Editor's note: This article has been edited to correct the amount of Dade's tax forgiveness to RCS, from $31,253 to $25,416.
In an unusual but almost certainly precedent-setting move, the Dade Industrial Development Authority voted Monday to grant an existing rather than prospective local industry exemption from paying school and property taxes. IDA will grant a five-year, $25,416 tax forgiveness to local company Roof Curb Systems in exchange not for coming to Dade but for staying in Dade, and not as incentive to hire employees but as a reward for not laying any off.
The RCS PILOT (payment in lieu of taxes) is a complicated arrangement whereby IDA agrees to become the on-paper owner of some $800,000 of new equipment RCS needs to increase its manufacturing speed and reliability, in order to allow RCS to avoid paying the ad valorem tax on it. RCS will pay no tax on the expansion value in 2020, 10 percent of the amount that would have been due if not for the incentive the next year, 30 percent the next, and so on until the full amount of the tax forgiveness is reached within the five years.
“An incentive like this, it gives us an incentive to kind of feel wanted in the community,” said Clifton Reasor, the RCS vice president who presented the proposed PILOT to the IDA.
“It’s all about growth opportunities,” said Reasor. He said RCS would hire operators to train in use of the new machinery.
“We have assurance from RCS that this is not the kind of equipment that will increase automation,” said William Back, IDA’s executive director, and board member Evan Stone pointed out RCS was not enjoying any other type of IDA incentive. A resolution detailing the deal by Dade County Attorney Robin Rogers requires RCS to maintain at least 20 full-time jobs to keep the tax incentive, and mentions clawbacks in case of RCS not meeting its obligation to invest in the machinery and maintain the 20 employees.
IDA offers prospective new industries free land, complete tax forgiveness for 10 years, job credits and other perks for relocating to Dade. When Vanguard, the tractor trailer manufacturer, agreed to come to Dade in 2015, IDA helped procure the company a $1 million cash grant from the state of Georgia. William Back said industrial park tenants remind him every time he sets foot there of all IDA’s doing or has done for the other companies.
Hence, perhaps, IDA’s desire to reward a valued industry already situated in Dade. But, asked board member Peter Cervelli: “Can we afford to have zero tax in another proposal? I’m talking about with another vendor.”
Member Sharon Moore put it another way: “We get so excited when we get an offer, we want to give away the farm,” she said. “The next person wants the next farm.”
But all members voted for the incentive without demur.
IDA has a similar arrangement to the RCS deal with other Dade industries, owning their buildings and acting as their landlord to enable them to avoid real estate taxes, and in the case of medical tubing manufacturer Integer holding title to its equipment as well.
In other business, the IDA board discussed its budget and heard from Back about his efforts to reconstitute the foundering Dade Chamber of Commerce. There wasn't much news in that department, and neither had Back glad tidings to offer about a new tenant for the virtually brand-new building vacated by Fred's when the discount store chain went belly-up earlier this year. No other big chains would look at it, said Back: "We're just too small a market."
He said a local realtor was listing the Fred's building for $1.3 mil.
