WANT TO GO?
What: Cobb County School Board meeting
Where: 514 Glover St., Marietta
When: Meeting starts at 7 p.m.
Special presentation: Home Depot has been invited to present its proposal to the school board at 6:30 p.m.
ONLINE: Visit ajc.com tonight for out vote results
Home Depot is asking the Development Authority of Cobb County for blanket approval of property tax breaks on $200 million in investments the big box giant plans to make over the next 10 years.
Requesting prospective tax breaks — each of which will last 10 years, and not begin until the investment is made — has never happened before in Cobb County.
Home Depot officials have told the development authority that the company will invest $200 million over the next decade at its corporate headquarters, and in a new Internet Technology center planned in the city of Marietta.
But rather than seeking the tax breaks as each investment is made, the company wants approval for all 10 abatements at the development authority’s March meeting.
Property tax abatements cost school systems and municipal governments revenue in the short term. The argument for them is that those governments then receive higher tax receipts from the improved property as the abatements expire.
In Cobb, the tax breaks work on a sliding scale: 100 percent of the investment is abated in the first year, 90 percent in the second year, 80 percent in the third year, and so on until the abatement runs its course.
Clark Hungerford, chairman of the development authority, said approving all the tax breaks at one time is “probably a smart thing to do.”
“From an economic standpoint, why not go ahead and get it all teed up with the idea being you’ve already done the paperwork, now just go do it?” Hungerford said. “I guess the alternative is every year for the next 10 years they could come back and recreate the wheel and make a new application … and that becomes a financial burden for the company.
“Do we penalize them and make them come back every year, or do we work with a good corporate citizen and work for something that’s beneficial for all parties involved?”
The company’s first-year investment would refinance $23 million in debt, which received a 10-year property tax abatement when it was issued in 2007, said J. Nelson Geter, the development authority’s executive director.
Jim McCarthy, Home Depot’s senior real estate director, could not be reached for comment.
Granting a new 10-year abatement every year for the next decade will mean 20 years of reduced taxes for the company, said development authority board member Karen Hallacy, who said she does not support the deal.
“There’s so many open-ended discussions going on here and so many details that haven’t been ironed out,” Hallacy said. “I respect that Home Depot is a very important company in Cobb County, and they’ve been a good corporate neighbor. But I still say that each project should come to us individually and be sold on its own merits.”
Hallacy applauded the company’s plan to build a new Internet Technology center on Newmarket Parkway, near the intersection of Franklin Road in Marietta. She said that investment could spark more economic development in the depressed area.
But Hallacy said she is particularly concerned about tax breaks on the company’s investment in technology.
“Technology will depreciate (rapidly), so by the time they’re paying taxes on it, it will be at a (much lower) value,” Hallacy said. “I just don’t like this idea of an open-ended wallet they’re creating.”
Home Depot officials have been invited to make a presentation to the Cobb County School Board at its meeting Thursday. The school board last year objected to tax abatements being offered to developer John Williams’ $103 million mixed-use development — a deal that ultimately fell apart because the school board would not drop its threat of a legal challenge.
Randy Scamihorn, chairman of the school board, said he's not sure how his board will feel about the Home Depot proposal.
“If our taxpayers are allowed to hear what’s going on, we can all make a good judgment together,” Scamihorn said.
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