North Fulton cities want a say before county agency gives corporate tax cuts

DAFC is one of Georgia’s most powerful and far-reaching development authorities, a government entity that’s able to offer property tax discounts to developers or to recruit or retain corporate investment. Its deals can involve waiving tens of millions of dollars in potential future property taxes in exchange for projects that are estimated to grow the county’s tax base, promise jobs or offer public benefits, such as affordable housing.

But critics have long alleged DAFC grants tax breaks to projects that would have come to the county anyway. An AJC investigation of the agency in 2021 found it overwhelmingly granted incentives to projects in hot areas like Midtown and along the Beltline.

Credit: HYOSUB SHIN / AJC

Credit: HYOSUB SHIN / AJC

The authority is able to enter into deals in Atlanta and the county’s other 14 cities, all of which have the ability to form their own development authorities for the same purpose. Starting last year, cities in North Fulton were given the legal option by the state Legislature to pass resolutions to require collaboration before proceeding on tax break deals.

“It’s a good sort of check and balance,” said Bob Ellis, a Fulton commissioner whose district includes Sandy Springs and Milton. “(It should) force a collaboration among all of the different stakeholders so there are no surprises.”

Milton on Dec. 15 was the first to adopt this type of resolution, a vote first reported by Appen Media.

DAFC, which recently rebranded as Develop Fulton, has played a role in recruiting several projects to North Fulton over the years, including high-profile ones in Sandy Springs. Those include Mercedes-Benz’s corporate headquarters, a large office by Global Payments, the Plaza at City Springs shopping center and multiple apartment complexes.

Credit: Phil Skinner

Credit: Phil Skinner

“We value close collaboration with the county’s cities and look forward to working together to support high-quality development that aligns with local priorities, strengthens community trust and delivers long-term economic value,” Sarah-Elizabeth Langford, the authority’s executive director, said in a statement.

Avoiding surprises

Development authorities, which are appointed by elected county and city officials, act like shadow governments and often have little oversight.

Proponents say the boards’ ability to act outside local government allow flexibility to attract companies, but it’s led to periods of controversy.

DAFC was embroiled in a scandal of involving per diems paid to certain board officers that drew statewide attention and led to an overhaul of its board. Some development authorities, including DAFC, have faced criticism for approving incentives for projects that would have happened without tax breaks or were already under construction.

Development authorities also collect a fee for brokering incentive deals, which has led to accusations that they’re incentivized to strike deals.

“These development authorities live off the fees that they get for arranging these projects,” Paul said. “So it’s really kind of a money chase.”

Every Georgia county and city has the ability to form its own development authority or industrial development authority. Cities can form authorities for their downtowns, while joint authorities can represent multiple jurisdictions.

Credit: Special

Credit: Special

That has led to urban counties like Fulton and DeKalb becoming a complicated spider’s web of development authorities with overlapping jurisdictions. This allows companies and developers to choose which authority to consider their project for incentives.

“It’s always been absurd to have a county development authority with overlapping tax break authority with the cities,” said Julian Bene, a former board member for Invest Atlanta, the city’s development authority. “It should be one or the other because obviously there’s a value to playing them against each other.”

North Fulton only

While cities in North Fulton are starting to place limits on DAFC’s activities within their city limits, Atlanta and cities in southern Fulton don’t have the same recourse.

The resolutions passed by Sandy Springs and Milton were made possible by House Bill 155, Republican-sponsored legislation that went into effect last summer. The bill applies only when 95% or more of a county is municipalized, excluding consolidated and unified governments. Fulton County is only one in Georgia that meets that criteria.

The bill’s language explicitly only allows cities located north of the county seat, but not the county seat itself, to pass a resolution barring a development authority’s unendorsed actions. That leaves only Alpharetta, Johns Creek, Mountain Park and Roswell the ability to adopt similar resolutions to their Northside neighbors in Sandy Springs and Milton.

That exclusion has drawn criticism for leaving out Southside communities and Atlanta while granting Northside cities, which are some of the state’s largest pockets of wealth, this ability.

“If the North Fulton Cities have the right to say no, then Atlanta should have the right to say no,” Bene said.

Credit: Miguel Martinez-Jimenez

Credit: Miguel Martinez-Jimenez

Paul said DAFC has historically had a “gentleman’s agreement” to consult city leaders before progressing projects in their area. He said the resolution aims to make sure that communication doesn’t slip through the cracks.

“We’re willing to work with you,” he said of DAFC. “A lot of these projects we might like, but we don’t like being blindsided.”