Mayor attempts to clarify latest tax incentive proposal for Stadium Trace Village

Hoover Mayor Frank Brocato on Monday night emphasized that a draft tax incentive agreement for Stadium Trace Village that he sent to the City Council last week was not actually his proposal.

But at least one council member disagrees.

The mayor said he took a proposed tax incentive plan that had been sent to the city by the development company, Broad Metro, and made adjustments to it in an attempt to protect the city.

According to the mayor, the proposal that came from Broad Metro — and that the council has been considering against the mayor’s advice — was extremely one-sided, lacking in safeguards for the city and obligated the city to provide a huge financial commitment to Broad Metro in return for its development.

Because some — and possibly a majority — of the council were proceeding with a document put together by the development company, the mayor said he consulted with some council members and the city attorney and proposed some adjustments.

“We’re working through it and trying to get to a point where it’s going to be fair to the city of Hoover,” Brocato said. “We’ll see what the council puts on the agenda.

“They’ve been very eager to back up all of Broad Metro’s spokespeople, but it seems that some on the council are not as eager to back up our city employees who have been doing this for 30 years. Instead of reading in the paper how much money a developer needs to make, I’d love for someone to step up and say, ‘Who’s looking out for the city of Hoover?’ I’m looking out for the city of Hoover, and there are others up there that are looking out for them as well.”

Brocato maintains that the proposal he emailed to the council on April 10 was not actually his proposal or a new proposal, but Councilman Curt Posey said it actually is a new proposal.

Many of the modifications the mayor added into the document were changes that Councilwoman Khristi Driver, an attorney, already had incorporated into the agreement that was before the council on April 6, Posey said.

But there is a big, fundamental change in the terms of the tax incentives that make the latest document from the mayor very different from the document that the council already has before it, Posey said.

The council’s document would give the developer 75% of sales and lodging tax revenues for 15 years, 100% of construction-related sales taxes over 15 years for property in Stadium Trace Village Phase 2 and 100% of sales and lodging taxes over 10 years for the new parts of Stadium Trace Village Phase 1 (such as the Village Green and hotel properties).

The document sent last week by the mayor would give the developer 50% (not 75%) of sales and lodging tax revenues for 15 years and 100% of construction-related sales taxes over 15 years for property in Stadium Trace Village Phase 2, and it would not provide a sales and lodging tax rebate for the new parts of Stadium Trace Village Phase 1.

Because the second phase of Stadium Trace Village is expected to bring in only about $2 million in new sales and lodging taxes per year, it’s extremely unlikely the developer would get close to the $28 million cap that is proposed and be able to recoup his development costs, Posey said.

With the city getting half of sales and lodging tax revenues, the developer would only gain $15 million in sales and lodging tax revenue, plus potentially $6 million in property tax rebates for a total of $21 million, Posey said.

Broad Metro’s upfront development costs are expected to be about $26 million, and total development costs should be $250 million, Kadish has said.

Posey said “it is a new proposal, whether he [the mayor] believes it or not.” But as of right now, the document forwarded by the mayor is not the one on the council agenda set for May 6, Posey said.

The second phase of Stadium Trace Village is proposed to include a 1,000-seat performing arts center to be owned and operated by the city, a Golf Suites tiered golf bay and entertainment center similar to Top Golf, a 25-bed surgical center, four medical office buildings, a 120,000-square-foot furniture store and 1.5 miles of walking and bicycle trails.

The primary debate between the mayor and council thus far is about the appropriate amount of tax breaks.

See the full video from Monday night's Hoover City Council meeting on The Hoover Channel's YouTube page.