Calls mount to bar Fulton board from giving tax breaks in Atlanta

The letter Invest Atlanta’s CEO sent to the head of Fulton County’s development authority was polite: It used phrases like “respectfully request” and “there may have been.”

But its message was clear: Keep out.

Invest Atlanta, the city development authority that offers tax abatements and other incentives to lure construction inside the city limits, is sick of Fulton County offering incentives to developers there, too. It wants to be the only game in town.

Al Nash, the CEO of the county development authority, shot down the request in his own letter back. But since then, calls for his agency to step aside have only grown.

“@InvestAtlanta should be the sole development authority for the City of Atlanta,” Atlanta school board chairman Jason Esteves wrote on Twitter a month after the Invest Atlanta letter was sent. Sen. Jen Jordan, D-Atlanta, echoed Invest Atlanta’s request when she said there should only be one development authority giving tax breaks in Atlanta.

“Once you have Invest Atlanta taking up the geographic space, the need for the Fulton County development authority, with respect to that area, sort of goes away,” Jordan said. She’s researched what it might take to kick the county out of the city jurisdiction that they share.

The concerns of all three — Jordan, Esteves and Atlanta Public Schools, and Invest Atlanta — are rooted in questions about standards and oversight for incentives handed out by the county development authority, Select Fulton. A spokesperson for Invest Atlanta declined a request for comment, but the Invest Atlanta letter also cited the fact that the county's focus isn't on affordable housing and that Select Fulton doesn't have appointed representatives from APS or other boards whose tax dollars are affected. Eloisa Klementich, Invest Atlanta's president and CEO, said in the June 28 letter that she thinks "it is essential to be at the table for the conversation and the future development in the City." Invest Atlanta "has a unique insight" into the city's needs, she wrote.

But Nash rejected those arguments, saying Select Fulton is doing its job — and doing a good job — when it gives incentives for developers to build office buildings or apartment complexes in the city limits.

In his July 22 letter, he called Klementich’s request “troubling for many reasons,” and said her assertion that Select Fulton operated without restraint in Atlanta was “reckless and irresponsible.” Select Fulton’s mission is to promote projects that will have a significant impact on the county’s economic health and competitiveness, he said, including in Atlanta.

Instead of asking his agency to stop offering deals in Atlanta, he wrote, “perhaps you can suggest ways in which we can solidify and strengthen our partnership to ensure economic development continues within the City of Atlanta and Fulton County.”

“I really believe a lot of good things are happening,” Nash said. “We’ve left the door open to have conversations.”

The tension between Atlanta's school system and the Fulton development authority has mounted as APS has gotten a better understanding in recent years of how development incentives impact the school district's tax revenues.

The district reported that for fiscal years 2017 and 2018, its revenues were reduced by $15.2 million because of incentives given out by the county and by $10.48 million because of the city development authority's actions.

It’s money APS says it could spend to strengthen programs and provide tax relief to homeowners. School taxes make up the biggest share of property taxes, and APS officials said they’d be better positioned to reduce the tax rate if there weren’t so many development incentives.

“When you add all of that together, it’s a significant number and we don’t have any control over (it),” said APS Superintendent Meria Carstarphen.

But Fulton leaders paint a sunnier picture, saying the incentives they hand out actually increase the tax base, and therefore the money APS is collecting. The county forgoes half of all property taxes on a project in the first year, then decreases those abatements in subsequent years until a project is fully on the tax rolls. Proponents say those projects would not happen without incentives. And in 2018, APS got $19.1 million more in taxes than would have been collected if no incentives had been offered, an Ernst & Young representative told Fulton County commissioners at a meeting Wednesday. The county’s take was $13.6 million.

Still, APS leaders said they have less input and oversight when incentives are approved by the county. While school board member Michelle Olympiadis is appointed to the Invest Atlanta board, APS does not have a representative on the county development authority.

Carstarphen served for a few months on the county board earlier this year, but her partial term has since expired.

Lee Morris, the Fulton representative to the Invest Atlanta board, said the two boards seemed “duplicative.” But he said he is torn about whether the county should just step away from Atlanta.

In response to school leaders’ concerns, the county agreed to put a representative from both the Atlanta and Fulton school systems on the nine-member board — but not until 2021.

During her short time on the county board, Carstarphen said, the district’s position was “voted down every time.”

APS officials believe it’s easier for developers to win support from the county than the city.

Morris said he’s heard that, too. But at the city level, he said, what makes some deals challenging are the benefit agreements or housing guarantees that a strong mayor insists on. Robb Pitts, the Fulton County commission chairman, said he had heard that people came to Fulton County because it is “so difficult to do business with Invest Atlanta.” Developers cannot get incentives from both boards for the same project.

“Word on the street is that we would approve everything,” he said.

Nash rebutted that, too, saying the county's standard is development that will bring in at least five times the amount in taxes that is already being collected.

APS officials said they don't oppose the idea of using some school property tax dollars to spur development, but both the county and city agencies need rigorous standards.

Tax breaks should go to developments that wouldn’t be built unless the developer receives help, Carstarphen said. And the priority should go to projects in “neglected” city neighborhoods that need the investment and “hope” that such developments offer, APS said in a statement.

Carstarphen said there have been too many tax breaks handed out to projects in thriving areas like Midtown and Buckhead.

“We want to try to shift some of the resources to the very families who make up a majority of Atlanta Public Schools, the communities where they live. Get them a grocery store, help them with housing, get some job development,” she said.

It would take an act of the Fulton County Commission or the Georgia General Assembly to change the county authority’s jurisdiction, according to APS. Jordan said she thinks the county can do it on its own, something Pitts directed the county attorney to research.

“The Fulton County development authority is needed, and it’s needed outside the city of Atlanta,” Jordan said. “I have heard of developers who have pitted the two authorities against each other. It’s ridiculous.”

For Vincent Fort, a community activist and former state senator, neither development authority has a really compelling argument. Both, he said, could be doing better. But he said Invest Atlanta’s position is “just laughable” if that organization thinks it’s doing enough to create affordable housing or make other neighborhood improvements.

“From what I can gather, it seems as if Invest Atlanta is being concerned about turf as opposed to how these deals are impacting the community,” he said. “I’m not a big fan of either.”

Why it matters

The City of Atlanta and Fulton County both have development authorities that award tax breaks to projects built within the city limits. Atlanta Public Schools leaders say those incentives reduce the district’s tax revenue by millions each year, and school officials have joined others in saying there should only be one agency giving tax incentives in Atlanta. Invest Atlanta, the city’s development authority, is among those calling for the county development authority to step back.