Firm: Contractors stood to profit in South Fulton deal

Questions swirl about what role city’s mayor, council member played.

A new investigation into a controversial economic development deal for the city of South Fulton claims that two city contractors would have personally profited if a business had received a tax break from the city.

The business instead went to Fulton County for a tax abatement, and now questions about the role the city’s mayor and a council member played in that deal could end with both losing their elected seats after a hearing Monday.

The investigative report by a private firm, paid for by the city, was obtained Friday by The Atlanta Journal-Constitution. It’s unclear what role the report’s findings will have on the council’s inquiry regarding the elected officials. However, it sheds new light on decisions made as the city worked to keep an expanding business in South Fulton.

According to the report, city attorney Emilia Walker, financial adviser Ed Wall and a local bond attorney or their firms stood to

make $250,000 collectively if Halperns’ Steak and Seafood Co. went to the new South Fulton development authority for tax breaks to help it expand. Instead, the company went in October to the more-established Development Authority of Fulton County, where it obtained $27 million in tax abatements.

The abatements involve bonds that can generate income for attorneys and agencies involved in drawing them up.

Wall, the financial adviser to the South Fulton Development Authority, disputed the report’s findings and said he would not have benefited financially if the company had gone to South Fulton for the tax abatements. He said he would not have charged his normal fee to the city in order “to not put South Fulton at a disadvantage.”

Walker said she couldn’t comment on the report because members of council have not yet discussed it. She said any finding that she would have benefited financially was “speculative.” But, Walker added, she would have expected to be paid if a deal were completed.

“I don’t work for free,” she said. “I’m not doing pro bono work.”

The report, written by investigator and mediator Terri Stivarius, was dated Dec. 22. It accuses city attorney Walker of going directly to the company — which was already working with the Development Authority of Fulton County — to try to convince Halperns’ to make the deal through the South Fulton Development Authority instead. Walker acknowledged to the AJC she had reached out to the company “asking them to do business in the city.”

The report also says that Walker suggested Stivarius look into the South Fulton economic development director’s bank account. Her tip suggested a “level of suspicion (that) has no basis in any evidence,” Stivarius wrote. Walker declined to comment on that finding.

One council member, Khalid Kamau, said Friday afternoon that the report was rushed and biased. He said he wasn’t concerned that Wall or Walker might benefit personally, saying he would expect those who do business recruiting and other work to see the benefits.

A timeline in the investigation indicates that the state came to South Fulton’s economic development director with the potential deal. The company was considering a move to Kentucky and wanted to move quickly. The city’s economic development director expressed concern that the South Fulton Development Authority — which has not completed any deals — could do so before the end of the year, when Halperns’ wanted the bond process to be finished.

In the report, investigator Stivarius said she would have preferred to complete her investigation after Monday’s hearing, when more information might be available, but the city manager asked that she not wait.

“I’m a straight shooter,” Stivarius said. “Ultimately, my goal is to try to uncover the truth.”

Monday’s City Council hearing will be the culmination of an investigation that began in mid-November. Then, some council members accused Councilwoman Helen Zenobia Willis of sending the Halperns’ deal to the county, even though council members had voted to direct the city development authority to do such deals themselves.

The council members who voted for the investigation said Halperns’ decision to go to the county for the bonds could have cost the city millions of dollars, though Stivarius’ report disputes that claim.

A judge dismissed an effort earlier this month to hold a hearing that could have led to Councilwoman Willis’ removal from office. Undeterred, council members voted again to investigate Willis and Mayor Bill Edwards. Both could be removed from office Monday if the council votes to do so.

The pair asked a Fulton County Superior Court judge for a temporary injunction, but the request was dismissed. In a Friday meeting called on Christmas Day, council members rejected Edwards’ attempt to veto part of the order calling for the hearing. It will go on as scheduled.

“To me, it’s apparent that they don’t want the truth out,” said Rosie Jackson, a member of council.