Hoover City Council gives $1 million in tax breaks to McLeod Software

The Hoover City Council tonight approved nearly $1 million in tax breaks for a software company that plans to relocate its corporate headquarters to Meadow Brook Corporate Park off U.S. 280.

The company, McLeod Software, now operates out of a 60,000-square-foot office building off Acton Road across from International Park in unincorporated Jefferson County and 15,000 square feet of office space in the Riverchase office park, President and CEO Tom McLeod said.

But the company plans to invest nearly $16 million to buy and renovate a 140,000-square-foot building (Building 100) in Meadow Brook Corporate Park, McLeod said.

McLeod Software will consolidate the 300 employees in its two offices in the Birmingham area into the new location and plans to double that workforce in the next five years, McLeod said.

McLeod Software initially will occupy 80,000 square feet of Building 100, which in years past was home to Rust Engineering, McLeod said. The other 60,000 square feet of space is currently rented out, he said. He plans to either expand into that space if it becomes available or use other available space in Meadow Brook Corporate Park for expansion, he said.

The company has another 80 or so employees in offices in Salt Lake City and the Chicago area, and those employees will stay there, he said. The growth he anticipates in Hoover will be newly created jobs, he said.

McLeod Software, which provides software for the transportation industry (mostly trucking companies), has grown by more than 20 percent in revenues and staff each of the past six years, McLeod said. Six years ago, the company had only about 140 employees, he said.

To help with the relocation effort, the Hoover City Council tonight agreed to abate about $700,000 of non-educational property taxes over 10 years, plus about $261,000 worth of sales and use taxes associated with anticipated construction work, Hoover City Treasurer Robert Yeager said.

Only about $267,000 of the property taxes to be abated would be money that would have come to the city of Hoover, according to information provided by Yeager. About $227,000 of the property tax of the property taxes that could be abated would have gone to the state, while about $205,000 of property taxes would have gone to Shelby County, according to Yeager’s data.

Similarly, only about $105,000 of the $261,450 in sales taxes that could be abated would have gone to the city of Hoover. About $139,000 of the sales taxes would have gone to the state, and about $17,000 would have gone to Shelby County.

Yeager stressed that the company would pay all property taxes devoted to education, so schools would not lose out on any money with this deal.

Hoover Councilman Mike Shaw said he is encouraged and excited to gain a company with a great reputation like McLeod Software in the city of Hoover.

Councilman Derrick Murphy, chairman of the council’s Economic Development Committee, said it’s great to see so many new jobs headed to Hoover and thanked McLeod for choosing to bring his headquarters into the city.

Yeager said the average salary of jobs at McLeod Software is $90,000 to $100,000 a year, which he said will greatly benefit the local economy.

McLeod said he avoided the trend of outsourcing software development jobs overseas and chose instead to keep the jobs in-house and in the United States. Having the software development team in one place helps with quality control, responsiveness to customers and building a strong company culture, he said.

McLeod Software provides a wide range of services for the transportation industry, including trucking software, transportation dispatch, accounting, operating and brokerage management software, and document management systems.

The company was founded in 1985 and was ranked the No. 1 software development company in the Birmingham-Hoover metro area each of the past three years, McLeod said. In 2017, Inbound Logistics named McLeod Software among the Top 100 logistics information technology providers in America.

Hoover Mayor Frank Brocato thanked the Birmingham Business Alliance, Alabama Department of Commerce and 58 Inc. (Shelby County’s new economic development entity) for their help in making this relocation project a reality in Hoover.