ALPHARETTA, Ga. – Avalon is a huge, multi-million dollar project. That much is beyond doubt. With thousands of jobs created both in the construction and operation of the mixed-use behemoth, millions of dollars in taxes – both sales and property – will flow into Alpharetta and the county.
Unfortunately Alpharetta might not get as much of that pie as they initially thought.
The Development Authority of Fulton County has offered $550 million in property tax abatements to the project, cutting the city’s income from property taxes by as much as 50 percent and scaling back over the next 10 years.
And the city was not told about it. They found out through a posting in the “Roots in Alpharetta” blog.
At their June 15 council meeting, the City Council met with representatives of the Development Authority to air their grievances.
“I’m very frustrated by this process,” said Council member Jimmy Gilvin. “One and a half years ago North American Properties said they had deep pockets and was moving forward [with Avalon]. And yet I sit here tonight and I’m told this project, that is already breaking ground and signing leases, might not go through unless it is subsidized by the people of Fulton County and Alpharetta.”
City officials estimate Alpharetta will lose about $1 million over the 10 year period of the tax abatement.
The Development Authority has the power to issue bonds to incentivize potential private projects it deems will have a sizable impact for the public good. It has done this for the past 40 years. Many of Atlanta’s largest projects have benefited from the Authority, such as Newell Rubbermaid and UPS, who moved their headquarters to town.
“In Fulton County, once you get inside the perimeter, almost every major project had incentives,” said Penn Hodge, a local developer and member of the Development Authority Board. The Board unanimously approved looking at the loans. “This is a project that has failed once [before]. It’s a very difficult project in the best of times to make work.”
While the city will indeed receive higher sales taxes thanks to Avalon, due to sales taxes being collected by the county and distributed to cities based on population, other cities – such as Atlanta and Johns Creek – will also receive a tax bump, but one larger than Alpharetta.
“A 10-year tax abatement is something that should that have been discussed with us,” said Council member D.C. Aiken.
The city is responsible for improved public infrastructure and increased public safety for Avalon. Aiken said the city was expecting property tax revenue to help pay for the increased costs. Now the city is paying out of pocket.