total project investment companies put forth. Fees go toward the development authority’s operating costs.
Lockheed Martin’s potential billion-dollar expansion is the largest deal the authority has ever negotiated. The company’s officials inquired about any possible adjustments to the fees, which prompted Clark Hungerford to consider a fee cap.
Nelson Geter, the authority’s director, said the company asked for “far less than what we’re offering.”
Several of the authority’s board members said they believe the fee adjustment on larger projects will make the authority stand out and incentivize development in the county.
“We have been presented an opportunity that we have not been presented in the history of the development authority,” Hungerford said to the other board members. “I think doing that gives us an advantage.”
While the members generally agreed with capping fees for future projects over $1 billion, J.C. Bradbury and Jamala McFadden sided against applying the additional discount to the Lockheed Martin deal in a 5-2 vote.
“It raises the prospect that we’re open for negotiation,” said Bradbury, a Kennesaw State University economist. “Because they did ask for this. I mean, that’s where this came from.”
About the Author
