Fulton board under scrutiny tightens spigot on incentives

Some legislators want to curb develop authority’s operations

Credit: Jamestown

Credit: Jamestown

The Development Authority of Fulton County for many years seldom heard a proposal for a tax break it didn’t like.

But a financial scandal and public scrutiny of the agency’s incentive deals coupled with an overhaul of the authority’s board appears to have brought a sea change. In recent months, an agency known for its deference to developers and big businesses is starting to push back.

From January 2018 to this past May, the DAFC board heard 86 proposed tax breaks and turned down just one, an Atlanta Journal-Constitution analysis shows.

But since June, following a series of investigative reports by AJC and Channel 2 Action News, DAFC approved just one tax break, for a distribution center in Union City. The authority in that time rejected one proposed tax break for a project near the Beltline and pumped the brakes on two others.

Earlier this month, the developer of Ponce City Market temporarily withdrew a proposal for an $8 million property tax break for the popular Beltline attraction that apparently did not have the support needed to pass. Jamestown Properties said it would take public and board feedback for its second phase and return with a new proposal.

The board also tabled consideration of a $3.7 million incentive for a second Beltline project on the site of an unpermitted landfill after board members appeared to be deadlocked on the matter.

In August, the board rejected a requested $4.4 million tax break for another Beltline-area project — an apartment project at Piedmont Avenue and Piedmont Circle — even though it had given the same developer preliminary approval just a few months earlier.

That decision came after an AJC investigation found DAFC provided preliminary or final approval for more than $328 million in tax breaks since 2018. Most went to projects in favorable markets such as Midtown or on the Beltline.

Several members of Atlanta’s legislative delegation have called for reforms to DAFC, with at least one calling for its dissolution. Legislation to curb DAFC’s operations could come next year.

Anna Foote, a former board member of Invest Atlanta and a critic of DAFC, said the changes come as board is under “extraordinary scrutiny.” The last six months exposed that DAFC didn’t have policies and other guard rails in place to prevent abuse of its finances, Foote said. In recent months, the authority has instituted new rules related to board compensation and governance.

But while DAFC might be tightening now, the agency must fund its operations and staff, Foote said, which could put pressure on the organization. DAFC earns the bulk of its operating revenue from fees it charges developers as part of the tax break deals.

“Just because you’ve started down that path doesn’t mean you stay there,” she said.

New controls, new focus

Among the findings of the AJC and Channel 2 investigation was that former Chairman Bob Shaw and former board officers Samuel Jolley Jr. and Walter Metze were paid lavish per diems or stipends, sometimes multiple times per day. The Fulton County Board of Commissioners later could find no evidence per diems were ever authorized.

Shaw, who was up for reappointment, was also later revealed to have had a secret job at DAFC while serving as chairman. Shaw withdrew from consideration following the reports.

In recent months, the board, under new chairman Michel “Marty” Turpeau IV, enacted further ethics and financial controls.

Credit: Eric Fan

Credit: Eric Fan

What’s more, so far this year the Board of Commissioners has appointed five new members to the nine-member board. A change in the authority’s bylaws granted one representative each from Atlanta Public Schools and Fulton County Schools. That helped address criticism that while school systems fund an outsize portion of tax incentives to businesses, they had little say in authority decisions.

DAFC also has taken steps to improve transparency. In the coming months, the board is expected to create a more formal structure for evaluating projects. Sarah-Elizabeth Langford, the authority’s new interim executive director, has been tasked with developing new incentive tools to help smaller businesses and poor areas.

Turpeau said DAFC is “moving toward a more intentional focus on affordability, community benefits, (minority- and female-owned businesses) and quality development for underserved areas of our county,” while recognizing the authority serves the whole of Fulton.

“Our board is comprised of knowledgeable community leaders who each bring their unique experience and perspective about economic development and how to use incentives to benefit Fulton County,” Turpeau said in an email.

Still, DAFC faced backlash earlier this month after the AJC published a story about proposed incentives to Jamestown for the second phase of Ponce City Market.

“Fulton development authority, fresh off a scandal, not making a great case for its own existence,” state Rep. Josh McLaurin, D-Sandy Springs, said in a quote-tweet linking to the AJC story. “Dissolve it.”

Jamestown withdrew the request prior to the Nov. 16 meeting.