Members of the Development Authority of Cartersville (DAC) voted unanimously Monday to approve a memorandum of understanding (MOU) agreement with Anheuser-Busch, LLC, potentially paving the way for a major expansion project at the local brewery.
DAC legal counsel Keith Lovell said the proposed expansion revolves around the international manufacturer’s craft beer business, with the company requesting up to $100 million in revenue bonds from the authority to pay for acquisition, construction and equipment costs associated with the project.
According to the MOU document, the “community investment goal” of the project is $85 million.
“They are being offered a standard tax abatement, like most businesses are that invest that much into the community, on a sliding scale,” Lovell said. “They are paying the full authority’s issuance fee … the City’s fully aware of the project and supports it, as does the commissioner.”
The MOU document includes a payment in lieu of taxes (PILOT) adjustment schedule, indicating the expansion project would receive a 10-year abatement on building-related real property taxes and one group of machinery and equipment-related personal property taxes. The company would receive a five-year abatement on a second group of machinery and equipment-related personal property taxes under the agreement.
“The first three years they are front-loading their taxes, so they’re not paying any with respect to the general ad valorem taxes on the building or the equipment,” Lovell said. “Years four through 10, they’re paying the prorated amount of that … so it’s the same amount of taxes, they’re just being paid in a different schedule.”
Lovell said the abatements, however, would have no impact on the collection of school taxes.
“Although the development authority will bill both the general ad valorem taxes and the school ad valorem taxes, there is no abatement on the school ad valorem taxes,” he said. “When we receive the money annually from Anheuser-Busch, we will forward the school payment — which is at 100% of whatever they’re going to be taxed — to the school system every year.”
“The partnership between the brewery, the City of Cartersville and Bartow County has been phenomenal for 30 years,” said local plant manager Kevin Fahrenkrog at Monday's DAC meeting at the Clarence Brown Conference Center. “We’re committed to make it another 30 years, and it’s been helpful that you support existing businesses to allow us to grow.”
Cartersville Mayor Matt Santini, who also attended Monday's DAC meeting, said having a globally-recognized brand like Anheuser-Busch has long been one of the City's greatest economic laurels.
“We’ve got a great, broad base of diverse industry, but it kind of goes back to that crown jewel, in my mind, that is Anheuser-Busch,” he continued. “For their longevity, for their continuous commitment to our community, in philanthropic endeavors and supporting what we have going on in the community.”
Georgia Department of Economic Development Commissioner Pat Wilson echoed many of those same sentiments in the press release from earlier this week.
“Anheuser-Busch is a source of pride in Georgia’s advanced manufacturing lineup, and this Cartersville plant expansion will allow continued competitiveness within the beer industry,” he is quoted. “We appreciate Anheuser-Busch’s continued investments in Georgia and dedication to the community. Our economic development partners deserve tremendous credit for supporting our existing industries and helping position them for continued success.”
Under the MOU, the authority holds the title to the project.
“It is understood and agreed that the bonds may be structured as draw-down bonds which would anticipate that subsequent to the issuance of the bonds, the company may acquire and install portions of the project and transfer the title to the same to the authority,” the document reads, “in which case the principal amount of the bonds shall increase.”
If Anheuser-Busch does not meet at least 80% of its investment goal, the MOU agreement states “the company shall forego all or a portion of the property tax savings otherwise offered to the company in this agreement.” Among other criteria, all rent payments made by the company under capital or operating leases over the rental term — or 15 years, whichever is shorter — “shall be aggregated and included in the calculation of investments for purposes of determining the amount.”
Per the document, the rental agreement is set to expire on “the 31st day of December, immediately preceding the 10th anniversary or the first day of January following the date the acquisition, construction and equipping of the project has been completed and is available to be used by the company for commercial use or upon earlier termination.”
Bartow County Commissioner Steve Taylor approved the MOU — a four-way agreement between Anheuser-Busch, the City of Cartersville, Bartow County and the Bartow County Board of Assessors — at a special-called public hearing on Tuesday.
The Cartersville City Council is scheduled to hear the item at Thursday evening’s public meeting, set for 7 p.m. at 10 North Public Square.