Tuesday, June 9, 2009

The Latest Update on the Sembler Proposal for a Tax Abatement

Sembler Update from Commissioner Gannon
From Ashford Alliance Community Organization

"As you may be aware, Development Authorities are independent entities created by the state and The Board of Commissioners does not have any say in the decisions made by the Development Authority. There is litigation pending regarding the role of the public in some aspects of Development Authority incentives, but not this kind of transaction known as a PILOT bond. PILOT is short for "payments in lieu of taxes." In this deal, Sembler will convey to the Development Authority ownership of large portions of its mixed-use Town Brookhaven project. The Development Authority will float bonds to finish construction of the project. The Development Authority also will lease the project back to Sembler. Under this lease, Sembler will make rent payments to the Authority sufficient to repay the principal and interest on the bonds. Bond funds also could be used to refinance Sembler's existing loans for the project at a more favorable interest rate. Commissioner Gannon does not support tax incentives for this property and encourages you to attend the Development Authority meetings so that they can be aware of the public sentiment. The next meeting is tentatively scheduled for June 18, 2009 at 8:00 AM. You may learn more about the Development Authority on the DeKalb County website at www.yourdekalb.com under Departments then Economic Development. Also, State Representative Mike Jacobs held a town hall meeting on the subject last evening."

Mike Jacobs Reports on Sembler's Proposal
Partially quoted from Mike's District 80 Website

"Thank you to everyone who responded to my e-mail message last week regarding the Sembler tax abatement proposal. I intend to reply to each of your messages personally, although that will take some time.

Most responded in opposition to the tax abatement. A handful supported it.

This is not about “standing in the way of progress,” as a couple of people characterized it. It’s about transparency and accountability in the way our county and school taxes are managed. It’s also about a very serious and real concern that throwing open the barn doors to giving property tax abatements to developers whose projects are caught in the doldrums of the real estate market ultimately will place upward pressure on the tax burden of DeKalb County citizens. ...


I also want to clarify that I do not blame Sembler for looking after its business interests.

I do, however, believe that Gene “$18K” Walker should be made to understand the intractable conflict of interest between his dual service as Chairman of the DeKalb Development Authority and as a member of the DeKalb County Board of Education.

The public should call or e-mail every other member of the Board of Education and ask them to insist that Dr. Walker allow them to vote on whether the Sembler tax abatement will happen.

Word is spreading that CEO Burrell Ellis may insist that the Board of Commissioners be given the right to vote on the Sembler tax abatement proposal. He could make this happen because he appoints the members of the Development Authority.

Shouldn’t the Board of Education have that same right? After all, the school system could stand to lose more property tax revenues than the county if these tax abatements are allowed to go forward.

Both the Board of Education and the Board of Commissioners should have the right to vote on the Sembler proposal. If Dr. Walker disagrees with that, then he should have to answer to his colleagues on the Board of Education for his refusal to let them vote. He has sufficient power and influence over the affairs of the Development Authority to hold up the tax abatement until the Board of Education weighs in.

You can make that happen. Please contact the members of the Board of Education and ask them to ask Dr. Walker to let them vote.

You can find their contact information at the Board of Education Website."


In fairness, Sembler rep Jeff Fuqua has a rebuttal in the AJC Letters to the Editor today in which he states that the AJC, "created a distorted and incomplete picture of our efforts to negotiate with the DeKalb Development Authority a tax abatement for part of our Brookhaven property. Beginning with a misleading headline and using loaded words and strident and alarmist rhetoric, the story created an erroneous and extraordinarily unfair impression of our proposal that has done a great disservice to Sembler, to DeKalb and to your readers. Far from seeking a “free ride,” as your article virtually snarls, Sembler is seeking support for a project that represents a $400 million investment in DeKalb and which, even with limited development, come January 2010 will pay DeKalb over three times more in property taxes than the property paid prior to Sembler’s involvement (from $400,000 up to $1.4 million)."


Ella Smith said...

Great post.

I came home today to go to the meeting tonight and I realized it was last night and I missed it. Well I guess I do not have my summer organized well yet.

Dekalbparent said...

Check http://www.atlantaunfiltered.com/atlmainstream0609.html

I found the article helpful in looking at all the (large) numbers that are being discussed. Also check the link to the minutes of the Development Authority April 14 meeting. What struck me was that Jay Cunningham was present at the meeting, and he requested at that time that the BOE be updated and informed of what is being considered and discussed. This was April 14.

After a pretty contentious discussion at last night's Board meeting, it was voted to ask the Development Authority to update and inform the BOE about what is being considered and discussed. June 9. Almost two months later. I am probably correct in assuming that no conversations have taken place to date...

Kim Gokce said...

@Dekalbparent: "no conversations have taken place to date..."

Except, of course, between the Chairman of the DeKalb Dev Authority and Dr. Walker ... sorry, I couldn't resist.

Ella Smith said...

Kim you are too funny.

Anonymous said...

Burrell Ellis should do whatever he can in his power as CEO to remove Gene Walker from the Development Authority.

Cerebration said...

I have to make one comment about Dr. Walker. Even though I'm concerned about him being on both the BOE and Dev Authority - I was very impressed by the fact that he brought (and read out loud) concerns from his constituents (about the $10k bonus program) to the BOE meeting. At least it appears as if he listens to the people he represents and tries to bring their concerns to the fore.

Point for Walker from me at the last Board Meeting.

Anonymous said...

No points for Walker from me. I wrote him a nice, long letter and asked him to please explain why he does not recuse himself from the Sembler issue. He didn't read my letter and he is supposed to represent me. IMO he is just a politician who only addresses the issues he supports. I am not sure why he is so bent on attacking Crawford Lewis but I am sure his motive will only benefit Eugene Walker.

And Cere, don't you recall his statement that the Development Authority processes that he oversees are transparent??? What a joke.

Cerebration said...


Cerebration said...

In one of TWO front page articles unbecoming to DCSS in today's AJC, the following was stated,

People affiliated with Florida-based Sembler Co. spent $18,000 last year helping Eugene Walker win his seat on the DeKalb School Board.

Walker is also chairman of the DeKalb Development Authority, which could vote Thursday on whether to give Sembler what officials say is an unprecedented subsidy in the county: a 100 percent property tax abatement over 20 years for part of the company’s Town Brookhaven project near Oglethorpe University.

Campaign finance records show that five Sembler executives gave Walker $2,000 apiece on Sept. 27. Then, on Nov. 19, those same executives and three of their relatives each gave Walker an additional $1,000.

The donations did not exceed legal limits, but they did contribute to Walker’s financial advantage in the election. He had six opponents, and he raised four times more than all of them combined. Sembler gave him about a third of his total.

To read the entire article, go to

(The other article is about the CRCT cheating at Atherton ES.)

Cerebration said...

Oh - just had to add a little more from the article --

Walker said he “welcomed every penny” from Sembler but that the contributions “certainly haven’t bought my vote.”

Walker has already cast two votes that benefited Sembler.

Last fall, the Development Authority gave the company a 10-year, partial property tax abatement. Under that graduated agreement, which Sembler hopes to replace with the new proposal, the company pays 5 percent of its property tax the first year, 14.5 percent the second and so on in annually increasing increments until the abatement expires in year 11.

Walker voted for that subsidy on Aug. 12. The second vote, on Oct. 14, was for a related $500 million bond issuance to the company.

An ethics watchdog organization says Walker has a conflict of interest.

“Given the degree to which he received campaign contributions from this particular developer, he should have recused himself from any decision involving them,” said Bill Bozarth, the executive director of Common Cause Georgia.

Bozarth said Walker should step down from one of his official roles because, he said, they conflict. Walker as authority member can divert money from the education budget that Walker the School Board member is supposed to safeguard.

But Walker said he campaigned as an advocate for economic development and that he believes growth will benefit the county’s education budget. He said he was reviewing the numbers in Sembler’s new request, and that “whatever vote I take it will be data driven.”

oh boy!

Anonymous said...

I now like Paul Womack a lot more. He (subtly) calls out Gene Walker publicly in the AJC:

“Let the marketplace take care of it,” said Paul Womack, a School Board member.
The schools and the county are being squeezed by declining tax revenue and shouldn’t have to subsidize the project, he said. “If Sembler goes broke, that’s their problem.”

Too bad no other BOE members has the guts to do the same. I cannot understand why Burrell Ellis doesn't do whatever he can to remove Walker from the DDA.

Cerebration said...

I don't know if Paul is so much "calling Gene out" as he is simply speaking his mind. Although he worked in the government for years (CIA? FBI? Can't remember) - he has been a business leader and CEO for many years. This is really just how business leaders think in general - it should be a free and open market - you succeed or fail on your own.

But Sembler, sensing the new trend in government's intervention in business, is going to ask for a "bail-out". We need to be very careful with this -- there are a whole host of other developers currently having financial troubles as well - we surely can't prop them all up - and this case may set a precedent. (Read that -- lawsuits.)

Open+Transparent said...

I disagree a little bit Cere. Womack had to know his comment runs directly counter to what Walker is espousing. He had to know Walker, the other BOE members, and everyone else would read it in the AJC and Walker would strongly disagree.

Womack isn't going to come out publicly and say Walker 1) clearly has no ethics to vote on Sembler related matters while taking Sembler huge money, and 2) has no business being on both the DDA and BOE. But Womack's public rebuke is clearly a message he doesn't like the Walker/Sembler/two board position disgrace.

Cerebration said...

Well, that does make sense. And those two do have a looooong history.

Gene Walker is just all over DeKalb -- do you all know that he actually put his name in the hat for the CEO race too? Someone once asked how he was appointed to the Development Authority - it was by Vernon Jones Then he tried to run for CEO after Vernon left (likely with Vernon's support) but Ellis won. When it came time for Ellis to endorse another term for Walker on the Dev Auth - he had a tough decision to make. He let it go, likely choosing to not rock that boat even more - but he didn't have a crystal ball. This Walker double-post endorsed with Sembler contributions has become embarrassing for DeKalb -- and I'm certain that SACS finds it interesting.

There is an aside to this -- along the way, "school attorneys" I believe declared that there was nothing illegal for Walker to hold both posts. Technically, I"m sure there isn't. However, now, the Board is having a heated discussion about the school system's legal representation. Walker is vehemently opposed to Lewis' plan - arguing that the counsel should report directly to the superintendent AND the board. Follow that story carefully as it comes up...there's a battle brewing here and the losers are the taxpayers - as we spend far, far too much on legal fees using the current set-up.

Cerebration said...

Jeff Rader has introduced a resolution to oppose the Town Brookhaven request for tax abatement.

Below is the full text of a resolution introduced at the June 9, 2009, Board of Commissioners meeting:

Whereas, the Development Authority of DeKalb County (DADC) is currently considering the award of economic development incentives for the Town Brookhaven development project (the Project) that if implemented would reduce property tax collections in DeKalb County by $52 million over 20 years, and

Whereas, the Project's estimate of those benefits are based substantially on sales taxes collected on consumption that would certainly occur regardless o the Project, with the only benefit to DeKalb being derived from consumption diverted here from outside DeKalb's borders, and

Whereas, the Georgia General Assembly has recently passed legislation requiring the approval of Taxing Authorities, including in this case DeKalb County and the DeKalb County School System, before such incentives may be conferred by DADC, and

Whereas, public budgets dependent on property taxes in DeKalb County are badly strained due to falling property values and State action to change the method of property value assessment.

Now be it therefore resolved, the DeKalb County Board of Commissioners opposes the proposed economic development incentives for the Project at this time, and

The DeKalb County Board of Commissioners resolves to challenge the validation of said incentives approved without its endorsement.

Ella Smith said...

It will be interesting to see what happens.

Anonymous said...

From Mike Jacobs:
The DeKalb Development Authority will meet this Thursday, June 18, at 8:00 a.m. at 150 East Ponce de Leon Avenue, Suite 400, in Downtown Decatur. The meeting time and location isn't posted anywhere on the Internet. You have to call the county to get it.

Hey Gene Walker, if you want to be on both the DDA and BOE, how about at least making sure the DDA meetings are properly advertised and open to the public. Maybe one day the DDA website will actually have info. that should be readily available to the public, like agenda's, meeting minutes, DDA approved projects, board member bio's, etc.

The DDA is a freaking joke.

Anonymous said...

Dr. "Walking Conflict" featured front and center on corruption blog.


Badly needed website
(lets see what other goodies are on this baddie)

Cerebration said...

A suggestion has been made that perhaps Dr Walker has violated item #8 in the Board of Education ethics code list of Conflicts of Interest. Others say that the Development Authority is not an elected office - so it doesn't apply. What do you all think?

In order to avoid conflict of interest, the following guidelines for Board members shall apply:

1. No Board member shall sell supplies or equipment to the Board.

2. The Board may not employ one of its members for any position in the school system.

3. The Board shall not do business with a partnership or corporation partially owned by a Board member.

4. A Board member shall not sell insurance to the Board.

5. School book publishers and their agents are precluded from Board membership.

6. No Board member may have a financial interest in school buses, bus equipment or supplies, provide services for buses owned by the Board, or sell gasoline to the Board from a corporation in which the Board member is a shareholder.

7. No Board member shall serve on the governing body of private educational institutions.

8. No Board member shall hold another county public office.

9. No Board member may be employed by the State Department of Education or serve concurrently as a member of the State Board of Education.

10. The Board may not do business with a bank or financial institution where a Board member is an employee, stock holder, director or officer when such member owns 30 percent or more stock in that institution.

Ella Smith said...

I see it as holding another county position which does cause a great deal of conflict.

Anonymous said...

SACS and "Conflict Walking"

Interesting notion someone put forward that SACs woulod have an interest in "Dr. Walking Conflict".

They probably do have an interest--but not in the way you would think.

SACs is a real estate valuations shill. Nothing determines real estate market mobility trends, depreciation and appreciation more than education reputation (news about audits, etc can be damaging).

SACs picks the winners and losers.

Walker and SACs, two obvious examples where education and real estate are conflated.

Everyone's moving in people.