Hoover council OKs $900,000 in tax breaks for McLeod Software expansion

by

The Hoover City Council on Monday night approved more than $900,000 worth of tax abatements for McLeod Software, a transportation management and trucking software company based in Meadow Brook Corporate Park that is embarking on a $14 million expansion.

McLeod in 2018 invested $21 million in buying the 140,000-square-foot 100 Building in Meadow Brook Corporate Park and renovating it for its corporate headquarters, moving 400 jobs to Hoover, city records show.

Since then, the company has added 232 jobs, 150 of which are remote positions that are not physically tied to the office, records show.

McLeod ran out of space, and now the company has bought more space and wants to bring remote and new jobs related to growth in-house, CEO Tom McLeod told the Hoover City Council Monday night.

Two weeks ago, a close operating partner of McLeod — Software Guys 2.0 — bought the nearby 300 Building, a five-story building which has another 101,527 square feet that has been vacant for more than 10 years, McLeod said. The plan is to renovate the 300 Building, which McLeod said is in great shape but needs refurbishing so it can accommodate modern technology. It was built more than 30 years ago, he said.

His company plans to occupy about 20,000 square feet of the 300 Building initially, grow into more space there and lease out space to other companies, he said. It probably will be nine to 12 months before the space is ready to be occupied, he said.

McLeod also just spent more than $1 million renovating the first floor of the 100 Building to accommodate a 4,000-square-foot conference center that can handle 300+ people, he said. His company already has started using the conference center to host meetings for the transportation industry, and he hopes the community at large can use the facility as well, he said.

Hoover’s Office of Economic and Community Development recommended the city offer tax abatements estimated at $935,290 to assist with McLeod’s expansion. That includes $479,290 in property taxes and $456,000 in sales and use taxes related to construction, city records show.

Of those tax abatements, $377,522 would have gone to the city of Hoover, $323,858 would have gone to the state, and $233,910 would have gone to Shelby County, records show.

However, due to increased property values, Hoover City Schools should gain $657,312 in additional property taxes over 10 years because the education portion of property taxes is not being waived, Hoover Economic Development Manager Greg Knighton said.

Also, the new jobs being brought into Hoover are projected to have an average annual salary of $73,000, for a total increased payroll of almost $11 million, records show. Those employees are expected to spend some of that money on things such as lunch, gasoline and groceries in Hoover, which should increase sales tax revenue as well, economic development records said.

Knighton said McLeod Software has been very supportive of the city’s desire to make Meadow Brook Corporate Park a technology hot spot, believing that adding technology jobs will attract other technology companies and develop business synergies.

Hoover Council President John Lyda noted this is the second time the city has partnered with McLeod Software with tax breaks. The Hoover City Council in December 2017 approved nearly $1 million in tax breaks for McLeod’s initial relocation to Meadow Brook. Lyda said the city is proud to be a partner with McLeod.

Derrick Murphy, chairman of the council’s Commerce and Development Committee, said it’s huge anytime a city is able to fill a vacant building, whether that be for commercial or residential purposes.

McLeod Software has developed products that are in demand in the transportation industry, and he looks forward to seeing them continue to expand, he said.

“Evidently, they feel comfortable here. We love having them here,” Murphy said. “We want to keep that relationship going.”

In other business Monday, the Hoover City Council:

  • Amended the city’s fiscal 2023 budget to provide $3 million for construction of a new Hoover Fire Station No. 1 on former bank property the city bought last year along U.S. 31 at Braddock Drive and $2 million to renovate the Lorna Professional Building the city bought last year at 3021 Lorna Road for Fire Department administrative offices and potentially other city offices.
  • Encouraged state legislators to amend state law to make the false reporting of a felony to be a Class C felony itself instead of a misdemeanor.
  • Agreed to pay at least $10,000 to Leavell Design Consulting for a regional trail planning study
  • Agreed to pay former Hoover Executive Director Allen Pate $125 an hour for work on special projects for the city, particularly negotiation of a new contract with the Southeastern Conference for continuance of the SEC Baseball Tournament at Hoover Metropolitan Stadium. Pate, who was in charge of building the Hoover Met in the 1980s, has expertise that will be valuable as physical changes are made to the facility, Mayor Frank Brocato said. Pate may also consult on other projects but probably will be through working for the city in 60 to 90 days, Brocato said.
  • Accepted $10,000 from the Jefferson County Commission to help with expenses associated with The Hartford Nationals disability sporting competition held in Hoover, Birmingham, Homewood and Pelham July 8-14.
  • Appointed Assistant City Engineer Blake Miller to take former Hoover City Administrator Allan Rice’s spot on the Cahaba Solid Waste Disposal Authority.
  • Approved a license for the Charm Thai restaurant at 3730 and 3732 Lorna Road to sell alcoholic beverages.
  • Rejected a $110,000 bid from MXI Environmental Services to handle disposal of waste from Hoover’s Household Hazardous Waste Day and authorized the mayor to negotiate a lower amount with MXI.
  • Declared 15 Chevrolet Tahoes as surplus equipment due to high mileage or maintenance issues, as well as other equipment such as lawn mowers, mosquito sprayers and generators. The equipment is to be sold at auction, Fleet Director Dustin Moore said.
  • Authorized the mayor, city administrator or other designee to settle third-party claims and worker’s compensation claims against the city with written approval from the City Council president and council Finance Committee chairman.
  • Declared properties at 2161 Kelly Lane, 2137 Lynngate Drive and 242 Russet Woods Drive as public nuisances due to high weeds and/or grass and agreed to pay for cutting of high weeds and/or grass at 2405 Tyler Road and 425 Shades Ave and putting a lien on the properties to recover the cost.
  • Agreed to authorize the removal of a deck and two-story storage addition to the back of a townhome at 3416 Cedarcrest Circle due to structural issues that make them unsafe and putting a lien on the property to recover costs.
  • Agreed to annex properties at 8167 Annika Drive, 1523 Highland Gate Point, 2440 Southwood Trace, 2821 Sterling Way, and 249 and 250 South Burbank Drive.