OPINION: Tax giveaways, abatements or incentives? Potayto, potahto



The Fulton County Development Authority may have momentarily lapsed into an uncharacteristic state of reason last week when it paused on giving a huge tax break — $45 million — to a data center developer in Northwest Atlanta.

The authority, known for lavishing giveaways to any developer or corporate exec who could fog a mirror, has possibly developed a sense of guarding taxpayer coffers.

Or perhaps it’s simply a stalling mechanism to allow the authority’s board members time to count votes and develop a better narrative before showing some love to a big company.

Case in point is a request from Kansas-based Quality Technology Services, or QTS, which wanted a 10-year tax break that would mean less future taxes for Atlanta schools, as well as Atlanta city and Fulton County services.

The authority’s board paused on affording the tax break last week after city of Atlanta and Beltline officials, as well as a bunch of neighbors, hollered.

“It’s taking away money from the schools, the city and infrastructure,” Arthur Toal, president of the Howell Station Neighborhood Association, told me. “Someone has to pick up that bill.”

That being everyone else, as in other businesses or homeowners. Toal noted the deal would benefit Blackstone, the investment colossus that owns QTC. “They’re a trillion-dollar company,” he said.

The neighborhood volunteer was overstating it. But only a wee bit. Blackstone, which calls itself “the world’s largest alternative asset manager,” oversees $991 billion in assets. It’s “The Blob” of money, gobbling up chunks of companies including Atlanta-based Spanx.



(Side note: I thought Blackstone got some incentives to move into the white-hot area near Ponce City Market and Murder Kroger. However, that was BlackRock, another big pile of money.)

Such property tax abatements were originally meant to be carrots for developers to construct buildings that normally would not be built without such incentives. And that creates jobs.

On both counts, those reasons are iffy here, seeing that QTS already started building its data center, without any tax breaks, and it would create 20 (yes, 20!) permanent jobs, according to the company’s request. QTS said the 755,000-square-foot facility on West Marietta Street would be a $1.3 billion investment and could create $111 million in new taxes over the next decade, even with the $45 million abatement.

On the face of it, the ask is outrageous because, as I said, they are already building it! But big companies are largely unembarrassable when it comes to asking for tax breaks. They’re almost expected and developers have gotten them for building in hot markets like Midtown, Buckhead and on the Beltline.

“You’d think they’d learn their lesson and not do things so totally unnecessary, but here they are again,” said Bill Bozarth, a former board member of Invest Atlanta, the city’s development authority which has asked Fulton’s authority to stop giving tax breaks in Atlanta.

“The bad publicity with Bob Shaw and per diems embarrassed them and curbed this kind of thing,” he said. Or at least he hoped.

Bozarth was referring to a 2021 investigation by the AJC that discovered Shaw, the former board chairman, collected more than $1 million in salary and board stipends in the previous decade. Others on the board shared in the bonanza.



The board was chastened and revamped with several new members. But it’s funny how midlevel money grubbing made a much bigger public impact than the authority routinely giving away tens of millions of dollars to companies who did not need them.

A QTS spokesman told me the company is playing a “significant role in reinvigorating Atlanta’s Westside” and the request for incentives was paused to give “additional time to allow for more education and dialogue on the project with stakeholders.”

“Incentives such as these are helpful in attracting high-caliber, long-term tenants into QTS facilities,” he added.

Last week, in response to the QTS request, Fulton authority board member Tom Tidwell, who has carved a role as board skeptic, emailed his comrades some articles from tech periodicals and said, “I would encourage everyone to read the attached articles about the growth of and demand for data centers in Atlanta. The idea that QTS needs a subsidy to attract a tenant is laughable. The vacancy rate fell to a record low in 2022 of 3.6%.”

Data centers are having no problem filling up their square footage with willing renters.

Michel “Marty” Turpeau, the authority’s board chair, said the request was pulled because of “concerns” from Atlanta officials.

“We are not battling with the city of Atlanta; we want to partner with them,” he said.

What about Atlanta’s request for the Fulton authority to butt out of the city and stop giving abatements there?

The term “abatements” is not correct here, he said. He said abatement means cutting existing property taxes. “Incentives,” he said, is a better word. It means you get a lot more in future taxes, just maybe not as much.

Mr. Turpeau seems to be a glass half-full fellow in the Giveaway Game.