Agenda Report #
It should be noted here that this development has already been constructed and has opened to the public. The new restaurant was primarily built on the existing site after the former building was demolished. The intent of the Enterprise Zone has been to encourage the expansion or development of new jobs in this area. Technically the application meets all of the requirements of this ordinance. However, this is the first request for a retail (restaurant) establishment that has already been constructed and is actually operational. There is nothing in the ordinance that speaks to this condition, and requires a policy decision from Council to determine whether such a tax exemption should be granted.
Financial Considerations: Tax abatements under the State of Georgia Enterprise Zone Act may be made available to this project. Ad valorem taxes will be abated based upon the following schedule:
One hundred percent (100%) of the property taxes shall be exempt for the first five years; and,
Eighty percent (80%) of the property taxes shall be exempt for the next two years; and,
Sixty percent (60%) of the property taxes shall be exempt for the next year; and,
Forty percent (40%) of the property taxes shall be exempt for the next year; and
Twenty percent (20%) of the property taxes shall be exempt for the last year.
The Tax Commissioner with the Board of Tax Assessors will provide the estimate of taxes abated for the ten-year period beginning with Tax Year 2014.
Projected Annual Fiscal Impact Statement: At a stated value of $1,200.000.00 investment in real property, (land $200,000.00, buildings $700,000.00 and equipment $300,000.00) the 10-year abatement would be based on an annual valuation of the asset, the type of asset (percentages set by the state) and the annual mileage rate.
Without the additional $1,200.000.00 investment proposed by the applicant, the annual tax revenue, (net to the city after school, state and bond mils are subtracted) would be $8,864.92 per year. Over ten years, (with no new investment - at it's current valuation and millage rate) the property would generate approximately $88,649.92. Over ten years, using the applicant’s stated additional investment and making assumptions of continuity in land value (and not considering depreciation of personal property), the property could generate $113,454.00
Legal Considerations: The Board of Tax Assessors also requires to be notified of the status of the project as of January 1 of each year in order to grant the abatement. This information enables the Board to value the property at the stage of completion as of the January 1 valuation date asset by Georgia code. The Board would need to know when the project is considered completed. The only personal property types, which have been approved for recognition within the Enterprise Zone, are machinery and equipment that is permanently located within the EZ.
Recommendations/ Actions: Adopt the resolution for McDonald’s Company, which would allow them to receive ad valorem tax abatements (with the exclusion of school and general obligation debt levies) as specified under the Enterprise Zone Employment Act.
EZ McDonalds Business Application.pdfEZ McDonalds letter of job verification Sayers 10.15.13.pdf
McDonalds Agenda Report - Enterprise Zone Updated Version 12413.docx2013 Lomax legal opinion on SIC 5200 to 5900.pdf2013 Lomax legal opinion on qualified applicants.pdf