Hoover council to consider $1 million tax abatement for information technology company Monday

The Hoover City Council on Monday will consider whether to give nearly $1 million worth of tax abatements to another company looking to bring a corporate headquarters to the city.

City leaders are not disclosing the name of the company until Monday, but Hoover Mayor Frank Brocato described it as a large information technology company.

City Treasurer Robert Yeager said the company plans to spend about $12.5 million to purchase a nearly empty building in the Shelby County part of Hoover and renovate it to serve as a corporate headquarters for the company.

The company already employs about 300 people at its current corporate headquarters and plans to add about 300 more employees at its headquarters facility by consolidating operations from other locations, Yeager said.

The average pay of employees will be $95,000 to $100,000, so “it will bring in a tremendous amount of salaries into the local economy,” Yeager said.

The company plans to spend about $6.5 million to purchase land and/or buildings and about $5 million to either expand buildings or add new ones, according to a tax abatement application filed with the city. The company also plans to spend about $950,000 for office equipment, computers and non-manufacturing machinery, the application indicates.

To help with the relocation effort, the company is asking the city of Hoover 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, 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 also stressed that the company would pay all property taxes devoted to education, so schools would not lose out on any money with this deal.

Within five years of opening, this company should be one of the largest science, technology, engineering and math companies in the state, Yeager said.

“We’re very excited about it,” he said. “In the scheme of things, it’s not a lot of money out of Hoover’s pocket, but it’s a great addition to the Hoover economy.”

Derrick Murphy, chairman of the City Council’s Economic Development Committee, said he considers this to be a very good deal for the city.

The best part about it is that a technology company that pays its employees well will be bringing hundreds of new jobs from other states into Alabama and into Hoover. That means more people spending money and doing business in the city, he said.

If approved on Monday, this would be the second tax abatement approved by the Hoover City Council within a month. The council on Nov. 7 agreed to abate about $1.7 million of property and sales taxes to assist IberiaBank with the creation of a regional headquarters in the International Park office complex off Acton Road. Read more about that tax abatement deal here.

In other business Monday, the council plans to consider a resolution to authorize the mayor to apply for a grant for a $764,215 project to add sidewalks on property around the Hoover Public Library, including along portions of U.S. 31, Municipal Drive and Municipal Lane.

The project also would involve taking down the hill that prevents people driving south on U.S. 31 from seeing the library and adding new landscaping in that area, said Tim Westhoven, the city’s chief operations officer.

The city of Hoover would have to provide 20 percent of the money for the project, Westhoven said.