Working Together, State and Atlanta Notch a Win
Decatur Metro | May 12, 2011Back in early February, Jim Galloway pointed out how the recent Republican representative shift from rural to suburb (think Perdue vs. Deal) played out during the 2011 legislative session with the passage of the Sunday alcohol sales bill. “An interesting perspective”, I thought. “I’ll have to see how this plays itself out in the coming months.”
Well, low and behold, give ‘em a couple months and suddenly, not only are ITP blue and OTP red purchasing Sunday liquor, but they’re standing side-by-side announcing that together, the state of Georgia and the city of Atlanta had just convinced Porsche to consolidate its North American HQ at the old Ford Hapeville plant.
Maria Saporta notes the recent rarity of such an announcement…
For people in economic development circles, they couldn’t remember the last time that the governor of Georgia and the mayor of Atlanta had stood side-by-side to make such an announcement.
In fact, as best folks could remember, such a joint appearance may have dated back to when Atlanta was hosting the 1996 Summer Olympic Games.
…But both Deal and Reed said that the two governments ability to collaborate was critical in Georgia and Atlanta attracting an increased commitment from Porsche.
“We wouldn’t have gotten this done without us working together,” Reed said after the press conference. “There was strong coordination between the state and the city. We both stepped up to the table repeatedly.”
A reminder that while there may still be real and theoretical differences between the two parties running the state and city, common interest sometimes trumps all. And as of 2011, there seems to be a lot more common interest between the city and state than there used to be.
Unsung or not, it’s already producing results.
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Still waiting to see the tax breaks, inducements, and set asides that made this fabulous deal possible.
Free 911 Turbos for all? I could get behind that. Or at least force Porsche to stop making that awful, hideous, worthless Cayenne SUV. Blech.
Seriously. I hate to hijack, and I agree with DM that it is interesting to see the shift at the state government level, but when you step back and look at the big picture, this is corruption. Plain old rent seeking. We get sucked into supporting it because it is an arms race between communities and states, but at the end of the day, this is not what government is supposed to be about, and the unintended consequences are staggering.
Tee,
Can you provide some more detail on the corruption and the consequences? I’m not challenging your assertions; I just don’t know enough about this type of deal to make a judgement. On the surface, it would seem like a good thing. But there are two sides to every coin, so I’m curious about the not-so-good stuff.
Me too.
I agree that this is not what governments should be doing, but corruption is a bit strong. When Cakes & Ale got showered with tax credits and subsidies to move all of 3 or so blocks, most people here thought it was a great idea. Well, this is the same thing on a larger scale. Here’s what Porsche received, I saw this on Yahoo finance:
The incentive package includes $1.75 million in job tax credits from Georgia, $400,000 in infrastructure improvements from the Department of Transportation, and discretionary money from the Regional Economic Business Assistance Program, or REBA, said Alison Tyrer, a spokeswoman for the Georgia Department of Economic Development. The REBA grant, with a city of Atlanta match, is expected to be about $1 million.
The package also includes city of Atlanta incentives. The Ford site is in an urban enterprise zone, and related tax abatements could net Porsche an estimated $11 million over the next 10 years, said Amanda Shailendra of the Atlanta Development Authority.
Thanks DEM. Very helpful.
I know everyone hates a pragmatist (at least half the time!), but now can anyone tell me how much the city and state stand to gain from the increased land-value from turning a defunct piece of land into a state of the art facility?
So pay your Taxes so the money can go into private pockets!
Yes, I consider that corruption.
Wow. Is it really that simple?!
Actually it is just that simple. If Porsche wants to locate here, all Atlanta and Georgia should provide are clean water and sewer services, adequate transportation, and public safety. If you are using tax funds to bribe a company to locate here, you are using tax money to ensure a company’s profitability.
But what if its future Porsche tax money and not yours? Doesn’t seem at all simple to me.
The 3-4 million dollars that went into incentivizing this deal is actually pretty low in terms of typical economic develompent incentives. Remember Kia? Hundreds of millions of dollars. We probably can’t find out, but I’d love to know what other states were offering. I’d put money on Georgia being on the low end. Atlanta is coming out the big winner in terms of financial incentives here. Job tax credits, DOT, REBA…they’re all state funded programs. REBA is basically the state’s closing fund for business recruitment. The Enterprise Zone they’re moving into is a something that Atlanta has had in place for years and years. Overall, this will probably result in a tax-base increase for the city, and in any ase I think it was the exposure from Atlanta Hartsfield-Jackson that made the deciding difference.
wait, city of ATL? the plant is in Hapeville city limits
Is ATL trying to annex the property because of the frontage on i-75?