An Economic Incentives Ordinance in Cobb County, Georgia, Bears Fruit in a Big Way

By Moon, J. Virgil; Majors, Tom | Government Finance Review, June 1994 | Go to article overview

An Economic Incentives Ordinance in Cobb County, Georgia, Bears Fruit in a Big Way


Moon, J. Virgil, Majors, Tom, Government Finance Review


A publicly adopted incentives policy that requires a cost-benefit analysis prior to offering incentives has garnered strong support from citizens as well as businesses.

The Wall Street Journal called Cobb County, Georgia, "the hottest small business boom area in the country." Despite its acknowledged status as a business cradle and home to leading-edge firms, Cobb County has not taken its leadership position for granted. While the national economy suffered a downturn in recent years, Cobb County continued to be a mecca for business relocations. One of the nation's fastest-growing counties throughout the 1980s, the county still posts some impressive numbers. Among the most recent accomplishments checked off by local economic developers:

* $48 million convention center completed;

* 200 international companies located operations in Cobb County over the past decade;

* 303 percent increase in economic activity over the previous year;

* $136 million in new capital investment;

* 61 major construction projects, up from 39 one year earlier; and

* $402 million in total economic activity.

To meet competitive challenges posed by other areas, chamber, county and municipal leaders formed the Cobb Economic Coalition in October 1991, a collaborative effort on the part of government and business to promote positive economic growth. The coalition jointly commissioned a highly recognized business relocation firm to conduct a study of the county's strengths and weaknesses and to provide the county with a strategy to attract more businesses and do a better job of keeping those already in the county. This study, now serving as a blueprint for local leaders working to strengthen the county's competitive position, recommended that the county devise an incentive plan to attract more business to the county. It also identified those industries and businesses that would find locating in Cobb County a distinct advantage.

Attracting New Businesses

The new incentives ordinance, adopted in August 1993, established a mechanism for attracting new businesses to certain parts of the county through the negotiation or outright waiving of business licenses, building permits, water system development fees and other usual requirements. Depending on the number of employees in a prospective company, the impact could be as much as $50,000. In order to be eligible for incentives, prospective companies must offer at least 25 new jobs and an annual economic impact on the county of at least $500,000.

The mechanism involved the establishment of an Office of Economic Development. Working with an advisory committee of representatives of the Cobb Municipal Association, Cobb Chamber of Commerce and appointees of the five county commissioners, this office defines areas of the county where certain incentives are used to attract particular kinds of business and recommends the incentives to be offered a company relocating to the designated areas. The package includes incentives for both new development and special incentives for redevelopment of abandoned sites, recommendations defining eligibility criteria and duration of incentives, and determinations of eligible industries and particular areas of the county to be designated for offering the incentives. The overall criterion is that the incentives be paid back within a three- to five-year period. The offer then is made by the county manager and the chairman of the board of commissioners. Exhibit 1 displays characteristics of the various types of incentives.

Before the process to develop the ordinance could begin, a number of key elements had to be in place. First, attitudes had to be favorable to the proposition of the private and public sectors working together to achieve goals. These attitudes included a political leadership that was willing to be entrepreneurial and to take risks. Secondly, the county had to be ready to create and promote an image in order to sell itself as a product. …

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An Economic Incentives Ordinance in Cobb County, Georgia, Bears Fruit in a Big Way
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