Georgia auto museum draws visitors and collects tax break

Credit: Steve Schaefer

Credit: Steve Schaefer

State law gave nearly $1M in sales taxes to Savoy Automobile

A shiny new museum glorifying iconic cars such as the ‘57 Corvette, ‘81 DeLorean and ‘75 Pacer opened with a cost to Georgia taxpayers beyond its $15 admission price.

Nearly $1 million in state sales tax money jump-started the Savoy Automobile Museum in Cartersville, a monument to American car culture located off I-75 that opened in December.

Boosted by lawmakers from the area, the General Assembly passed a state law in 2018 to provide a sales tax break to the museum’s developers.

The plan paid off for the museum, but critics of the project see it as an example of wasteful government spending.

Credit: Steve Schaefer

Credit: Steve Schaefer

The museum’s supporters say the investment was worth it, adding another tourism destination near the Tellus Science Museum and Booth Western Art Museum. All three destinations are run by privately owned Georgia Museums Inc., but the previous two didn’t receive tax benefits when they opened in 2009 and 2003.

“It’s building a legacy — this museum is going to be an automotive mecca in the country for that car culture community,” said Tom Shinall, development director for the Savoy Automobile Museum. “I have been blown away by the people that are coming to this museum from outside the state. That bolsters tourism and the economy.”

Economics professor J.C. Bradbury doubts that Georgians got their money’s worth, saying the museum “seems like a total boondoggle.” If the museum were such a good idea, he said, it could have been built without taxpayers’ support.

“These things are always pitched as drivers of economic development. They never are,” said Bradbury, who teaches at Kennesaw State University. “The people who support it, from the Legislature down to the private company that owns it, insist that it’s a good deal. There’s rarely any evidence that it is.”

Credit: Steve Schaefer

Credit: Steve Schaefer

Tax breaks for new businesses aren’t unusual in Georgia, but only occasionally do they rely on the passage of a state law.

In the 2018 legislative session, the state’s Republican majority and a handful of Democrats mustered enough support to approve the $960,000 sales tax refund on construction costs of the Savoy Automobile Museum. The museum refused to disclose its share of the cost, but legislators said at the time the project would amount to a $35 million investment.

The tax refund money comes from the state’s 4% portion of sales taxes paid on most purchases. Georgia collected $8.3 billion in net sales taxes during the past fiscal year, according to the Department of Revenue.

During a debate on the House floor, then-state Rep. John Pezold compared the tax break legislation to the George Orwell book “Animal Farm,” treating some businesses “more equal” than others. All Georgians pay sales taxes, but only some businesses get tax perks.

“I just don’t see the logic of having someone who lives in St. Marys pay for an automobile museum in Cartersville,” Pezold said this week. “It should be paid for by private donations and by people who choose to visit the museum, not through money taken by force.”

The 65,000-square-foot museum features five galleries showcasing about four dozen cars at a time, including muscle cars, Indy 500 roadsters and classic autos from the 1930s.

The number of visitors has exceeded expectations, with the museum on pace to record over 100,000 admissions in its first year, Shinall said. By comparison, the Tellus Science Museum serves about 200,000 annual visitors and the Booth Western Art Museum receives about 60,000 people.

Credit: Steve Schaefer

Credit: Steve Schaefer

State Sen. Bruce Thompson, a sponsor of the tax break legislation for the Savoy Automobile Museum, said it’s a tourism success for the state.

“People from all over the Southeast come in. We’re drawing people from everywhere,” said Thompson, a Republican from the Cartersville area who is running for labor commissioner. “People from out of state are coming and spending their money to be able to see cars that, frankly, they wouldn’t be able to see anywhere else.”

But skeptics such as Bradbury point out that many of the visitors to the museum are Georgia residents, meaning there would be no tax windfall from money spent there rather than at other attractions or stores.

Previous government forays into state-funded museums haven’t always been successful.

The state spent about $7 million to build and fund an Augusta Golf Hall of Fame that was never constructed.

The Go Fish Education Center remains open and cost $1 million in tax money to operate during the past fiscal year while bringing in $139,000 in revenue. The previously government-funded Music Hall of Fame in Macon closed in 2011.

The same bill that gave the tax break to the Savoy Automobile Museum also awarded a tax benefit to the Georgia Aquarium on an expansion that opened in 2020.

The aquarium said it claimed $1.1 million in sales tax refunds for construction costs, less than the $4.5 million maximum allowed under House Bill 793. The aquarium was only able to receive a refund on sales taxable items that remained on site or became part of property structures after completion of construction. The $120 million expansion included a shark exhibit, a redesigned entrance and additional exhibit space.

Representatives from both the Georgia Aquarium and the Savoy Automobile Museum said the tax breaks — and their statutory expiration date by the end of 2020 — required them to get the projects done on time amid the coronavirus economic slowdown.

“We needed to expand to provide new opportunities for guests and tourism to come to Atlanta and visit, or revisit, the aquarium,” said Christina Robinson, chief financial officer for the Georgia Aquarium. “These tax breaks helped us when we closed to the public due to the COVID-19 pandemic. No one could have predicted that, and any form of assistance helped as the project was well underway when we closed.”

Shinall said state assistance made a difference, but he didn’t know whether the auto museum could have been built without taxpayer support.

“There’s no doubt that it helps. Every little bit helps,” Shinall said. “I’m thankful that we had the opportunity to have that benefit and run with it.”