The state of Georgia grants thousands of dollars in tax credits for each job created within designated "opportunity zones" -- areas with high unemployment, vacancies or other signs of economic distress.
Lately, Atlanta and a number of job-hungry neighbors -- including Smyrna, Alpharetta and Marietta -- have succeeded in getting parts of their cities named as such zones, or are trying to win state approval.
Atlanta this month announced that four more opportunity zones have been approved within city limits: one stretch near North Avenue and three industrial areas near the city's western boundary.
The state agency that designates the zones has gotten dozens of applications in the last three years. The city of Atlanta alone accounts for 33, nine of them approved, a spokesman said. Zones have become much more popular among local politicians hoping for improvements in stubbornly high unemployment rates.
Only a few companies in Georgia claimed opportunity zone tax credits in 2010, the last year for which numbers are available. That year, 26 jobs were covered by the program. Companies in Cobb County reported six new jobs and claimed $21,000 in tax credits for an average of $3,500 per employee. In Hall County, five jobs and about $13,400 in tax credits were claimed.
Authorities cautioned that those numbers may be revised as amended returns are filed.
There is still debate about whether the incentives are justified by the number of jobs created.
"If you were planning on creating a job anyway, you're going to get money for no reason," said Robert G. Lynch, who has studied the issue and teaches economics at Washington College in Maryland. "Could (the state) have spent that money on roads and bridges or investments in the schools, or parks?"
In Georgia, new or existing businesses in an opportunity zone are eligible for a yearly income tax credit of $3,500 for each new job created as long as they create at least two. The annual credits are good for up to five years. Zones run for a decade and can be renewed once they expire.
The designation is reserved for areas where at least 15 percent of residents live below the poverty line. Census tracts next to such areas also are eligible.
"'Fully depreciated areas' would be the nice way to say it," said Brian Williamson, assistant commissioner with Georgia's Department of Community Affairs. "'Blighted' would be the direct way."
Last fall, opportunity zones were approved downtown, in Midtown and at Fort McPherson, a former Army post the city hopes will be redeveloped.
City leaders point to recent successes, including an announcement that Panasonic will establish an automotive innovation center in the Midtown zone. One of the biggest mixed-use construction projects in Atlanta -- City Hall East, also known as Ponce City Market -- is in another zone.
"Companies are constantly looking to find the best place they can go to get the lowest overhead," said Brian McGowan, president of Invest Atlanta, the city's development authority. "Even a slight advantage over other places is a competitive edge."
Smyrna has had an opportunity zone along South Cobb Drive and Windy Hill Road -- covering areas with higher-than-average vacancy rates -- since late 2011, said Andrea Hall, the city's economic development manager. A Kroger grocery store and gun shop called Adventure Outdoors have already expanded within those areas. More inquiries are coming in from brokers representing retailers, she said.
"The word has really been out on the street on this for the last five months," Hall said. "We're very fortunate to be able to offer this. It's very early in the process, but it will have an impact further down the road."
Last week, Alpharetta applied for a new zone covering commercial property along the Ga. 400 corridor, said James Drinkard, assistant city administrator. The tax breaks could be a tool to help to revitalize Alpharetta's downtown, he said.
The financial incentives are attractive "not only to the traditional mom-and-pop type business that people think about, but also technology start-ups," he said.
Veterans of corporate negotiations and expansions say tax incentives are not a sure-fire way to either keep companies in town or attract them to set down roots.
"Incentives don't make a bad deal good," said Betty McIntosh, managing director at Cushman & Wakefield, who has worked on deals with clients including DaimlerChrysler, Hyundai and gunmaker Remington. "They make a good deal better."
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