Fayette officials: ‘We didn’t know about tax breaks’
Even after being asked, FCDA failed to notify Fayette about Pinewood deal’s tax abatement
“Nobody told us” about the loss of an estimated $144 million in future property tax revenue associated with the Pinewood Atlanta Studios deal, Fayette County officials are saying.
In the aftermath, CEO Matt Forshee is leaving the Fayette County Development Authority, while five of the eight members of the authority board are leaving the board.
In addition, Peachtree City Councilwoman Kim Learnard is calling the county commission chairman “a one-man wrecking crew” because of the sweeping changes at the FCDA. Fayette County Commission Chairman Steve Brown blamed Learnard’s reaction on her political support of Brown’s opponent, Harold Logsdon, in the upcoming Republican Primary.
The “communication issue” that led the commission to take a different direction on the FCDA is now being explained in more detail than initially provided by county officials.
County Manager Steve Rapson and Chairman Brown confirmed Monday that in August 2013, Rapson asked the authority to allow the commission to review all bond and property tax abatement documents prior to their being approved by FCDA.
Brown noted this would allow the county attorney to review the documents and make sure county taxpayers were getting a good deal in exchange for the tax breaks.
Several months following that request to FCDA — and without notifying the county manager or the commission — the authority in November approved a bond and tax abatement package for Pinewood Atlanta Studios, Rapson and Brown confirmed.
The documents were approved in open court in December by Fayette County Chief Superior Court Judge Christopher C. Edwards and advertised in the county legal organ.
“The development authority didn’t tell us they were doing any tax abatements,” Rapson said, noting that Brown and Fayetteville Mayor Greg Clifton gave a number of media interviews touting the Pinewood project and how it was unique because no property tax breaks were necessary to attract the studios here.
Rapson said the fault doesn’t lie with most of the outgoing FCDA board members, but he does feel the outgoing CEO Forshee and the resigned FCDA Chair, Randy Hayes, are responsible for not informing the county of the property tax abatement.
The ultimate cost to taxpayers on the Pinewood property tax break was calculated to be $144 million over the 20-year life of the bond, Rapson said, adding that he felt the county and the Fayetteville city governments would have been OK with the deal inked by FCDA had it been brought to them before the documents were finalized.
“The people who should have the biggest issue with this is the school system,” Rapson said, since the school system derives a major chunk of its revenue from property taxes.
Rapson said when he approached the FCDA in August asking for notice of any new tax abatement proposals, it was a “pretty long and detailed conversation” with FCDA representatives.
Rapson acknowledged that Georgia law does not require the county to have a look at the paperwork in advance, and said he further understood the FCDA has to be a separate entity from the rest of county government.
“I felt we had some key players we didn’t have a relationship with, who we were communicating with, that did not communicate with us,” Rapson said.
Rapson reiterated his feeling that Pinewood has always acted in good faith during the tax abatement negotiations and in its other dealings with the county.
Though Georgia law does not require the FCDA to give the county say-so over its bond and tax abatement power, the document review was necessary, Brown said, “so our county attorney could make sure they were in the best interest of the citizens of Fayette County.”
The county commission, at its April 10 meeting, voted to install five new authority members. Rapson noted that only one of the authority members who was replaced had applied for re-appointment, and that the other four seats had terms due to expire.
However, it was several weeks prior when it became public knowledge that FCDA CEO Matt Forshee was resigning to take an economic development job with Georgia Power in the Augusta area. FCDA Chairman Randy Hayes, in his resignation letter, would cite Forshee’s exit as a signal that it was a good time for him to resign as well.
Rapson said he chiefly blamed Hayes and Forshee for the lack of communication sought by the county back in August 2013.
Rapson said no officials think Pinewood pulled a fast one on the county by any means. However, the 20-year property tax break was significant since FCDA’s usual deal in years prior was a 10-year break instead.
Rapson also said the county commissioners would have questioned giving a property tax abatement for the former Rivers Elementary School site, since the idea of the school system selling the property was to get the building on the tax digest so it could be providing revenue to the county and the school system.
Meanwhile, at Thursday’s meeting of the Peachtree City Council, Councilwoman Kim Learnard criticized Brown, noting that FCDA meetings are open to the public and had he attended those meetings, he would have known about what FCDA was undertaking.
Learnard noted that both she and Mayor Vanessa Fleisch were aware of the property tax abatements granted to Pinewood Atlanta Studios, and Brown should have been aware of the bonds as well.
“Either our chairman knew about these bonds or he should have known about these bonds,” Learnard said. “I did. Mayor Fleisch did. But then again, we attended meetings and we own telephones.”
Brown chalked up Learnard’s criticism to politics, claiming that she is a supporter of one of Brown’s challengers in the May primary, former city Mayor Harold Logsdon.
“I’m sorry if she doesn’t like that, but I have a fiduciary responsibility to the citizens of Fayette County and we are not going to tolerate no communication, especially after we made a request to have that level of communication.”
Learnard at Thursday’s meeting said the 20-year break was deserved because of the scale of the Pinewood project and how it will be attracting other companies here to serve the movie industry in what Learnard said was comparable to what happened when Kia decided to build an automobile construction plant in Georgia.
Learnard cited “conservative projections” that show Pinewood contributing more than $300,000 in revenue for both the county governments and the Fayette County Board of Education by the fifth year of operations. Although Pinewood got a break on property taxes, which will start at 5 percent and increase by that amount each year ... the company will be bringing a significant chunk of sales tax money to the county also, which will not just benefit county governments sharing the 1 percent local option sales tax — but also the school system which benefits from the 1 percent educational special local option sales tax.
FCDA CEO Forshee has noted that sales from the Home Depot located on the Pinewood site, which will provide materials for set design among other things for each production, are expected to be significant, as such materials are generally around 30 percent of the cost of a given movie.
So for a $100 million movie here, Forshee indicated that the sales tax will provide around $300,000 in sales tax revenue for both the county and cities and another $300,000 for the school system.
Learnard took little effort, if any, to mince words in her criticism Thursday.
“At this point in time, due to what I can only call a one-man wrecking crew, every Fayette County Development Authority board member with the possible exception of the airport authority seat and the Tyrone seat is now gone,” Learnard said. “Mr. Brown has ushered about 50 years of institutional knowledge out the door. Decades-long relationships with recruiters at the Georgia Department of Economic Development, existing industry and six project teams at the Georgia Department of Economic Development, including corporate headquarters, high-tech, healthcare and more. Those are gone. Those long-standing relationships with the metro Atlanta chamber, real estate brokers, site selection professionals, power companies: gone.”