Important now: the local economy is highest priority. Foster stronger relationships with local businesses; the more you know, the more you can help retain and even expand them.
Arising from the visionary seedlings of forward thinkers, Peachtree Corners, Ga., is a city with business innovation at its core. Literally. Located at its center is a 500-acre technology park, named Tech Park Atlanta, where about 8,000 people work, more than 1,000 live and several Fortune 500 companies are located.
In its heyday, the Park, completed in 1968, was a hot spot for tech companies in the Southeast and a ripe landing spot for Georgia Tech graduates. But through the decades, its allure and prestige began to wane and it became an attractive conquest for other cities due to zoning vulnerabilities. It was a fate not to be.
Peachtree Corners incorporated in 2012, solidifying the Park’s permanent home. A revitalization has been well underway ever since, with Curiosity Lab being a key component of that process (see related story).
Although the Park is the centerpiece of the city, other diverse industries sustain a population of 45,000 and pre-coronavirus (COVID-19), provided as many jobs.
In the following interview, Brian Johnson, city manager, talks about the economic impact of the pandemic, how the city has been supporting its businesses and some surprising community efforts.
How are you faring from an economic standpoint during this pandemic?
We are doing well, but we have both extremes. On the one hand, we are blessed in that we are about 45,000 people and also have about 45,000 jobs. A lot of our jobs are tech-related. We are blessed because we have a lot of jobs and people haven’t necessarily lost them because there are companies big enough to weather this.
On the other the hand, we have a large service industry with a lot of retail, restaurants and two conference center hotels; they have been hit hard. A lot of those layoffs are probably temporary, but one of the conference hotels has 450 rooms and they were shut down completely for six weeks.
Can you quantify the revenue impact to the city?
We get about $500,000 to $750,000 every month in sales-tax revenue generated from the city. For the month of April, we were down about $100,000 compared to last April of last year, and about $75,000 down on our monthly average to date in [fiscal year] 2020. It is down but has not ground to a halt.
I understand you don’t assess a property tax so where does the bulk of the city’s revenue come from?
It comes from a combination of things. One, the sales tax we get is very healthy. Of all our revenue streams combined, sales tax is about 20 percent. The other standalone source is our business license revenue. We also have a lodging tax and with as many hotels as we have, that’s another great revenue stream.
Another reason we can do without a property tax is because of the unique service-delivery model we use to provide services throughout the city. When this municipality was created eight years ago, the decision was made to use an outsourced delivery service model. So despite the fact we are a full-service municipality and there are hundreds of people wearing Peachtree Corners uniforms while providing services on behalf of the city (like code enforcement officers, building inspectors, and street maintenance crews), there are only six city employees: myself and five department heads. Everyone else is an employee of a private organization that has a contract with the city or an employee of a public company that has an intergovernmental agreement with the city to provide a specific service – in this case, police and fire.
Where we save is in personnel costs because we don’t have the financial burden of things like unemployment insurance and healthcare. We also don’t own any vehicles, so we don’t have the liability insurance or maintenance costs associated with a vehicle fleet. It’s all built into the contract. We have a lot less overhead.
The contracts have automatic renewals each year if both parties agree. The contracts amount to $5 [million] to $7 million a year.
How will COVID-19 affect the Technology Park and the Curiosity Lab in terms of revenue?
Curiosity Lab is fine because we had an initial one-time investment to install infrastructure. … Everything else are partnerships with companies who put things into the Lab for them to use, but we don’t have to invest anything.
A good example is T-Mobile. They are the official provider of our 5G wireless network. In return, they have an opportunity to meet with all the companies at Curiosity Lab and anybody who uses their 5G network. They also set up their 5G Utilization Laboratory to help companies utilize 5G and provide wireless service in whatever the company’s product is. We also have other companies that have donated technology or expertise.
We may not be making as much money indirectly because there has not been as much active use of the Lab as before the virus. We had lots of people staying in local hotels because they were from out of state or from another country. We had lots of people eating in our restaurants, especially during lunch. That’s not happening now, and we’re not getting as much from lodging and sales tax.
What are the city’s highest priorities when re-emerging from this crisis?
As a municipality, we knew there was only so much we could do because it’s a public health emergency. But there were two rules we could apply. One is to be the provider of information to our residents and make sure everyone knew what was going on, early and accurately. The second thing we needed to do was to make sure we do everything possible to help our local economy.
The city deferred certain monies owed to us from local businesses. In some cases we forgave it, and in other cases we deferred it and said, “We’ll catch you down the road.” Then the mayor and city council reached out to other industries like banks and landlords and said, “We are doing what we can to help our local businesses by deferring monies owed us or deferring payments. Why don’t you join us?” A bunch of banks and property management companies deferred loan or rent payments to help companies through this.
With information from the CARES Act, we also helped businesses get loans for government grants. Moving forward, our priority is the local economy – anything we can do to help people get back out and encourage people to go shopping and spend money. We have a city app that lists every business in the city, their current hours, whether they have dining in or carry out or delivery. We are massaging, cultivating and helping businesses any way we can. We also want to keep the public from being afraid of coming out and spending time at our larger retail or mixed-use developments.
What are some examples of payments you said you deferred or forgave?
Things like the alcohol excise taxes, pouring license fees, business licenses or occupational tax. We temporarily allowed for carry out of things like mixed drinks: Restaurants could serve glasses of wine or unsealed beer as long as it was covered during transport to [the consumer’s] house. It’s hard to say how much it worked but a lot of [restaurants] are hanging on.
What are the most important lessons you have learned during this crisis?
From an economic development standpoint, a business retention and expansion program (BRE) is really important. It’s all about having a relationship with your existing businesses to make sure you retain them and, in some cases, help them expand. If you have a robust BRE program, that means you have points of contact and you know how healthy the businesses are or how much they are struggling. When you have something like a pandemic that affects the local economy like this has, the more you know about the businesses, the more you may be in a position to help them. A lot of them don’t reach out to the city. They don’t even imagine the city would be in a position to help them, but oftentimes, we can.
What I learned is having people do that on a regular basis is more important than you think. You never know what’s going on behind the doors. Any second, they could go out of business or get lured away and relocate somewhere outside of your city. The more you know about them, the better. It’s an important part of our economic development department. There are four legs to the economic development tool: There’s retention and expansion; there’s recruitment, where we go outside our city limits to recruit companies, whether they’re from foreign countries, out of state, or from a city next door. The last leg is business creation. We have a 25,000-square-foot incubator, and that allows us to grow businesses. We have 14 businesses we are incubating that did not exist before we constructed it. I have people whose sole job is to be involved with this, and it has paid dividends.
What are you most proud of about your city as you begin to emerge out of COVID-19?
All of our community getting together to try to protect the things we have here. For instance, we have a Mexican restaurant and the owner implemented a pay-what-you-can program when the shelter-in-place first started. You would order your food and when you went to go pick it up, the owner didn’t make you pay. It really caught on and the local community thought it was awesome. Some people who were in a good position would pay more and ordered takeout even though they wouldn’t normally, just to support this guy. It ended up being an innovative way to do things, and it caught fire.
The community didn’t need to be driven by the city. We did some things to help, but the community really drove the effort and it was great to see that government really didn’t have to get involved. In some cases, government really needs to get out of the way of local innovation.
For more information contact Judy Putnam at: firstname.lastname@example.org