Tyler Perry might be the one who owns the luxury Embraer jet, but some in Cobb County say it’s taxpayers being taken for a ride.
The county’s development authority on Monday unanimously approved a nearly $2 million tax break for the plane, owned by one of Perry’s companies. Under the agreement — which was given the code name Project Meatloaf — Perry’s firm will register and base the Embraer executive plane in Cobb.
In return, Cobb officials say, parking the plane at McCollum Field will create 10 high-paying jobs tied to the aircraft and add to the county’s tax digest.
Development authorities are tasked with choosing projects that spur commerce and create jobs in the county. The tax breaks Cobb is providing for Perry’s company are often used to woo factories, corporate headquarters and entice developers to build office towers and apartments, though some critics contend local authorities are often fast and loose in granting incentives for companies that would likely invest without the perks.
“We are convinced this would be an excellent project for Cobb, increase our tax base and provide high-paying jobs,” Nelson Geter, the Cobb development authority executive director, said of the deal for Perry’s plane.
The measure, which also involves bond financing, will move on to the county tax assessor’s office to get an OK on the abatement schedule and then a superior court judge for approval of bonds.
Perry, the playwright turned movie mogul, moved to Atlanta in the early 1990s, and has become Georgia's best known filmmaker. He's scored numerous movie and television hits, including his Madea series, and has a reported net worth of $600 million.
A fiscal impact analysis conducted by Georgia Tech estimates that Perry's company would receive $1.83 million in tax breaks.
Over 10 years, officials say, schools would end up receiving $733,000 in new property taxes off Perry's plane, while the county government would receive $400,000, despite the incentives.
But the potential windfall for Cobb likely isn’t a new gain for the Atlanta region.
Perry is based in the Atlanta area, and his firm already owns the jet and presumably uses pilots and ground crew members who are already employed in Georgia. In fact, the Embraer would be joining two other jets that Perry controls that are based at Cobb’s McCollum Field.
“To me,” said past Authority member and former Cobb commissioner Thea Powell, “10 new employees really is not a great deal of job generation when you look at the great scheme of things.”
Attempts to reach a publicist and an attorney for Perry for comment were not immediately successful.
The value of the tax break comes out to about $183,000 per new job, according to an Atlanta Journal-Constitution analysis.
Wesley Tharpe, research director at the Georgia Budget and Policy Institute, said the 10-job deal “strikes me as a very questionable return on investment.”
“A state tax break might bring in jobs or economic activity from [another state],” Tharpe said. “This is just shifting around the deck of where this jet might be parked.
“There’s no new economic activity for metro Atlanta here,” he said.
How the Meatloaf was made
Geter, the development authority leader, said his team was approached by Perry’s representatives in May. At the time, Perry’s people sought tax breaks and a $50 million bond package toward the plane.
The negotiations were given the code name Project Meatloaf to keep discussions private.
“We want to protect the integrity of a client,” Geter said. “There’s no magic to the name.”
Ultimately, the authority and Perry’s company, ETPC Aviation LLC, agreed to a $35.3 million bond deal to refinance the aircraft. Geter said taxpayers are not on the hook for repayment of the loan.
Federal Aviation Administration records show ETPC Aviation, which is registered in Atlanta, owns an Embraer executive plane that had a list price as of 2015 of $53 million, according to Aviation Week.
Credit: Embraer
Credit: Embraer
While the incentives are active, according to the financial analysis, the county would abate more than $627,000 of tax revenue. The Cobb school system would forgo $1.2 million.
Critics say such tax breaks put a burden on others who don’t or can’t take advantage of such government incentives.
The amount the schools are giving up over the next 10 years, for instance, could pay the salaries of 28 teachers this school year.
Donna Lowry, spokeswoman for Cobb schools, said representatives for Perry and the Authority presented their plan to the school board last week. “There were not a lot of comments, but it was all positive.”
Geter also said the deal with Perry’s company could lead to new film production projects in Cobb.
It’s not the first deal Cobb has struck to land corporate jets. Financial technology company NCR also negotiated a package with the Cobb authority for their jet.
Geter said incentives are part of the war between communities for jobs.
“That’s part of the economic development world we live in,” he said. “ The No. 1 thing when a company is looking to locate is the availability of a workforce. And second, what incentives are available. If they had elected to go to Fulton, DeKalb, Fayette, the same options might have perhaps been put on the table.”
But local and state governments don’t have a great track record of accountability with their perks for business, Tharpe said.
“Georgia state and local governments both do a rather poor job of monitoring tax breaks long term, keeping track of cost and benefits and using those as guides for future decisions,” he said.
State’s biggest perk
The state has made the film industry one of the tent poles of its economic development apparatus, investing heavily in university, technical college and other training programs for film workers. But it’s biggest incentive program for Hollywood is reserved for producers like Perry, who runs his namesake Tyler Perry Studios in southwest Atlanta.
Perry also has become a shining example of what backers of the state’s film incentives want: a locally-grown producer who employs hundreds.
The state recently said Hollywood shot 320 television and film projects in Georgia in the 12 months ended June, spending a record $2.7 billion.
But those movie jobs come at a cost.
Georgia's tax credit program provided $925 million in incentives to production companies from 2009 to 2014, the most given to any industry, according to a study by Georgia State University.
