Council surprised by last minute request for millions for biz incentives

The amendment came with little explanation and took many councilmembers by surprise. Only after the measure was approved by a 10-5 vote late Monday did the purpose became clear: The new funds would make good on commitments that Reed and Invest Atlanta have already made to corporations relocating here, helping to cover costs like relocation and recruitment fees.

Some councilmembers questioned the timing of the proposal, which came after the city had settled on modest salary increases for most employees. Others called for new controls that would prevent the city from promising perks without the funding to back it up.

“How can you go out and tell someone you’ll give them a million dollars and you haven’t consulted anybody?” said Councilwoman Felicia Moore.

“We got no answers, no information and don’t know who is going to get the money,” she continued. “And the craziest part to me is elected officials who are charged as the checks and balances of this city have zero oversight. Zero.”

Duriya Farooqui, the city’s chief operating officer, said Tuesday the legislation wasn’t introduced to the council during budget hearings because the final terms of the incentives were still being negotiated.

“We wanted to get a better sense of what the appropriate amount would need to be,” she said. “We wanted to respect the confidentiality of private companies making sensitive decisions before informing their employees.”

Invest Atlanta, which is governed by a nine-member board and chaired by Reed, often uses incentives and perks to recruit new firms or encourage existing ones to expand. Sometimes the money comes from the 10 special property tax districts it oversees, but in other cases, money from Atlanta’s general fund is required.

The extra $2.3 million the organization received on Monday is earmarked solely for business incentives, Farooqui said. She added the size of the last-minute request is a reflection of Atlanta’s success in recruiting new businesses within city limits.

“We have reaped huge returns on that effort in terms of the number of jobs coming to the city,” she said. “Frankly the size of the amendment that we asked for is a testament to that. Because if we did not have those leads and success stories in relocating jobs, we would be asking for a much smaller amount.”

Of the last-minute cash infusion, some $1.6 million would go to PulteGroup, the construction giant that is moving its headquarters from suburban Detroit to Atlanta. The rest of the funds would help repay commitments made to Porsche, which is building a new North American headquarters by the airport, and ExactTarget, a digital marketing firm expanding its operations in Buckhead.

Incentives have long been criticized as corporate handouts to lucrative firms that don’t need the money. But city and state officials argue that using tax breaks and other types of incentives are a cost of doing business in a competitive environment. They say the public funds help win over reluctant executives who have put Georgia on their short list.

Invest Atlanta President Brian McGowan said the incentives are crucial. Otherwise, he said, “We’re not going to get these companies to bring jobs to Atlanta.”

Even some supporters, though, were wary of the city’s tactics in funding those efforts. Councilwoman Joyce Sheperd, who sits on the Invest Atlanta board, criticized the last-minute request and called for the city to develop a way to plan for this type of spending.

“We have made commitments, but we had to figure out how to rob Paul to pay Peter,” she said Tuesday. “This can’t happen again the way it happened (Monday) night. We have to create a mechanism to have upfront funding.”

Watson, meanwhile, appears to have been rewarded for championing the last-minute cash infusion. Calls to his office weren’t returned Tuesday, but the mayor sent an email to supporters commending his service to the city and requesting donations for his re-election campaign.