On the record: Which entities pay — and don’t pay — Chatham County property taxes

From a Savannah movie backlot and old downtown mansions to private jet manufacturing facilities and 1,300-plus acres of land for mega-warehouses, there are hundreds of parcels of privately-controlled land in Chatham County whose owners pay reduced property taxes — or none at all. 

Under state law, real estate owned by cities and counties, public schools, charities and nonprofits are generally exempt from property taxes. Additionally, some businesses in Georgia also are granted property tax relief by business-friendly public agencies.

And Georgia law is clear that nonprofit educational institutions are generally exempt, too. 

In Chatham County, which is undergoing a development boom, the value of property taken off the tax rolls is adding up. 

In a three-month investigation of county tax assessments and property records to chart the amount of tax benefits to property owners in the county, The Current found: 

• The Savannah College of Art and Design paid approximately $171,000 in property taxes in 2023 for the commercial businesses operating on properties that are part of the nonprofit institution’s $458 million property portfolio. Of its 106 parcels of land, 85% have no property tax bill.
• Gulfstream, Tanger Outlet, the owners of more than 1,300 acres of warehouse land and other corporations saved $33.1 million in property taxes in 2022 because the properties are legally held by the Savannah Economic Development Authority, a public business-promotion agency. SEDA doesn’t pay property taxes because it’s a public body. 

These SCAD and SEDA exemptions represent less than 1% of local public agencies’ annual budgets. But the millions of dollars of property that is not taxed means public money has to be raised elsewhere — or the county, its cities and schools must do without it. 

According to county, city and school millage rates, a commercial building valued at $1 million in Savannah typically would pay about $16,500 in property taxes. About $7,050 of that would go to K-12 public schools. 

That means the Savannah-Chatham County Public School System misses out on approximately $16.6 million from the SEDA tax abatements, an amount equal to the salaries of more than 160 of the most experienced and credentialed public school teachers. 

SCAD’s tax bill equals less than 20% of the cost of a $1.4 million state-of-the art fire truck just purchased for Savannah Fire Rescue. That equipment is necessary to protect tall buildings like  SCAD’s new 17-story dorm by the Savannah River Bridge.

Below is more detail of how Georgia laws passed in the spirit of public benefit impact the public purse.

What SCAD owns and what’s exempt from property taxes

One of Savannah’s biggest property owners has changed the city’s skyline. SCAD’s River dorm soars over most of the structures in the downtown historic district. 

SCAD’s property portfolio similarly dwarfs the value of land controlled by most tax-exempt entities in Savannah and surrounding Chatham County. 

According to fair market values assigned by the Chatham County Board of Assessors as of Jan. 1, 2022, and analyzed by The Current, SCAD’s holdings are worth more than properties owned by the county, or the Savannah Housing Authority, or all the parcels owned by state universities in Chatham combined.  

SCAD’s portfolio is worth more than half of the combined value of all real estate used as houses of worship in Chatham, which are also exempt from property taxes.

SCAD has spent millions of dollars renovating historic structures since its founding in 1979. Its staff and its students — who pay $40,000 per academic year for tuition, excluding room and board — bring both consumers spending power and style to the Hostess City. Savannah wouldn’t be what it is without the institution.

But SCAD’s student body, now consisting of more than 12,000 undergraduates, draws on public services in a way it didn’t in its early years. Tall buildings require more expensive fire-fighting equipment than those which fit into the historic contours of downtown.  The streets and public parks that make downtown Savannah so attractive require maintenance, but SCAD doesn’t help pay.  There’s also the dilemma of gentrification: SCAD has put a lot of money into its private Savannah, but not the public parts.  

State laws, however, haven’t changed to reflect the changing realities in Savannah and Chatham. That means that an institution whose president ranks among the highest-salaried of all private college leaders in America pays roughly the same amount of property taxes as a small, local business.

Here are examples of SCAD’s tax-exempt portfolio:

SCAD owns 13 tax-exempt properties worth more than $10 million each.  Most are plots with multiple buildings which include some of the school’s biggest residence halls. It also includes the school’s film studio

SCAD owns 42 tax-exempt properties valued from $1 million to $10 million. This includes many historic buildings

SCAD owns 41 properties valued at less than $1 million.  This includes relatively small buildings and some vacant land, such as tiny parcels assembled for parking

But SCAD is a school that, at times, operates  like a developer, according to senior city officials. It also provides city-like services functions for its own community, such as its own police force. Its fleet of buses buzz through city streets to pick up and deliver its students from dorms that rent for up to $17,000 per academic year to classrooms, even as the public school system rations bus service. 

It has also adopted a sophisticated view of its educational mission. While SCAD students use the school’s Hollywood backlot on Louisville Road, it is also available to industry, as long as students are involved in the production. (Film production companies themselves are eligible in Georgia for some of the most lucrative state tax exemptions in the country, a status that the state legislature may review in 2024.)

Other cities in America with similarly resourced private, nonprofit colleges have decided that kind of disparity is not acceptable. Places like Providence, where the Rhode Island School of Design is based, and Boston, where Harvard University owns property, have reached agreement with these institutions to pay the municipal coffers funds in lieu of taxes.

SCAD declined to make any official available to interview for this story, nor did it answer a written request to comment on the accuracy of The Current’s analysis of 2023 tax records. In a written statement it confirmed that it owns about 2% of the city’s tax-exempt properties, as of the 2022 tax year. 

In its statement, SCAD repeated its long-held position that in its 45-year history, the school “has contributed vastly to the revitalization of Savannah’s economy, cultural identity and desirability as a home for its residents and a destination for guests.”

Elevating pressure

Savannah Mayor Van Johnson recognizes the imbalance between SCAD’s nonprofit status and its growing use of public services. But it’s unclear how — or whether — he’s willing to lead efforts to change the present state of affairs. 

At a Nov. 28 meeting of the Savannah Downtown Neighborhood Association, Johnson praised SCAD, saying it’s helped Savannah become an attractive tourist destination and added to the quality of life for all residents. 

“However —and it’s a big ‘however’  — as SCAD has grown, their reliance on municipal services has grown,” Johnson said. He mentioned River, saying the city has to be able to address what comes along with such a big building.

“SCAD should pay. They don’t have to. But they should want to,” Johnson told the packed audience, referring to the institution and the expanding demands that its infrastructure and growing student body place on city services.

 It’s a message that Johnson has voiced often in the past. He did not provide a roadmap for a solution, instead saying he would “continue to elevate” the issue.

Chatham school board member David Bringman (District 6) is one of the local officials who said the status quo needs to change to reflect SCAD’s growth. Since other top-tier private schools make ongoing payments in lieu of taxes to their communities, then Savannah’s top school should do so, as well. 

Savannah-Chatham County Public Schools have more specialized instructors, such as music and art teachers, than the state will fund, Bringman noted. 

“Why don’t you just come alongside and be like, ‘We’re helping out the city that made us and the city that we helped grow?’” he said. “I don’t believe that giving some would create any financial burden for SCAD because it’s gotten to be that big, that healthy.”

“So yeah, that would be my ask,” Bringman said.  “We could literally say that your money pays for our teachers and then we would move that line item of money over to something else.”

In its statement to The Current, SCAD listed what it terms its municipal “Impact Points of Pride.”  

The private bus system, it said, reduces the number of students driving to class and using parking spaces and prevents any strain on public transit. The school’s new or rehabilitated buildings provide sidewalks, lighting and patrol by their own security.

SCAD works on public playgrounds and community centers and plants trees, the statement said. SCAD also developed a below-market-rate, 22-unit apartment building on Pulaski Square, it added. 

(That building, The Lorlee, is one of SCAD’s few buildings that is taxed.)

How it could change

In Georgia property tax exemptions are dictated by the state, so a city council, mayor or school board can not amend those provisions on their own.

In other states, however, city halls have generated pressure to negotiate voluntary payments from their institutions of higher learning.  

In Providence, city officials recently negotiated a voluntary agreement that will see four private schools pay the city up to $223 million over 20 years. (The city’s biggest school, Brown University, benefits from the deal as well, as it gained control of some city streets around its buildings.)

In Philadelphia, after years of activist agitation, the University of Pennsylvania announced in 2020 a donation of $100 million over 10 years to the city’s public schools.

Across Georgia, private, nonprofit educational establishments take advantage of the tax exemptions provided under state law, including the schools of the Atlanta University Center Consortium, Emory University, Agnes Scott College, Mercer University and others. 

Chatham County administers state property tax law on exempt properties, but Chatham does not make the exemption law.  The county assessor’s office values SCAD’s buildings, as it does homes and other structures. It also checks whether an exempted SCAD building is being used in line with the state’s broad exemption for college buildings. 

The Supreme Court of Georgia has refined that definition. In one case, a Fulton County performing arts nonprofit was denied an educational property tax break on a building where it offered classes. 

“At a minimum, the building must be a place where teachers instruct students,” the justices wrote, finding that the nonprofit’s headquarters was not a building used for education. “A building in which aspiring artists develop their abilities by practicing their craft does not qualify.”  

And in a case involving a revenue-producing dairy barn at a Rabun County private school, the court found there’s no exemption for private school buildings which are mainly used for income. That’s why SCAD has tax liability on the diners on Barnard and Habersham streets that it owns and leases out.

Chatham assessors review and audit tax-exempt properties every three years, and sometimes the review does turn up questions.

For example, in September, SCAD lost the property tax exemption on the building once known as the Clarence Thomas Center for Historic Preservation. That’s after assessors found it to be empty and SCAD unresponsive to questions about its use. 

Want to know more, see this map:

Savannah Economic Development Authority: the biggest landowner you’ve never heard of

When companies relocate or open facilities in Chatham County, the local development authority heralds the announcement as a win for the economy and for workers. Harder to find, however, are documents about property tax breaks that endure for years.

To woo businesses, jobs and development, one thing SEDA offers is property tax savings. On paper, SEDA holds legal title to warehouses or factories or other properties that are in practice controlled by a company.  As a public agency, SEDA is exempt from property taxes, so there’s no tax bill for either party. 

Currently, SEDA is a signatory to about 50 such contracts that provide tax breaks or abatements for businesses the agency has helped bring to the county, deals that SEDA chief executive Trip Tollison describes as unequivocally good for the long-term health of the economy. 

This list of beneficiaries includes multinational companies like Mitsubishi and Gulfstream, as well as little known companies or legal entities that are the beneficial owners of property, according to county property and tax records. 

In 2022, the impact of these deals equated to more than $30 million in potential tax revenue uncollected for public schools, county and city services, including the Chatham Area Transit Authority.  

Some of the companies with contractual relationships with SEDA have made payments in lieu of taxes. In 2022 such payments totaled $6.2 million, with the majority of those funds being directed to offset infrastructure improvements performed for the further benefit of the company.

Tollison, who has led SEDA since 2013, said at least one company with property tax breaks from a development deal still elects to pay school taxes. A warehouse owned by Amazon pays about $982,000 per year in an agreement that started in 2023.

“The state of Georgia allows development authorities to abate school tax,” Tollison said. “So, it’s usually a company decision. We’re not for or against it, we don’t take a position.”

When asked his views on how tax abatement affects school budgets in Chatham County, Chatham County’s Board of Education Chairman Roger Moss, Jr., had no comment. 

Tollison runs SEDA with 19 board members appointed by Savannah City Council and the mayor, by the Chatham County Board of Commissioners and by other board members themselves. 

The SEDA board recently finished a regular update on its rules for granting property tax abatements.

“It provides us with the toolkit and gives us ranges where we can provide incentives, it’s based on us being competitive with other communities,” Tollison said in an interview late last month. “So we look at what Charleston’s doing, what Jacksonville is doing, look at what Mobile is doing, look at other cities in Georgia.”

The guidelines stipulate that the more job advertisements and the more building a company completes, the longer the duration of the possible property tax break. The maximum time frame for tax benefits is 20 years for manufacturers that promise at least 200 new full-time jobs and $50 million in local investment that choose to locate at the Savannah Chatham Manufacturing Center, a county industrial park opened in 2020. It’s a marquee development meant to attract tenants that use automation and other high-tech methods. 

But the guidelines are flexible in “special circumstances,” for example, an existing Chatham company erecting a new building or installing equipment without any new hires.

Warehouses are among the types of businesses that benefit from SEDA subsidies. However, Tollison said SEDA has quit offering tax breaks to new warehouses. 

The new 2024 rules include a focus on promoting development in Chatham’s less-developed areas, by lowering the threshold for investment or hiring in areas that have that designation from the federal, state or Savannah government. 

Who’s developing differently?

In Bulloch County, the development authority is an outlier in Georgia for thinking about the contours of corporate deals differently. 

Benjy Thompson, CEO of the Development Authority of Bulloch County has the same challenges as his peers: trying to get companies to “yes” to setting up shop in his jurisdiction. And he has incentives to offer, like tax breaks and discounts on land purchases. 

But in his 13 years in his job, Thompson has kept one item off the negotiating table: school taxes.

“When I started, it was my point of view that the school system, particularly in a county like ours, is so vital to creating a local workforce for these kinds of projects,” Thompson said.  “I felt like if we could get away with it — and let’s do it for as long as we can — let’s try to avoid having school tax savings be a part of our incentive offer.”

Bulloch’s labor pool in a population of about 86,000 is tiny compared to Atlanta’s outer suburban counties. Thompson, therefore, prioritizes the notion that companies should hire the local residents, especially younger folks.

He said he’s never had any pushback on school taxes from companies that have chosen Bulloch, including the five new industrial tenant deals signed since February 2022. 

Special tax breaks are a common policy all across the country, but among economists, there’s no consensus on how effective special tax breaks are for achieving policy aims, like job creation or promotion of any certain industry. It’s difficult to disentangle the effects of layers of local, state and federal subsidies from each other and from the effects of  a community’s other more important offerings like a port or an educated workforce.

Tollison said that SEDA’s guiding vision is to make short-term investments for long-term gain, as incentives that can put a company “on the one-yard line” about making a decision to set up shop in Chatham, instead of Charleston. 

As for what he would want people to know about abatements, Tollison offered this: 

“Don’t hate the player, hate the game.  You know, every state, every community is going after development projects.”

To know more about SEDA’s holdings in Chatham, see this map:

Meg Coker contributed reporting.

Methods:

This story began with The Current’s review of Chatham County’s 2023 annual Tax Digest.

The digest is the county’s official list of parcels, owners and value as of Jan. 1 each year.

We felt it was important to explore this document and understand which entities do and do not pay property taxes and then figure out what the revenue foregone might mean to local public services. SCAD was a natural place to start because its holdings are often a topic of public speculation.

The Current also felt it was worth explaining the operations of as large an economic player as SEDA that has the power to abate taxes. Chatham schools and the county summarize the revenue reductions in their annual comprehensive financial reports.

The Current’s analysis comes mainly from an overview table in the digest that lists ownership, fair market value and exemption status of nearly 147,000 parcels of land, and pieces taxable equipment and inventory in Chatham County.

The county assessor’s office takes months to finalize every annual tax digest, and it’s the basis of each year’s tax bills.

The finished electronic digest contains tables and map files with detailed information on transactions, real estate and other items.

Using Excel spreadsheet software, we were able to sum up properties in several ways: by owner, by exempt tax status and by fair market value, for example.

Owner names can be inconsistent in the records. For example, “Savannah College of Art and Design” is a little different from “The Savannah College of Art and Design,” even though both names refer to the same entity.

We standardized these names before working on SCAD sums. We categorized entities as part of SCAD — such as the Lucas Theatre, diners and the SCAD Museum — if the ownership entity shared a business address and officers with SCAD.

SEDA came out as the largest property owner by value in Chatham County — on paper. Its portfolio is worth more than $2.6 billion, more than double the public school system, its nearest competitor.

However, day-to-day control of these properties is in the hands of the mall, the warehouse company, the manufacturer and so on. The properties are just in SEDA’s name to take advantage of its tax-free status as a public entity. And some companies do make some payments in lieu of taxes, so most of them do not have a full exemption.

References:

02.13.2023 Project Fire Thorn REAL PROPERTY Abatement with remittance to SCCPSS, via open record request to SEDA, document dated Feb. 13, 2022, updated Feb. 13, 2023.

2022 Savannah Economic Development Authority Abatement Contracts, via open record request to Chatham County, document covering calendar year 2022.

Chatham County 2022 Annual Comprehensive Financial Report.

Chatham County Board of Assessors online database and property record search.

Chatham County Fiscal Year 2023-2024 Adopted Budget.

Chatham County Property Tax Digest, June 6, 2023, via open record request to Chatham Count. (Extract of records used for this story.)

"Latest Data: Which Private-College Presidents Earned the Most?", The Chronicle of Higher Education, July 24, 2023.

Savannah 2024 Proposed Budget & Capital Improvement Plan.

Savannah-Chatham County Public Schools Annual Comprehensive Financial Report for Fiscal Year Ended June 30, 2022.

Savannah-Chatham County Public Schools FY 24 Teacher Salary Scale (190 Day), effective July 1, 2023.

Savannah-Chatham County County Public School System FY2024 Adopted Budget.

Savannah Economic Development Authority board packet from meeting of Dec. 12, 2023, via open record request to SEDA, Dec. 12, 2023.

SEDA 2023 properties changes, via open record request from SEDA, Dec. 20, 2023

Type of Story: Explainer

Provides context or background, definition and detail on a specific topic.