Grubby. Sordid. Underhanded. Shady.
The words to describe the Development Authority of Fulton County flow easily after recent revelations about how that agency operated. Or more precisely, why it did as it did.
I have often criticized the authority for giving away hefty tax breaks to grand developments in red-hot areas like Midtown, Buckhead and on the Beltline. The authority’s means test to cut a deal has been simple: If you want to build something big and can fog a mirror, then you’re good for 10 years of lucrative property tax breaks.
These are taxes that won’t be going to the schools, or to the city to pay for cops or street repairs, or to the county to pay for Grady Memorial Hospital, libraries or mental health programs. The Development Authority of Fulton County, or DAFC, has been so generous in doling out tax breaks that Atlanta’s City Council and school system have repeatedly screamed “Stop!”
Atlanta wants its development board, Invest Atlanta, to cut its own deals, which were not to be as bountiful and may even target communities actually needing help. The DAFC considered Atlanta’s requests, shrugged and then responded, “Nah.” It was always puzzling why the Fulton authority was so quick to dismiss the city’s concerns and so insistent to continue its business-as-usual approach.
Until now.
The DAFC is a shadow government of nine members appointed by the Fulton County Commission and given broad authority to cut deals to help stuff get built. The idea was to help create jobs and win construction projects that wouldn’t get done without a little boost, especially in communities that have been left behind.
But now a light has shined on the Fulton authority’s inner workings. And what we see is ugly. It turns out the little shadow government operated to create a slush fund to reward its members.
Credit: J. Scott Trubey
Credit: J. Scott Trubey
A few months ago, a man named Julian Bene, a former Invest Atlanta board member and an ardent critic of the DAFC, started snooping through its records. He forwarded some information to The Atlanta Journal-Constitution and Channel 2 Action News. Soon afterward, AJC reporters Scott Trubey and Ben Brasch, as well as Channel 2’s silver-maned investigative whiz Richard Belcher, started their own digging.
They found out the Fulton authority paid nearly $800,000 in per diems to its board members since 2015 and more than $1 million since 2011. The per diems were $200 a pop, but several board members apparently didn’t take Latin in high school (per diem means “by the day”) because they were receiving several per diems per day, sometimes $200 for each agenda item during a single meeting. County commissioners could not find a record that they ever authorized any per diem for DAFC board members, as required by state law.
On top of that, Bob Shaw, the authority’s former chairman, got more than $1 million in salary and per diems from January 2011 to April of this year, according to documents. Shaw collected about $516,000 in per diems, while fellow longtime members Samuel Jolley Jr. and Walter Metze got $161,000 and $145,000, respectively. It was a true bipartisan feeding frenzy of Republican, Democrat; north Fulton, south Fulton; Black and white.
Shaw, Jolley and Metze have long careers in public service, and all are north of 80 years and are now off the board. Shaw, who is 91, is seen as the grandfather of the Republican Party in Fulton County and Georgia. Metze, meanwhile, is married to a Democratic state representative.
The DAFC earns fees each time it cuts a bond deal. With the tax-saving deals I mentioned, the authority issues bonds that are “bought” by the same developer seeking the tax break, and the property is “owned” by the authority for 10 years. It’s a legal ruse and the DAFC, as do other such authorities, gets one-eighth of 1% back in fees.
That means for each $10 million in such deals, they’d pick up $12,500, meaning they must churn out lots of deals to keep the per diems and side jobs flowing. One news report documented about $189 million in such abatements in 2019 alone in Atlanta, about 80% coming from the Fulton authority.
They have also paid tens of thousands of dollars for PR and lobbyists through the years. It’s sort of an endless cycle in which they must spend the money collected from bond fees on lobbyists to ensure the Legislature doesn’t stop them from doing business as they always have. The fees gotta keep rolling in.
I tried calling most of the members but only Kyle Lamont picked up. “I’ve spent a whole lot of time trying to do what’s right. I’m trying to move forward,” said Lamont, who joined the board in 2019. He added, “I don’t use the board to supplement my income.”
He received about $25,000 in per diems, seventh on the list. Asked about Atlanta’s wish for the DAFC to butt out of the city, he said he is an Atlanta resident and has worked to bring the two development boards closer together. However, he added, “I’m not sure not doing development in Atlanta is the right option.”
I called Sam Bacote, a DAFC board member running for a seat on the Atlanta City Council. He received nearly $55,000 in per diems, fourth highest. I figured the question of the Fulton authority staying out of Atlanta would be perfect for a man who wants to join the City Council. I didn’t reach him.
Michel “Marty” Turpeau IV is the board’s current chairman and its interim executive director. He received nearly $46,000 in per diems, fifth on the list. I couldn’t reach him, but he told The Atlanta Journal-Constitution earlier: “DAFC learned of questionable practices from the past. We put policies in place to prevent them in the future. We are ready to move forward.”
Bill Bozarth, a member of Invest Atlanta who has been critical of the Fulton authority’s way of doling out tax breaks, told me: “I don’t know if this will put them in their place or not. It certainly should. It borders on criminal. Now we know why the incentive was so strong for (writing these bonds).”
Lee Morris, a Fulton County Commission member, said, “The only funding they get is through the fees. It’s an inherent conflict of interest.”
He thinks the County Commission should fund the authority with a set stipend and then the county would collect fees from the bonds. He’s also in favor of slicing the per diem in half. Morris, a longtime friend of Shaw’s, was angered to see what has transpired. He said having a board member, Turpeau, who is also the authority’s top employee is another conflict of interest.
“He now heads the staff that makes the decision (to issue the tax-break bonds) and he also heads the board that makes the decision to accept or reject that proposal,” Morris said.
Credit: Rebecca Wright
Credit: Rebecca Wright
Legislators on both sides of the aisle are looking at reining in the power of the DAFC.
Matt Westmoreland, an Atlanta City Council member and a critic of the DAFC, noted the irony that the agency routinely shrugged off critics as it doled out tens of millions of dollars in tax breaks to projects that didn’t need them, but is ducking for cover as it’s assailed for “gross manipulation of per diems.”
“But if that is what it takes to catch people’s attention,” he said, “then that’s OK.”
