Economic development and prosperity depends on having government officials who can assemble the necessary elements required, avoid losing proposals and pay attention to the market environment.
Waning Albany, New York, went to work on trying to revive their future by aspiring to be the nanoscale science capitol and some big guns got behind the effort. The State University of New York created a research center and business incubator called the Nanotech Complex. The center attracted an impressive amount of funding and a venture in advanced manufacturing and semiconductors now run by GlobalFoundries, owned by an investment arm of the Abu Dhabi government.
The collaboration between the state government of New York, the university system and companies like IBM was impressive to say the least. However, when you are spending other people’s money — also known as tax dollars — the burden of risk on the government officials’ shoulders becomes remarkably light.
In 2011, the Albany Times Union reported, “The GlobalFoundries arrangement was one of the biggest taxpayer handouts ever offered to a private enterprise in the United States.” In fact, the government subsidies totaled around a whopping $1.2 billion or $1 million per job created in the project’s first phase.
These public-private collaborations tend to be very expensive on the public side and government has a difficult time with cost-benefit analysis.
In Georgia, property tax abatement is the major enticement for attracting job providing companies. Most of the tax abatement is handled out of public view through development authorities, a local vehicle created through the state government. Again, there is some risk as the development authority members making decisions on the tax give-backs have no accountability to the citizenry.
We are now seeing intense competition in metro Atlanta on stealing businesses from each other with financial incentives. Cox Automotive recently received $6 million in tax breaks for moving 1,200 jobs from Fulton County to DeKalb County. This exercise in financial cannibalism is destructive to all of us.
But even with the generous tax abatement offers, some areas are having a difficult time luring business because of quality of life issues. The bottom line is that you must be able to provide a quality place to live or you are out of the running for the high end opportunities.
DeKalb County is attracting high end jobs, primarily, in one specific location: Perimeter Center. The area in the city of Dunwoody is the county’s quality of life enclave and is really what keeps DeKalb County in the hunt.
Insurance giant State Farm is moving 3,000 jobs into the Perimeter Center area. Keep in mind that the traffic in Perimeter Center is already horrendous, but State Farm is hoping their employees will use transit to get to work. I believe the potential for regret of State Farm’s part for settling there is quite high.
Could Fayette County have attracted that huge State Farm deal? The answer is, regrettably, no chance.
First, while the massive office space necessary for State Farm is being constructed, they needed temporary class A office space to use as transitional space and Fayette County has nothing to offer.
Second, the really big economic development transactions are handled at the state level. The state officials have no class A office space to show anyone in Fayette County, and they do not consider us a viable target for that kind of activity. Remember, they drive the deals.
The economic development arm for Georgia Power had a map of metro Atlanta locations as class A office space targets and our county is literally not even on their map.
What is our potential of turning the tide and persuading large office development builders to take the necessary risk and build high end class A space in Fayette County? Currently, not very good.
Fayette County is an unknown entity in the major office construction market. Likewise, we do not have people in government leadership positions who have the desire or ability to ply that market away from the areas to the north. The county has been stagnate over the past year and a half. Fayetteville has been showing some spark, but the other municipalities are enervated.
An essential point to remember is that many business opportunities coming to our region require class A office space. This is not just the large State Farms, but also small and medium size players. We have nothing to offer them and the psychology of our larger economic development partners is Fayette County is not a high end office target.
Many of the jobs that our citizens say they want to see come to Fayette County are not coming unless we can provide the work space that is required. This is not an insurmountable problem, but it will [require] changes at the local government level for it to happen.
Steve Brown, Commissioner
Fayette County Board of Commissioners
Peachtree City, Ga.
