Benton Nissan dealership may leave Hoover for Irondale, council president says

Benton Nissan may be leaving Hoover for Irondale, Hoover City Council President Gene Smith said tonight.

Dale Benton, the owner of the dealership at 1640 Montgomery Highway, asked Hoover officials for a tax incentive to help pay for an upgrade to his Hoover dealership and was denied, so he is looking to move his dealership to Irondale instead, Smith said.

Efforts to reach Benton for comment tonight were unsuccessful, but Smith said Benton was seeking a tax abatement from Hoover to pay for an upgrade at the dealership there.

Hoover Mayor Frank Brocato confirmed Benton had asked for a tax abatement, and Brocato said he didn’t think it would be fair to give a tax abatement to Benton Nissan when other dealerships in the city have made improvements without tax incentives.

Smith said that has prompted Benton to look at moving to Irondale instead. Smith said his understanding is that Benton wants to build a $15 million dealership in Irondale and is trying to recoup half that investment from Irondale.

Brocato said he would like for Benton Nissan to stay in Hoover. “He’s got a good business here. He’s a fine man,” Brocato said. But other car dealerships have done a wonderful job of improving their businesses without incentives, and “we want to be fair to them as well.”

Smith said it would be sad to see Benton Nissan leave Hoover. “Nissan (under a previous owner) was one of the first car dealerships in Hoover, if not the first,” he said.

If other car dealerships didn’t ask for incentives to improve their dealerships or add brands, maybe that was a mistake on their part, Smith said. If the Hendrick Automotive Group had asked for a tax abatement for improvements at the Hendrick Hoover Auto Mall, maybe the company would have gotten it, Smith said.

Smith said he’s not saying he would have approved what Benton Nissan requested, but he at least would have liked the opportunity to sit at the negotiation table with Benton.

Now, it looks like the city will lose an entire dealership, which likely employs more than 100 people, Smith said.

This follows the decision of Mercedes-Benz of Birmingham to move its new car sales from Hoover to Irondale. The Mercedes-Benz dealership in Hoover now is the home for Mercedes’ commercial van sales but also sells used vehicles and continues as a Mercedes service location.

The Benton Automotive Group also has Benton Nissan dealerships in Bessemer, Oxford and Columbia, Tennessee.

TAX ABATEMENT FOR MEDICAL DEVICE COMPANY

The discussion about Benton Nissan surfaced tonight after the Hoover City Council heard a presentation from the city’s economic developer, Greg Knighton, about another company seeking tax abatements.

Knighton, during a meeting of the council’s Economic Development Committee prior to the regular council meeting, did not name the company, but said it produces medical devices at a 60,000-square-foot facility in the Shelby County part of Hoover, where it currently employs 185 people.

The company is proposing to invest $2 million to improve its facility in Hoover and add 60 new jobs over the next three years, Knighton said. The new jobs would be in a variety of areas, including, customer care, finance, operations, sales and marketing, and the average wage for the new jobs would be $50,000 per year, he said. The current average wage of all employees there is $75,000 per year, he said.

The company is seeking $121,290 worth of tax abatements, including $103,125 in one-time sales and use tax abatements and $18,165 in personal property tax abatements over 10 years, Knighton said.

However, the city of Hoover’s portion of the abatements would be only $52,500 in sales and use taxes and $6,747 in personal property taxes, he said. The state would lose $45,000 in sales and use taxes and $3,633 in personal property taxes, and Shelby County would lose $5,625 in sales and use taxes and $7,785 in personal property taxes, he said.

Also, the owner of the physical property where the company is located would continue to pay real estate property taxes, which would increase with the improvements, Knighton said.

Councilman John Lyda said he wanted to know how long it would take Hoover to recoup its investment if the council approved the tax abatements.

Knighton said it’s difficult to calculate the return on investment for a deal like this, but he noted the business may relocate if it doesn’t get the tax abatement. The Hoover facility is in competition with sister operations on the east and west coasts for this expansion, he said.

Helping existing businesses expand is a key part of economic development, Knighton said. That is where most job growth actually occurs, he said. Last year, there were 61 economic development projects in Alabama involving new companies and more than 250 expansion projects by existing companies, he said.

“It’s very important that we pay attention to existing industry,” he said.

If the city of Hoover approves these abatements, the company also may be able to obtain additional tax breaks from the state and free workforce screening, recruiting and training services from the state, Knighton said.

The mayor said he thinks it’s a good proposal because this company is the type of industry that Hoover really wants to recruit. It’s a company people don’t hear about much, but it ships its products all over the world and brings visitors here from all over the world, Brocato said.

This is a small investment to get them to stay in Hoover, he said.