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Sembler tax break would cost DeKalb $19M in property taxes


DeKalb County government and schools would realize a net loss of $19 million in property taxes if the county grants a 20-year tax break for a Brookhaven project, a review of the developer’s request shows.

The developer, The Sembler Co., says its completed residential and shopping complex would generate taxes and fees that would far exceed the tax exemption it is seeking. But the company’s analysis shows most of the new revenue would be collected by another agency (MARTA) or would be paid even if the tax break is denied.

Sembler president Jeff Fuqua (left) asked the DeKalb Development Authority for a 100 percent, 20-year exemption from property taxes on one planned apartment building and retail space at its Town Brookhaven project. Numbers submitted to the authority May 12 show the break would amount to $51.7 million in unpaid property taxes.

During the same period, Sembler’s analysis said, the project would generate $119.2 million in sales and property taxes and other fees. The net gain: $67.5 million.

But that gain includes $41 million in sales taxes collected by MARTA, not DeKalb County. The estimate also includes $45.6 million in property taxes on other apartments and townhomes already under construction at the Brookhaven site; those buildings are subject to taxes regardless of whether Sembler gets its exemption on the adjacent land.

Back those numbers out, and the impact on tax collections for DeKalb government and schools becomes a $19.1 million loss.

On April 14, Sembler submitted an earlier set of numbers that showed it would pay $32 million in taxes on the non-exempt buildings over 20 years, not $45.6 million. It is not clear why that estimate changed.

(The estimates assume that SPLOST – the 1-cent Special Local Option Sales Tax for DeKalb schools – would only last two more years. If voters extend SPLOST over the next 20 years, Sembler said, the school system would collect an additional $41 million from the Brookhaven project.)

Fuqua, asked about the numbers at a standing-room-only community meeting Monday night, agreed to explain details of the company’s economic analysis after the meeting ended. Afterward, though, he walked briskly from the room and refused to answer questions.

Fuqua also declined several times to say what Sembler would do if the tax break is denied.

Fuqua insisted the benefits of the Brookhaven project would far outweigh the loss of property taxes there.

“There must be 10,000 jobs lost in that mess of Peachtree [Road]. It’s a blighted area,” Fuqua said. “We’re the only ones willing to invest that kind of money there.”

Under current law, the appointed seven-member Development Authority has sole discretion over the requested tax break. The proposal is scheduled for discussion June 18. Maceo Rogers, DeKalb’s deputy economic development director, has said a decision would not come until July.

Rep. Mike Jacobs, who hosted Monday’s community meeting, said he plans to push statewide legislation next year to require approval of county commissions and boards of education for such tax abatements.

The development authority usually meets at 7:30 a.m. after advertising its business in a legal advertisement in a local newspaper.

“That is not a true public process,” Jacobs said. “The reality is that those processes occur very much in the shadows and out of the public eye.”

Jacobs also warned that other developers are watching the Sembler case closely. “There are people at the DeKalb Economic Development Department who will tell you that there are at least 10 of these [proposed tax breaks] waiting in the wings after Sembler gets theirs,” he said.

Related documents:

Sembler’s May 2009 analysis

Sembler’s April 2009 analysis

Excerpts of minutes of Development Authority’s April 14 meeting





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