Hoover council reconsiders tax incentive, doubles rebate for U.S. 31 strip center
The Hoover City Council on Monday night changed its mind about a tax rebate agreement for a company that is redeveloping property along U.S. 31 near the entrance to the city from Vestavia Hills.
On Oct. 7, the council agreed to rebate 25% of sales tax revenues from whatever businesses locate there over the next 10 years, up to $500,000.
However, the development company, Orange Development, had asked for a rebate of 50% of sales taxes for up to 10 years, also with a cap of $500,000. After giving the matter more thought, council members on Monday voted 6-1 to grant that request.
Councilman Curt Posey, who had made the original motion for the 25% rebate, said during a work session on Thursday that the 50% rebate is what is needed to help pay for the infrastructure improvements the developer is providing.
Orange Development intends to invest $4.6 million in development of the site, which is on according to the rebate agreement. That includes about $150,000 in a new southbound turn lane from U.S. 31 into the site, said Greg Knighton, the city’s economic developer.
Posey also noted that the new development will be a big improvement from what was there before. The property at 1539 Montgomery Highway is the former site of a Mr. Transmission auto repair shop and a long-vacant Mexico Lindo restaurant.
That site is a gateway to the city, and approving the 50% rebate will show the commitment that city officials have to keep the looks of Hoover up to a standard that everyone wants it to be, Posey said.
Councilman John Greene was the only councilman to vote against the additional tax rebate incentive.
Former Hoover Councilman Jody Patterson spoke against the additional rebate. “Somewhere down the line, this has got to end,” Patterson said. “I think we’re subsidizing far too many property owners.”
Knighton said the city administration receives many more requests for tax incentives than it brings to the council for its consideration. Others are told no before it ever reaches a public forum, and the only ones brought forward are those that make sense in terms of the number of jobs that will be created or the additional revenue or public safety or infrastructure improvements the development will bring to the city, Knighton said.
Orange Development and the city expect the new development to generate $1.45 million in sales tax revenues for the city between 2020 and 2030, Knighton said. So the city should gain about $1 million in new sales revenue even with the 50% rebate, he said.
Redevelopment of the site also should increase property taxes, Knighton said. Jefferson County currently has the property valued at about $1 million, he said. If that amount doubles, property taxes likely would be more than $18,000 a year to the city, with about $16,000 of that going to Hoover City Schools, Knighton said.
The tax rebate agreement does not allow Orange Development to count any tax revenues from businesses that relocate from within the city of Hoover or anywhere in Jefferson County, in order to honor an anti-poaching agreement between Hoover and numerous other cities in the county.
The City Council also on Monday night approved another tax rebate agreement for a new restaurant called Farrelly’s Southern Bar & Kitchen that is going in the spot formerly occupied by The Boot at The Grove in The Grove shopping center at the corner of Interstate 459 and John Hawkins Parkway.
That restaurant, to be owned and operated by George and Eileen McCluney, also will receive a 50% percent sales tax rebate for the next four years, up to a total of $40,000.
Councilman John Lyda said the city essentially is transferring the same tax rebate that existed for The Boot at The Grove, which went out of business at the end of June, to the new restaurant. The Boot at The Grove had four years left on a five-year tax rebate when it shut down, he said.
Greene was the only councilman to vote against the tax rebate for Farrelly’s.
In other business Monday night, the City Council:
- Amended the city’s 2020 budget to provide $15,000 toward a feasibility study for a performing arts facility in Hoover. Posey said the Hoover Arts Council hopes to pool that $15,000 with money from the state arts council and another Jefferson County organization to pay for such a study.
- Amended the 2020 budget to include grant money for body cameras and bulletproof vests for the Police Department and a federal grant that would pay for three full-time fire medic positions for the Fire Department for three years. Lyda noted the city will have to pick up the cost for those positions after three years and advised that city officials need to be very careful about adding such costs because the economy eventually will slide downward again.
- Gave approval for alcohol licenses for On Tap Sports Café at 810 Inverness Corners and Yarbrough Food Festival Foodservice for the Moss Rock Festival in The Preserve community on Nov. 2-3.