This isn’t capitalism, this is bull. The Development Authority of Fulton County is at it again. I guess they’re in the Christmas spirit and past Senator, and once conservative, Brandon Beach is feeling generous with other folks’ tax money because they’re attempting YET AGAIN (tomorrow, 2 pm) to give away a tax abatement for the QTS data (now owned by X Corp aka Twitter) center already under construction. This is ON TOP of another property with the same story- Tilford Yards, that’s getting (wait for it) $32M in tax abatements. Both areas are already well developed, requiring no additional incentives to invite businesses in these areas, but here we are again with the county giving away public money to private interests like kids in a candy store. Bless their hearts, it must be hard to cram all that election-denier nonsense in Beach’s head along with figures too!
Silly kids, public money is for developers, not public good!
I’ve written previously about DAFC and how their poor use of tax abatements in NPU K starves education in Atlanta and doesn’t actually incentivize bringing business and jobs to the area. I wrote about how this legalized bribery is the way of doing business– not unique to Fulton, either. Folks tell me in Savannah it’s even worse (I offer my condolences). Development authorities across the state are funded by a portion of the projects they incentivize. So not only do they give tax money away to developers, they are also sponsored by them! I last wrote about the QTS data center in September, but I guess we’re nearing the end of the year and QTS (under the name of X corporation in this agenda) is going to try again, just hoping we won’t notice since they changed names. Cute, right?!?
Again, as state legislators consider pre-filing, reorganizing DAFC to be sustainably funded without this formalized bribery mechanism might be an option to consider. If conservatives are looking for another plume in your hat of tax reform, here you go! Providing sustainable funding for development authorities would enable economic growth to be fostered based on what it brings to the area, not how high the sponsorship might be. I can’t speak to other counties, but Fulton could well use the education funding to further the state’s largest population area. Further, moving away from the developer-sponsored special would also shift the tax burden from individual property owners to commercial property owners, which is consistent with Arthur Ferdinand’s recent determination.
Tilford Yards is rather egregious, even for DAFC.
There are no clear to me public nor community benefits tied to this abatement. Like the other data center, this data center location provides some road improvements and doesn’t actually improve anything for the area around it. The private road, roundabout, traffic light, and site grading constructed by the developer (that were completed a year ago) are for private rather than public benefit. I’d be REALLY interested to see the receipts on the $36.9 million the developer identifies as the cost of these improvements. I’m curious at what amount the public around this development would value those items. There’s no housing, no significant job creation, and the developer of this project has repeatedly rejected requests from the community that it incorporate public amenities such as green space or an extension of the Whetstone Creek trail, which will instead end at the data center’s fenced enclosure.
In fact, This project will eliminate de-facto public amenities that preexisted on the site such as “caboose park”. To that end, the surrounding communities unanimously endorsed a resolution calling on DAFC not to grant this abatement. We conditioned our only zoning approval for this project (a parking reduction) on the developers’ acknowledgment that the resolution represented the community’s position and those communities have never endorsed the project as a whole nor have they been asked.
The location of both of these data centers is already developed. Don’t get me wrong- there are areas of Atlanta that are still on septic tanks, rather than sewer, but this area has already experienced development. Across the street from Tilford Yards is an existing neighborhood- not empty lots. It’s also close to Cobb- not the south side of the county, where the DAFC chairman has identified the commission’s focus on development. The southern part of the County is one of those areas that lacks more infrastructure and merits DAFC’s focus on development incentives, not this area.
DAFC’s own IMPLAN model for a warehouse on this site predicted that it would employ 8 times more people (many of them hired from the community) and generate $230 million more economic activity than the proposed data center. Also, unlike the proposed data center, the economic activity generated by a warehouse would not simply be the sum of its electricity bills.
The risk associated with the possibility that this development would not occur without an incentive abatement begs the question of whether the cost ($32.1 million) is worthy of that risk. If this money were instead collected as taxes, it could be used to mitigate other, potentially more immediate risks. The “capital investment” associated with this data center is misleading. Roughly half that number represents equipment manufactured and purchased outside of Fulton County that would be installed at the site rather than locally expended construction costs (labor and materials). And unlike buildings, this equipment will depreciate into E-waste by the end of the proposed abatement or very soon thereafter.
This isn’t how economic development is supposed to work.
The $0 baseline assumption in the DAFC fact sheet for the next decade’s property taxes generated by a 55-acre site that just sold for $94.1 million is verging on me questioning DAFC’s board members’ sanity. If we’re using fake numbers to judge our economic development, may I suggest some more realistic ones?
For Musk’s X Corp.:
“A Fidelity fund estimate has devalued the worth of Twitter in the following months since Elon Musk purchased the social media platform. The Fidelity Blue Chip Growth Fund suggests their stake in Twitter, listed under X Holdings Corp., is only worth $6.55 billion. That number is down from the $19.6 billion stake price Fidelity listed in October, CNN Business reported.
Overall, Twitter may be worth only $15 billion, as opposed to Musk’s $44 billion purchase price, the report said. “Fidelity did not provide a reason for the markdown in its disclosure nor an explanation of how it arrived at its valuation.”
One might wonder why DAFC sees a benefit in providing a tax abatement to a company that again, made national news, because it is hemorrhaging money. I mean, do we normally invest in bleeding hearts as an approach to business in this state?
Is it DAFC policy to gamble public money on companies with such a documented history of failure? If so, can someone please explain to me how the county is supposed to benefit from these decisions?
I feel like DAFC has LOTS of reasons to avoid making these poor decisions and experiencing the egg on their faces, but I can’t tell you how this will turn out. All I can tell you is that I will be present for the decision. I will offer my comments and will continue to monitor this foolishness and share with you what I learn. Here’s the agenda for the meeting tomorrow at 2pm, if you’d like to follow along. Here’s the link if you’d like to watch from home. If you’re a resident of Fulton County and would like to send your own comments, or if you just want to tell Elon what he can do with his tax abatement request, please send them to: firstname.lastname@example.org.