Saturday, June 25, 2016

Oconee County Economic Development Director Did Favorable Analysis Of Dealership Rezone After Planning Commission Negative Vote

Not Available To Public

Three weeks after the Oconee County Planning Commission voted against a proposed rezone on SR 316 for auto dealerships, county Economic Development Director J.R. Charles sent members of the Board of Commissioners an “Economic Impact Analysis” that said the project would benefit the county.

Charles also sent the report to Jon Williams, president of Williams and Associates, who was representing those asking for the rezone, saying “Thought you would like to have it in your back pocket if you have to speak at the Commission meeting.”

Charles also copied the message to the members of the county’s Industrial Development Authority, one of whom spoke on behalf of the rezone at the Board of Commissioners meeting on June 14.

The document was not placed in the rezone file at the Oconee County Planning Department or put on the county’s web site, which would have made it available for analysis by those who were opposed to the rezone and spoke against it at the BOC hearing on June 14.

The Board of Commissioners, in a 2-1 vote, approved the rezone request for the nearly 30 acres on SR 316 at Virgil Langford Road, reversing the 5-3 vote by the Planning Commission against the rezone.

Williams Used Document

Williams made use of the document produced by Charles in the closing comments Williams made to the Board of Commissioners before that 2-1 vote on June 14.

“I think you received an economic impact analysis of the project from your economic development director,” Williams said, as the video below shows.

OCO: Williams On Economics from Lee Becker on Vimeo

Williams went on to summarize some of a key arguments of Charles’ report, including that, even if only the proposed Mercedes-Benz dealership moved to the site, the county would get property taxes of “$132,921.60, a net increase of $130,707.60 per year” over the current property tax payments.

Williams also used estimates from Charles’ analysis that the county would get $120,000 in sales taxes on parts sold in the service department of the Mercedes-Benz dealership and that the dealership would create 30 new positions when it moves to the county from Athens-Clarke County.

All three of those estimates used by Charles in his report came not from an independent analysis but rather from a phone conversation Charles had with Shaun Fagrell, general manager/partner of Mercedes-Benz of Athens, Williams' client.

I learned this from documents I received from the county through an open records request.

Nature Of Estimates

Fagrell told Charles that the “anticipated acquisition and development costs” for the Mercedes-Benz dealership would be $14 million, according to notes Charles reported he took in a telephone conversation with Fagrell. He did not report the date of the conversation.

Fagrell said he currently has 45 employees and that “anticipated new jobs” would be 30.

Fagrell told Charles that the county should expect 5,000 “Service Calls@ $800 per visit= $4 million x (Local Tax Rate@ 3%) = $120,000 in aggregate local tax collection.”

Only parts are taxed, and not service, and Charles accepted the estimate that each visit, on average, included an $800 parts charge.

Charles also indicated in his notes that he relied on figures provided him by Williams on 2014 sales, job counts and inventory in producing his report. Williams told Charles he got those figures from Fagrell.

Charles sent the report to Fagrell “for fact checking” before he distributed it to the members of the Board of Commissioners and the Industrial Development Authority.

Property Values

The current value of the three properties that make up the core of the rezoned 30 acres are currently assessed at $648,682, according to county tax records.

Two of those three properties are in conservation easements, meaning they are paying less than assessed value in taxes.

The project also incorporates a part of a fourth piece of property, which is not independently assessed.

Fagrell told Charles that the county currently is receiving $2,214 in taxes on the property, and Charles used that figure in his report.

$14 Million Estimate

Charles reported that TT of Athens, or the Mercedes-Benz dealership, expects to pay $3.5 million for the property and make $11 million in improvements.

If the Oconee County Property Appraisal Department “values the land and improvements for $14 million, the annual tax bill on the acreage of interest would be $132,921.60, a net increase of $130,707.60 per year,” Charles reported.

The figure of $132,921.60 matches the figure from the tax estimator on the Oconee County web site for a property valued at $14 million.

The 6.1-acre site of Mercedes-Benz of Athens at 4735 Atlanta Highway is assessed at just less than $3.99 million, but that site also contains a Nissan dealership. The property is owned by TT of Bogart.

Growth Projection

Neither Fagrell nor Charles explained what kinds of investments are reflected in the $10 million in improvements that, combined with the property, would lead to the $14 million in value.

Fagrell told Williams in a memo on July 15, 2015, that “Our proposed move and expansion is in reaction to the information that Mercedes-Benz USA just recently shared with us at our 2015 National Dealer Meeting.

“Our five year growth plan is nearly 40% in New Passenger Cars and 300% in New Commercial Vehicles. We are looking forward to the growth and a new home that will accommodate this growth.”

TT of Atlanta owns Athens Ford, 4260 Atlanta Highway, which sits on 10 acres and is assessed at $4.99 million, according to Athens-Clarke County tax records.

TT of Atlanta and TT of Bogart are part of the largest privately-held dealership group in the U.S., Automotive Management Services Inc., owned by Terry Taylor of West Palm Beach, Fla. The TT of Bogart and TT of Atlanta share that home address in the tax records.

Nature Of Request

Charles sent his report to Jeff Benko, Oconee County administrative officer, to whom Charles reports in the county’s chain of command, via an email message on the afternoon of June 3.

Benko’s office is next door to Oconee County Board of Commissioners Chairman Melvin Davis.

Charles said “Please find the attached Economic Impact Analysis on the Proposed Rezone of the Crane Property (i.e. the Mercedes Benz development.)”

He copied Davis, the three voting members of the Commission, and the members of the IDA in that email.

Unusual Request

It is very unusual for Benko to ask for an economic impact report on a rezone request, or at least for such a report to become public.

The analysis that Charles undertook made estimates of revenues received, but it did not provide any estimates of the costs incurred by the county.

This was true even though the report of the county’s Planning Department staff stated that the project makes demands on county services.

“The relative benefit to the public by maintaining the current A-1 zoning on the property includes less demand for County services and utilities, and less demand for additional road maintenance,” that report stated.

High Profile Case

The three commissioners said they met with Williams to discuss the rezone before it came before the Planning Commission and then the Board of Commissioners itself for public hearings.

Matt Elder, owner of Oconee Waste Transport and a member of the Industrial Development Authority, spoke in favor of the rezone at the hearing before the Board of Commissioners, as is shown in the video below.

OCO: Elder On Rezone from Lee Becker on Vimeo

Members of the IDA are appointed by the Board of Commissioners.

At the June 16 meeting, Commissioners Jim Luke and William “Bubber” Wilkes voted for the rezone, and Commissioner Mark Saxon voted against it.

Neighbors complained about traffic, noise and light pollution, and the general negative impact of the commercial development on surrounding residential neighborhoods at both the Planning Commission and BOC hearings.

Rezone Background

The rezone request was from Elaine Duckett Crane of Mineral Bluff in north Georgia, who asked to change the three parcels totaling 30 acres on the south side of SR 316 just west of Virgil Langford Road from agricultural and residential use to business use.

Crane was joined in the request by Lela Mae Moore Slaton, who owns just less than 3 acres at 1050 Jimmy Daniell Road.

Slaton, according to the rezone narrative, had agreed to sell part of her acreage to the future developers of the auto dealership complex to give the project access to Jimmy Daniell Road. Another access point will be on Virgil Langford Road itself.

According to the narrative, four lots within the development will be for sale to individual new car dealerships or others interested in related businesses.

Mercedes-Benz of Athens was identified at the Planning Commission meeting on May 16 as the planned occupant of the first lot in the complex to be developed. Williams was representing Crane, Slaton and Mercedes-Benz of Athens.

The total value of the project was listed as $40 million in the rezone narrative, though no explanation of that figure was given.


darcymarcy said...

more clandestine workings of the oconee boc and developers. apathetic citizens at the polls perpetuate the corruption in our local government.

rightway1974 said...

The economic director is funded by tax payer dollars. He should not be doing work for a private interest. This needs to be looked into. I don't see how that can be legal or acceptable use of tax dollars.

Anonymous said...

In an ethical government, Economic Development Director J.R. Charles would be made to resign, but in Oconee (and remember this is all Republican, all the time) under the leadership of Melvin Davis, this will pass by without a peep from county residents or the Oconee Enterprise or Oconee Leader.

1) Elaine Duckett Crane of Mineral Bluff in north Georgia and Lela Mae Moore Slaton are sellouts, plain and simple. Thanks for putting the nail in the coffin for Oconee as a place for farms and open land.

2) J.R. Charles...not sure how you can sleep at night. Professional ethics are important, just not here in Oconee.

3) Bubber votes exactly how Melvin tells him to. If anyone thinks Melvin did know all of these detail and approve of the dealerships, you are living in a fantasy world.

4) Bubber is useless as a county commissioner. Jim Luke is burned out.

Those two people allowed for up to five car dealerships to be built, changing the face of the county and ruining traffic at Mars Hill and Virgil Langford.

The Planning Commission votes "No", but a devious JR Charles, Jeff Benko and Melvin Davis allow unverified information to be put forward, and two commissioners, one burned out, and on who brings no value to the position, vote to change the county forever.

It's a sad state of affairs, but its what county residents deserve for voting in these commissioners.

Rosemary Woodel said...

Excellent investigative reporting. Thank you so much.

Lee Becker said...

This is a modified version of a submitted comment.

Agree completely. (A)llowing the applicant to dictate the economic impact report with no consideration of costs - ridiculous! Wish there was something we could do.

Mike Streetman said...

To anom 8:31 PM
Don't blame Elaine Duckett Crane for selling her farm. The subdivisons that were built around them put them out of the chicken business several years ago. Even with the Conservation program and the benefit of reduced taxes you still have to earn a living to pay to keep the land and at some point you just get to where you can't physically take care of it.
Maybe if you have enough money to buy up the farm land then you can keep Oconee rural.
I have a small farm and struggle to keep it and I hope my kids will keep the land when I no longer can, but if not maybe someone else that has the money will.
I too hate to see the uncontrolled growth that has taken place but don't blame people for selling their land. Blame others for the direction we have gone.

Anonymous said...

Seems perfectly reasonable that an economic development director would write an economic report on a major development, so I don't see a problem with that. My big queation: why isn't an impact report required for any large project? This should be be a standard report given with any rezone request. If the Planning Commission had this kind of information when making its decision, it would paint a more complete picture.

rightway1974 said...

The economic director gave his plan to Williams. That plan was paid for with tax payer funds. Williams used the plan to further his business. I don't see how this can be legal.