Incentives and a failure to communicate

“What we have here is … failure to communicate.”

DeKalb’s failure to communicate over tax breaks in Brookhaven brings that classic scene to mind.

In the 1967 film Cool Hand Luke, the Captain said those words to Paul Newman’s character.

200016_Canada_Dollar_PCH109The context of the prison film and that scene, of course, doesn’t mesh with the communication problem that arose this week between Brookhaven and the Decide DeKalb Development Authority.

Decide DeKalb recently approved tax breaks for two projects, my colleague Mark Niesse and I wrote in today’s edition of The Atlanta Journal Constitution. No one told Brookhaven officials that those tax breaks would come, in part, at the city’s expense.

Decide DeKalb recently approved tax breaks for two projects. From today’s story:

DeKalb County’s economic development agency recently made a splash by approving millions of dollars in tax incentives for two businesses in Brookhaven.

There was just one glitch: No one told Brookhaven officials that those tax breaks would come, in part, at the city’s expense. …

At issue are $7.4 million worth of tax breaks that the Decide DeKalb Development Authority approved Oct. 8 for two companies. Developer Seven Oaks Company plans to build an office tower at Perimeter Summit along I-285, and Source One Direct is expanding its credit card customization facilities.

Late Monday, Brookhaven Mayor Rebecca Chase Williams sent out a statement saying she was “disappointed that we were not made aware of the Authority’s intentions.”

Seven Oaks CEO Bob Voyles said in an interview Tuesday that he spent much of the day calling Williams and other Brookhaven officials to help ease any concerns. And the authority’s chief pledged to do a better job communicating.

These bond and incentive deals are routine for major office developments and other big real estate projects that generate jobs in metro Atlanta, Voyles said. The incentives are vital to making the finances work, he said, calling them “a critical piece to the financing of our project.”

This isn’t the first time that jurisdictions have had conflict or at least some angst over the use of tax breaks as incentives for business growth.

Atlanta and the Development Authority of Fulton County have been at odds before over tax breaks for luxury apartments. Atlanta’s authority, Invest Atlanta, likes to require affordable housing in return for taxpayer aid. Fulton County expressed no such requirement, and Atlanta officials feared developers shopped around for better deals.

And in Cobb County, the local schools and Cobb’s development authority had a quarrel over school taxes being curtailed through similar incentives for a project near the new Braves stadium.

The deal to develop a mix of office space and residences was scuttled.

In Wednesday’s AJC, we look at the issue in DeKalb County and a vote to incentivize two projects that caught Brookhaven officials off guard.

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