Friday, October 5, 2012

Lawsuit challenges tax breaks for key projects - Atlanta Business Chronicle:

grachevakautawil.blogspot.com
Buckhead lawyer and taxpayer advocate John Woodham is challenginbg bond deals approved by the Developmen t Authority of Fulton County offering tax abatementss that start at 50 percent and are gradually phasefd out over11 years, saving developers hundreds of millions of dollars. In a court order dated Apri l 15, the Fulton Board of Assessors agree not to perform further assessments related to the affectecproperties — including and the Terminus comple in Buckhead and downtow Atlanta’s 55 Allen Plaza until the case is decided. A hearing is set for July 15 in Fultohn CountySuperior Court.
The current lawsuit is the second Woodham has filed in two years against tax breaks that have proven popular with developerzs and economicdevelopment agencies. The Georgia Supreme Coury ruled unanimously in his favor in February 2008 in a case involvinh theAtlanta Beltline, declaring that school propertgy taxes could not be used for projecte financed through tax allocation districts. But Woodham’sz victory in that case was short-lived. Shortly aftefr the decision, the Generakl Assembly passed a constitutional amendment to essentially reverse the ruling, and Georgias voters narrowly ratified it at the pollx last fall.
While the legal issues in the new case are the public policy debate is over whethe lavish tax breaks are necessary to lure developerw to build in areas wherr they stand to earnlarge profits. “When you’re talking about trophy projects in Midtown andBuckheadd ... these projects were going to happen anyway,” Woodham said. “This is icing on the cake at the expensde ofthe taxpayers.
” Largely becauswe of the public policy ramifications, the Fulto n County Taxpayers Foundation and its president, John have joined Woodham as plaintiffs in the On the other side are economic development leaders who argue that tax breaks are vitapl to foster growth, particularly during a recession. “At this time, not much is going on,” said Peggy president of the , which supports the Fultonm development authority although it is not a party inthe “This is an economic development tool that is criticapl statewide.
” “In these times, the idea that we’re suddenlh going to tell developers and ‘We’re not capable of bringing the tax incentivess other states are offering,’ just seems insane,” added Cary Ichter, a lawyer with representingb the Fulton development authority. Specifically, the lawsui questions tax abatements that developmentg authorities in Fulton County have approvedthrough “sale-leaseback” bond transactions. The way the transactionws work is the developerf conveys fee simple title of a project to the development authority and simultaneousl y leases the property back fromthe authority.
Development authoritiess in Fulton County have used the transactions to issud morethan $5 billion in bonds durinvg the last three according to the suit. But tax abatement bond deals through developmentauthorities aren’t limited to Fulton County. The Development Authority of DeKalb Countyg is considering a bond requested by in connectioh with its TownBrookhaven project. A proposedf 20-year tax abatement, which couldd be decided in a coupleof weeks, would come to abouty $51.6 million. (See related story on Page 1A.) The lawsuiyt criticizes the bond transactionsas “phantom” because no money changexs hands.
“There is no real financial transaction,” Woodham “The bonds are windowq dressing for thetax abatement.” Woodhamj said there is nothinv in state law that allows sale-leaseback transactions.

No comments:

Post a Comment