After a Dec. 2 appearance in Putnam County Superior Court, where local citizens and Putnam County District 3 Commissioner Stephen Hersey voiced opposition to a proposed development deal, Superior Court Judge Stephen A. Bradley has ordered an independent auditor to investigate the project’s finances.
The order targets a $100 million “Bond for Title” agreement — sometimes called a “phantom bond” — between the Putnam Development Authority (PDA) and developer Harmony Road GA, LLC.
Unlike traditional bonds, in which a government borrows money to build infrastructure, a phantom bond is a legal maneuver in which the Authority takes title to private property to grant it government tax-exempt status. The authority then “leases” the land back to the developer, effectively bypassing standard property taxes.
Judge Bradley’s order comes as a response to “voluble discord” and public mistrust surrounding the project, which aims to build a 275-unit residential complex in the Lake Oconee area off Harmony Road.
Hersey and Putnam County resident Jennifer Ray appeared at the December hearing to unofficially intervene on behalf of the public, arguing that the PDA acted without legal authority.
A primary point of contention is the project’s Memorandum of Understanding (MOU). Critics allege the PDA labeled tax-offset payments as “rent” to dodge the PILOT Restriction Act, a state law that requires written consent from the county and school district before granting such tax breaks.
Without that consent, the project stands to strip an estimated $6,080,367 in property tax revenue from local coffers over the next 15 years.
In exchange for this $6 million, the MOU outlines a “Community Jobs Goal” of three cumulative jobs over 15 years. It also mentions a “Community Housing Goal” of reserving 27 units for local workers, though opponents note the document fails to guarantee any actual rent savings or affordability standards.
“In order to allay any fears or public mistrust, this Court requires that ... there be an auditor providing information to the public,” Bradley wrote in his order.
Under the Georgia Constitution, the power to tax belongs to the county’s governing body, not an appointed authority. So, the judge further raised a legal question: Can a development authority legally force a tax break on a community when the elected Board of Commissioners has already voted against it?
The court-ordered auditor must be a third party agreed upon by both the PDA and the county commission. They will be tasked with providing a “thorough description and opinion” on whether the deal is actually sound and reasonable for the public.
A follow-up hearing is scheduled for 9 a.m. on March 31, during which the auditor will present their findings.