Mayor proposes $22 million in incentives for Stadium Trace Village Phase 2
Hoover Mayor Frank Brocato on Monday night released a proposed incentive package valued at $22 million for the second phase of the Stadium Trace Village development.
But the developer, Will Kadish of Broad Metro, said it's a bad deal for him and said the mayor double-crossed him.
Brocato's plan would give Broad Metro 50% of retail sales taxes and lodging taxes generated from the second phase of the development over 15 years, up to a maximum of $18.5 million. Broad Metro also would get a 100% rebate of any construction-related sales taxes during construction, up to $3,675,000, for a total of $22,175,000.
Broad Metro has proposed to sell 11 acres to the city for potential use as a performing arts center, but the mayor is proposing to separate that discussion from the incentive package and revisit it in the future, saying the city is evaluating at least four other sites for a performing arts center.
The proposed second phase of Stadium Trace Village also would include 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 with dining space and 1.5 miles of walking and bicycle trails.
The mayor, his economic development staff and Broad Metro have been in negotiations for about a year and a half regarding the second phase of Stadium Trace Village, which in total covers 82 acres.
Brocato said the most recent proposal from Broad Metro asked the city for $34 million worth of incentives, including $3.5 million for road development and $2.75 million for land for the performing arts center.
That proposal also included new incentives related to the first phase of Stadium Trace Village and the third phase of The Village at Brock’s Gap, but Brocato said he was not interested in having the city pay for the road construction or attaching incentives to the other properties. He also did not want to issue rebates for property taxes or permitting fees.
Brocato said he prefers to stick to a more traditional incentive offer that gives rebates over time as the property develops and with less upfront cash commitments. “To get outside what we normally offer is very dangerous,” he said.
Greg Knighton, the city’s economic development manager, noted that the mayor’s proposal would cover 78% of the developer’s known costs of $28,370,000, which is considerably higher than the 20% to 25% of costs that are typically covered by incentives.
However, the second phase of Stadium Trace Village does come with benefits, including $30 million worth of sales taxes, $6 million in lodging taxes and $4 million in property taxes in the first 15 years of operation, Knighton said. Also, Hoover City Schools would receive $15.5 million in property taxes in the first 15 years, he said. Currently, the 82-acre property is producing about $12,500 a year in property taxes, Knighton said.
Brocato said his proposal is “a very lucrative offer” for Broad Metro but noted that the proposed development brings many benefits, including the possibility of space for a performing arts center, the Golf Suites entertainment venue and a $2.25 million stormwater drainage system along Scout Creek and constructed wetlands just above Scout Creek to filter sediment and improve water quality for the lakes in Trace Crossings.
Council President John Lyda said the mayor’s offer is “incredibly generous.” He said it’s outside the norm of what the city normally does but said he hasn’t made up his mind yet as to whether it is too generous. “If we go any higher, we might as well do the development ourselves,” Lyda said.
He does believe the mayor and all seven members of the City Council are committed to opening a performing arts center as one of their top priorities. Finding the best location for residents and taxpayers is the main objective, he said. Lyda noted that some of the other land being offered for a performing arts center would come at no cost to the city.
Councilman Curt Posey, the council’s liaison to the Hoover Arts Council, said that when it comes to performing arts centers, free land is not always best. “It’s about location,” he said.
He believes the second phase of Stadium Trace Village is the right location for a performing arts center. Over time, the “center of Hoover” has been shifting, he said. When he was growing up, it was the Hoover Court shopping center, then it became the Riverchase Galleria, and now a lot of activity is shifting westward, he said. The first phase of Stadium Trace Village has turned into a remarkable destination, and with the Hoover Metropolitan Complex bringing in lots of people, “this is the place to do it.”
Councilman Casey Middlebrooks said he, like the mayor, is uncomfortable putting up money for road development or tying incentives to anything other than the second phase of Stadium Trace Village. He does, however, see a lot of positives with the overall proposed development and believes this is probably the No. 1 site for a performing arts center.
Councilman Steve McClinton said he was disappointed to see the performing arts center pulled out of the mayor’s proposal for now because he would love to see one go in Stadium Trace Village. Developer Will Kadish with Broad Metro has negotiated in good faith with the mayor’s office and is even offering to fix stormwater problems that he didn’t create, McClinton said. Kadish doesn’t make any money off the detention ponds or the 1.5 miles of trails he is proposing, he said.
McClinton said he can understand why Kadish would want to recoup more of his investment upfront and said he thinks the city needs to move expediently to reach a solution for a performing arts center and incentive package.
“The city is not a business. The city is a tax collection agency that provides services with those taxes,” McClinton said. “That piece of land right now is just sitting there with snakes, racoons and mines.”
Kadish expressed frustration with the mayor’s offer and said it’s a bad deal for him. Recouping $18.5 million over 15 years is not the same thing as getting $26 million upfront, he said.
This new proposal from the mayor is a vast departure from the mayor’s previous counterproposals, Kadish said in another interview Tuesday morning. There have been seven letters of intent, and all previous counterproposals have included the performing arts center, and the mayor previously offered $33 million in incentives, he said.
The mayor also previously offered an exclusive deal to Broad Metro for the performing arts center and committed to negotiate in good faith with Broad Metro, Kadish said. To remove the arts center from the deal now is a “double cross,” he said.
He believes the mayor and council president are acting like dictators and want him to walk away from the deal, even though he’s already spent more than $1 million on the second phase of Stadium Trace Village, he said.
“John Lyda is the most evil, despicable person I’ve seen in local government,” Kadish said. “The mayor is just weak and dishonest.”
Kadish said he appreciated questions by the other council members Monday night and looks forward to seeing what they do with the mayor’s offer. They’re good people, he said.
“We’re giving our best effort,” Kadish said. “I’m highly committed to do the right thing and come up with something that works.”
Pat Lynch, a representative for Broad Metro, told the council not to think about it in terms of what they’re giving up but what they would be gaining. Right now, the property is generating just $12,000 or so in property taxes a year, but with the second phase of Stadium Trace Village, the city could get a whole lot more and gain some much desired amenities, he said.
Brocato, in a phone interview after the meeting, said there still are a lot of issues that have to be ironed out.
“This is my proposal,” he said. “I don’t know if the developer will accept it or if the council will accept it.”
Posey said now that council members have the mayor’s proposal, “let’s put that on the next agenda, amend it as we can … and let’s get this done.”
See the full video from Monday night's Hoover City Council meeting on The Hoover Channel's YouTube page.
Editor's note: This story was updated with additional comments from developer Will Kadish in an interview Tuesday morning.