With a jam-packed September agenda, Savannah Economic Development Authority chairman-elect Bob James and president Trip Tollison wasted no time setting upcoming priorities for SEDA and the World Trade Center Savannah Tuesday.
The authority board voted on a dozen action items, then adjourned into executive session to discuss real estate issues.
Four critical resolutions — each discussed at length at SEDA’s two-day board retreat in August — passed easily. They pledged support for the extension of the special local option sales tax, backed the repeal of the county’s energy excise tax and supported the extension of the Freeport Exemption for manufacturing to both Savannah and Pooler.
If the SPLOST extension passes, SEDA will receive between $15 million and $30 million — depending upon how much is raised — to acquire, develop and permit a new industrial park.
“If we are to attract investment and create jobs, we have to look at acquiring land,” Tollison told the board at its retreat, adding that Crossroads Business Park is near capacity and SEDA has fewer than 140 acres of land available for development.
“When you compare that with other economic development authorities around the state — for example, Dublin/Laurens County has 3,500 acres available, Augusta/Richmond County has 1,800 and Brunswick/Glynn County has more than 1,000 acres — it puts us at a real competitive disadvantage.”
As does Chatham County’s energy excise tax, Tollison said, which came about after the Georgia General Assembly in 2012 approved a bill to eliminate the sales tax on energy used in manufacturing and agriculture. As an offset for that lost revenue, the legislature authorized local governments to adopt an excise tax on energy consumption.
In cooperation with local municipalities, Chatham County adopted such a tax, which became effective in July.
The problem, according to SEDA consultant Pat Monihan, is that few other counties in Georgia have followed suit.
“Additionally, neither South Carolina nor Florida place an energy tax on manufacturers, which poses a recruiting problem for SEDA,” Monihan told the board at its retreat.
He suggested SEDA approach the county and municipalities to ask that the tax be repealed.
“Because it’s a phased-in tax, it will be easier to do now rather than later,” Tollison said.
Taxing inventory
Perhaps the most complicated — and significant — resolution passed Tuesday involves extending the Freeport Exemption to the cities of Savannah and Pooler.
Many Georgia counties, including unincorporated Chatham, already exempt from property taxes up to 100 percent of a company’s qualified inventory — including raw material, work-in-process and finished goods destined to be shipped out of state.
The cities of Savannah and Pooler do not, creating a disadvantage for companies located within their boundaries.
“Last year, we paid $100,000 in this tax,” said board member Ken Bianco, an executive with JCB in Pooler. “That’s $100,000 we could have spent on jobs or training.”
Board member Steve Green agreed.
“Had the city of Savannah not agreed to de-annex portions of the airport property, we could not have kept the Gulfstream expansion here,” he said. “They would have had to take hundreds of millions of dollars in capital investment and more than 1,000 jobs somewhere else.”
James, who was filling in for SEDA chairman David Paddison, said the inventory tax is something that has to change.
“This area has so much to offer, but this tax leaves us at a real disadvantage,” he said.
Tollison acknowledged it won’t be an easy fix.
“We first have to have the blessing of Savannah and Pooler, and we’re talking billions of dollars in inventory,” he said. “It’s not something we could expect them to bite off in one year. And we have to help them find a way to fill the hole an exemption would create.”
If one or both cities agree, the legislature has to put it on the ballot for voters to decide, he said.
Creating jobs, revenue
In other business, the board agreed to a World Trade Center Savannah request to pursue the feasibility of WTC creating an Employment Based 5th Preference Regional Center.
The EB-5 program is an investment tool that allows “approved regional centers” to leverage funds from foreign investors for economic development projects.
While the money the foreign investor puts up is “100-percent at risk” and not guaranteed, the investor gets a path to U.S. citizenship in exchange for investment that creates and sustains a minimum number of jobs.
The program is administered by the United States Citizenship and Immigration Service and authorized every three years by the U.S. Senate. The last reauthorization was approved in July 2012.
“We have had a team working for the past three months to understand the risks, benefits and process for establishing an EB-5 Regional Center as a primary component of the World Trade Center Savannah,” said WTC chairman and SEDA board member Eric Johnson.
While the primary purpose is job creation, an added bonus would be the administrative fees the regional center collects for pairing qualified foreign investors with area projects, he said.
“We have done our due diligence on this, much like we did when establishing a World Trade Center here,” he told the board Tuesday.
“We feel this is an opportunity to generate a significant amount of revenue for SEDA.”