Rep. Allen Peake (R-Macon) presented HB 128, the Georgia Downtown Renaissance Act,
to the House Ways and Means Income Tax Subcommittee on Wednesday, February 13. The act is designed to encourage downtown investments in commercial and residential property through state income tax credits.
Pam Sessions, Founder & Co-Owner of Hedgewood Properties, Inc., spoke in support of the Georgia Downtown Renaissance Act on February 13, 2013.
The three related state income tax credits in HB 128 are the following:
- $20 million per year in statewide tax incentives ranging from 10% to 25% for investments in new construction or renovation of existing buildings within clearly defined downtown boundaries called Renaissance Districts.
- $5 million per year in statewide tax incentives for the purchase and/or significant improvements of downtown housing within Renaissance Districts.
- $5 million per year in statewide tax incentives for individual or corporate contributions to the Georgia Renaissance Fund. Proceeds of the fund would be used for low-interest subordinated loans to businesses making investments and creating jobs within Renaissance Districts.
“Healthy environments downtown are crucial to our future and providing tax incentives to invest in our downtowns is just good business sense,” Peake said.
City officials and downtown developers were also on hand to support the bill.
“Cities are looking for partnerships of all types,” said Norcross Mayor Bucky Johnson who also chairs the Metro Atlanta Mayors Association, an affiliate of the Georgia Municipal Association. “This act would, in many ways, give us tools to help develop our downtowns.”
Former Decatur Mayor Bill Floyd, now a consultant to local governments, said while Decatur is fortunate to have a vibrant downtown, it took the city 20 years to get there.
“We have struggled with banks and getting people to invest in our downtown,” he said, adding that as a past president of the Georgia Municipal Association he had the opportunity to travel to cities across the state and visit downtowns.
“I can’t over emphasize the importance of cities having a vibrant, active downtown,” Floyd said. “Tools like tax credits help downtown property owners give local small business owners a better rental rate and in turn, the small business owners have an opportunity to thrive downtown.”
Rome developer Ira Levy has invested more than $25 million in downtown Rome and said tax credits would help him invest even more.
“I firmly believe that downtowns are the heart of the community,” he said. “If a building remains run-down and empty, the taxes will always be low and the property will not be a benefit to the community.”
Levy noted that his downtown development efforts have created jobs, preserved historic buildings and attracted money-spending tourists.
“With the passing of the Georgia Renaissance Act, stalled downtown projects will get a new life and it will encourage other investors to take on the task of restorations.”
Restaurateur Casey Smith said he used the Georgia Cities Foundation’s low-interest loan program to expand his downtown Newnan restaurant. “I went from six employees to 25 and with the increase in business I was able to open another restaurant in downtown Senoia,” he said. “Tools like tax credits and low-interest loans help incentivize property owners to make more downtown investments.”
Developer Pam Sessions, CEO of Hedgewood Properties, has developed residential and commercial properties in several downtowns in Georgia and agreed the Renaissance Act would incentivize more downtown development.
“It is not easy to build or rebuild a downtown and yet from my perspective downtowns are the brand of our state,” she said. “The cities of Georgia are magnets for economic development.”
Sessions noted that there is pent up demand for developments that enable people to walk to work and socialize and enjoy recreation close to home.
“On so many levels these downtown developments meet that demand,” she said, noting developers want to meet the demand but there is incredible risk to do so and they can’t do it alone.
“Downtown development takes many partnerships,” she said. “There needs to be incentives to bring about this good work. As developers we want a level playing field where it is as easy to develop downtowns as it is to develop greenfields.”
The Georgia Chamber of Commerce and the Georgia Association of Realtors also voiced support for the bill.
The House will continue to review the bill and will likely hold another hearing on it.