BUFORD - Word a Duluth company is relocating, bringing with it 500 jobs, is not being celebrated in Buford, the city it will soon call home.
The city's commission Chairman Phillip Beard Wednesday said the city should have been involved in the decision-making process to award Uline, a packaging materials and janitorial supply company, tax incentives to set up shop in Buford.
Beard is upset Gwinnett County made an $800,000 tax abatement deal with Uline that will, for the next eight years, lessen the number of tax dollars that will flow into Buford's school system. The city's lawyers are exploring litigation, Beard said.
"Who does the county think they are to come in here and make decisions for the city of Buford?" Beard asked. "They left us out of all negotiations. We are trying to get a legal opinion on what we can actually do."
The statement came one day after Uline celebrated its upcoming move from two Duluth buildings to one 500,000-square-foot new facility in Buford. Company officials said the move allows them to add 500 jobs within 10 years to its 245-employee base in Gwinnett.
Illinois-based Uline initially considered a move from Gwinnett to Jackson County or the Orlando, Fla., area, but the abatement offered, combined with the company's desire to retain its trained employees, encouraged it to stay, manager Travis Szwast said.
Under the terms of the agreement, Uline will pay no taxes to Buford city schools or to Gwinnett County government its first year in Buford. The company will pay 1/8 of its allotted taxes to those entities in the second year, 1/4 for the third year and will add 1/8 to its tax payment each year until the ninth year, when Uline will pay full taxes.
Buford has no property tax, only a school tax.
"Starting a fight with the county is not my intent, but they've put us in a bad place," Beard said. "This company is strong enough to pay its way without taking off of a small school district."
Buford city officials don't know yet what effect the program will have on the school system, Beard said.
Gwinnett County has the right to make that deal because Georgia counties have done so for 30 years under an industrial bond authority program, said Nick Masino, vice president of economic development, Gwinnett Chamber of Commerce.
"When a government entity owns a piece of property, they don't pay taxes," Masino said. "A Georgia government can't tell a company they don't have to pay taxes, because that's against the law. Thirty years ago, a structure was created that allows a government to take over the lease or ownership of the property. That's how we are able to not charge them taxes. The Industrial Bond Authority of Gwinnett County holds the title to the Uline property, then in eight years releases it as a quick claim deed. These economic deals have been going on for 30 years. Buford doesn't have a legal leg to stand on."
Masino estimates that Buford City Schools will lose about two-thirds of the $800,000 abatement.
Uline contributes its share to the community, said Frank Unick, Uline's chief financial officer.
"Uline will be providing a significant volume of jobs for Buford area residents," Unick said. "Uline also collects and remits a high volume of sales tax proceeds that will provide enormous benefits to the area, and we will be remitting a substantial amount of property taxes to the community going forward. It is a competitive landscape, and Buford has attracted a valued employer that provides many high-paying jobs and provides funding to the area, via sales, income and property taxes, that previously did not exist."
Buford has done just fine growing a tax base prior to Uline's entrance into the town, Beard said.
"Buford has been growing at a super rate and not under a tax-free status or give aways," Beard said. "We are not an economically depressed area that needs help, and it's not fair to the ones (businesses) that are here and paying taxes. We got over 1,000 businesses in our little city and here we got one now not paying any taxes."
The long-term benefits of Uline's economical contributions will outweigh any initial discomfort, Masino said.
"They are searching really hard to find a negative in a positive thing," Masino said. "If the company had moved to Jackson or Orlando, we would have all lost."
Calls to Buford city attorney Gregory Jay and its city manager Bryan Kerlin were not returned.