Tallassee Mayor Bobby Payne at Monday night's council meeting where a tax incentive package for Patton Plaza, LLC passed unanimously
City approves retail package for Patton Plaza
By Michael Butler
The Tallassee City Council has approved an economic development grant agreement with Patton Plaza, LLC for improvements to the shopping center on Gilmer Avenue.
The incentive plan will allow the developer to receive 1 1/2 percent of sales tax revenues over ten years generated by Tractor Supply Company in the former Winn Dixie building.
The developer, Helms Roark, Inc., will invest the funds collected for approximately $690,000 in improvements and renovations. About $2 million in annual revenues is estimated for the proposed Tractor Supply store.
Bill Helms of Helms Roark, Inc. said incentives for retail development are commonplace in other municipalities.
"I've been in development for 30 years. I've gotten help from many cities on new developments from sewer and water to cash contributions," Helms said. "These retail tax rebates have been getting very popular in towns. Small towns are doing it to try and get development to come back to town."
Among the cities that Helms referenced include; Alabaster ($1.9 million in tax rebates for Dick's Sporting Goods over ten years, $516,000 for Ulta over five years), Hoover ($4.5 million for Field and Stream over ten years), Birmingham (Summit - $500,000 for Gus Mayer), Anniston ($3 million for former K-Mart building development).
Montgomery devised a program for downtown development worth $1.7 million. Wetumpka, Vestavia Hills, Gadsden, Gardendale and Thomasville have put together incentive plans, some advertising them on their websites.
Councilman Bill Godwin, who serves as the city's finance committee chair, reviewed many of those arrangements citing Thomasville's incentive guidelines for new and expanding retailers.
Thomasville's criteria includes: having a brick and mortar location, employees physically employed in the Thomasville location, a projected annual retail gross taxable sales of $1.5 million or greater, a project that employs five or more full time employees with a minimum $500,000 capital investment including property, building, equipment and renovation.
"I think 1 1/2 percent is fair," said Godwin. He talked about a similar proposal that was introduced in a public meeting last year with a developer looking to bring in the hardware store Marvin's.
"Marvin's had 92 percent of what was already available in Tallassee," Godwin noted. "That was going to be strictly a market share. They said they were going to do $3 million a year. The existing hardware stores did $1.9 million the previous year. How were they going to do a million more?
"If they'd taken 30 percent of True Value's business. They city would've lost sales tax and put True Value out of business. They would've had to do more than $4 million for us to break even. The numbers didn't add up."
Tractor Supply's sales include livestock and pet products that account for 44 percent of sales. Hardware, tools, truck and towing products account for 22 percent. Lawn and garden equipment is approximatley 20 percent.
Tallassee Redevelopment Authority chairman Hank Golden said that while there is some "overlay" with existing businesses that the proposal would not "canibalize existing businesses."
"Everybody wins," Golden said. "We've got a benchmark now. It puts a stake in the ground."
Helms added that work should begin promptly. "We're prepared to act quickly. Tractor Supply has made a conditional commitment to me. They want to go ahead and get started."