The Development Authority of Cobb County on Tuesday agreed to give Lockheed Martin up to an estimated $77 million in tax breaks over the next 26 years, in the largest agreement the authority has ever approved.
Lockheed Martin requested tax breaks in July to make the company a competitive bidder for future federal defense contracts, company leaders said. They expect to spend up to $1.6 billion on expansion projects dependent on winning bids, and estimate between 500 and 3,000 new jobs could come to Cobb County if they win the federal contracts.
Most of the company’s investments will be in advanced manufacturing equipment to develop “the next generation fighter aircraft,” Rod McClean, a Lockheed Martin executive based in Marietta, said at the July meeting.
“This type of technology and products and investments are required to allow us to make the investments in the facilities to allow us to compete more affordably,” he added.
The authority approved the final bond resolution 5-1 with Kennesaw State University economics professor J.C. Bradbury opposed. The deal is expected to close in October.
Cobb will be giving the company a break on property taxes paid to the county government and the school system, but the county expects to profit in the future. Lockheed Martin’s expansions are expected to bring an estimated net benefit of about $50 million each to Cobb County and the Cobb County School System, according to the fiscal impact study conducted by the Center for Economic Development Research at Georgia Tech.
When the development authority provides tax breaks, companies are required to make payments in lieu of taxes to prevent the county from losing the revenue it currently receives. Abatements usually last 10 years, giving the company relief during construction while taxes increase gradually.
Under the agreement, the tax breaks would be awarded project by project through 2048, for 10-year periods if Lockheed Martin’s expansion proceeds as planned. For instance, a project approved in 2023 would get tax breaks through 2033.
The development authority considered adjusting its fee schedule by capping fees on projects over $1 billion, which Lockheed Martin requested, Nelson Geter said at the meeting. The members approved the deal with the company but suspended the fee schedule until they decide whether to offer additional breaks on fees, which typically go toward the development authority’s expenses. The authority will decide on a fee structure before the deal closes this fall.
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