Sherman v. Development Authority
320 Ga. App. 689
| Ga. Ct. App. | 2013Background
- The State of Georgia sought court approval to issue and validate taxable revenue bonds for the DAFC to finance a Fulton County manufacturing project to be leased to Owens Corning; Owens would eventually acquire the project for nominal consideration at lease end.
- The Memorandum of Agreement sets valuation methodology: fee-simple value by income approach and leasehold value via a ramp-up schedule starting at 50% of fee value and increasing 5% annually over ten years.
- Sherman, a Fulton County taxpayer, challenged valuations, the bond structure, and potential ultra vires and tax-exemption issues; he sought detailed findings of fact and law under OCGA § 9-11-52 (a).
- The trial court validated the bond issuance but provided only conclusory findings and no analysis, prompting de novo review for plain legal error and a remand directive.
- On appeal, the court vacated the trial court’s order and remanded for new findings of fact and conclusions of law addressing (i) valuation method validity under Harris and Sherman I, (ii) compliance with OCGA § 36-62-8 (b), (iii) ultra vires concerns under OCGA § 36-30-3 (a), and (iv) any unconstitutional tax exemption issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of ramp-up valuation method | Sherman contends ramp-up is arbitrary and violates Harris and Sherman I. | DAFC argues ramp-up complies with Harris and Sherman I. | Remand for explicit findings; existing findings insufficient under OCGA § 9-11-52 (a). |
| Sufficiency of trial court findings under OCGA § 9-11-52 (a) | Court failed to provide factual findings and analysis linking them to conclusions. | Not explicitly addressed; argues conclusions were adequate. | Remand required; order vacated for proper findings and analysis. |
| Bond structure compliance with OCGA § 36-62-8 (b) | Structure may result in Owens purchasing its own bonds with no funds changing hands. | DAFC maintains structure complies with statute. | Remand to consider and fact-find on statutory compliance. |
| Ultra vires act and tax-exemption concerns (OCGA § 36-30-3 (a) and Constitution) | Memorandum execution not authorized; potential constitutional tax exemptions. | Lower court did not address ultra vires/constitutional aspects in depth. | Remand for findings and legal analysis to address ultra vires and tax-exemption issues. |
Key Cases Cited
- Sherman v. Dev. Auth. of Fulton County, 317 Ga. App. 345 (2012) (declares need for meaningful findings; Harris framework applies to leasehold valuation)
- Sherman v. Dev. Auth. of Fulton County, 317 Ga. App. 351 (2012) (Sherman II; remand for proper §9-11-52 (a) findings on ramp-up method)
- Harris v. DeKalb County Bd. of Tax Assessors, 248 Ga. 277 (1981) (establishes Harris factors for evaluating valuation of leasehold interests)
- Sherman I, 288 Ga. 88 (2010) (premised on ramp-up valuation issues and Harris-based review)