Council OKs more tax breaks for Stadium Trace Village expansion

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It took at least 3½ years, but developer William Kadish finally got an incentive package approved for future phases of his Stadium Trace Village development at the intersection of Interstate 459 and John Hawkins Parkway.

The Hoover City Council on July 13 voted unanimously to approve a $23 million economic incentive package for the second and third phases of the development, and the council was expected to approve another $5 million in incentives tied to phase one on July 27.

Kadish of the Broad Metro development company already has invested $150 million to develop Stadium Trace Village and plans to spend $200 million more for phase two, said Jim Masingill, the company’s development director.

That’s a combined investment of $350 million and should eventually generate a combined $123 million in annual sales activity and $2 million a year in property taxes for Hoover schools, Masingill said. It also will have created an estimated 750 permanent jobs, and phase two is expected to create 300 or more temporary construction jobs, he said.

But Broad Metro wanted the city’s help to recover some of its development costs. The 147 acres yet to be developed formerly were a coal mine site and likely will take $42 million worth of work to be buildable, City Manager Brian Muenger said.

The City Council agreed to give Broad Metro a $4 million upfront payment to help Kadish pay for stormwater improvements that will help solve a problem of sediment erosion into nearby Scout Lake, plus up to $19 million in breaks related to sales and lodging taxes and construction permit fees.

Broad Metro also was seeking to expand the amount of tax rebates the company received for phase one of Stadium Trace Village from $20 million to $25 million and to get an extra four years to capture that extra $5 million in rebates. That’s the issue that was slated for a vote on July 27.

TAX BREAK DETAILS

The tax breaks approved July 13 included a rebate of 60% of sales taxes received from new development in phases two and three, 75% of lodging taxes from phases two and three, and 75% of construction-related sales taxes and construction permit fees, Muenger said.

The city should be able to recapture the $4 million upfront cash outlay by the fifth year, and the total amount of revenue the city should receive from the development over 20 years is $27.1 million, Muenger said. After 13 years, the city should expect to get 100% of sales and lodging tax revenues, which should amount to about $1.9 million a year, Muenger said.

Additionally, Hoover City Schools should get $24.6 million in new property taxes over 20 years because the value of the land will increase dramatically with all the site improvements and development, Muenger said. And the combined amount of revenue going to all governments (the city, Jefferson County, state and Hoover schools) is projected to be $63.8 million over 20 years.

COUNCIL REASONING

Councilman Steve McClinton, who made the motion to approve the incentive package, said Kadish has proven himself with phase one of Stadium Trace Village and he believes Kadish will do the same good job with phases two and three. The deal is not all about the tax dollars; it’s about the quality of life for Hoover residents, McClinton said.

He was in favor of a tax break package that came to the council two to three years ago that was $54 million but ended up going away because of opposition, and Monday night the deal was down to $23 million, he said.

“The schools will benefit. The residents will benefit. Right now, we’re making like $41,000 a year in taxes off that property, and now it’s going to be completely different,” McClinton said. “It’ll be close to like $24 million after 20 years for the schools. Hoover only has so many places of land that’s available, and that’s one of the few of them right there, and the topography is bad.”

For people who say the city should be more focused on properties like the Riverchase Galleria and Patton Creek, progress is happening on those fronts behind the scenes, McClinton said. Mayor Nick Derzis likely will have something to announce for the Galleria and Patton Creek by the third quarter or early fourth quarter of this year, he said.

“Now you have a council and a mayor who are working together very well and who are very transparent,” McClinton said.

Councilman Gene Smith noted the developer incentives are tied to the development becoming successful over time. Other than the upfront $4 million payment, it has to be successful for the developer to get his money back, and his benefit is capped at a certain level, Smith said. Once he reaches that cap, the city begins to reap the full benefit of those increased tax dollars, he said.

“I think it’s good for everybody, and it’s exceptionally good for the schools,” Smith said. “Once they build on it, the property is going to become even more valuable.”

PUBLIC FEEDBACK

At the July 13 public hearing, some residents praised the developer for the work he did on phase one of Stadium Trace Village and his commitment to clean up stormwater problems that he didn’t create, but others objected to the tax breaks and a proposed road connection to Brock’s Gap Parkway.

Steve Lawrence, treasurer of the Trace Crossings Residential Association, said the association’s board voted to support Broad Metro’s incentive request because they think the development overall will be good for the community.

Stormwater runoff has put 14,000 cubic yards of sediment in Scout Lake, and Broad Metro has committed to fix the erosion problem by building a series of ponds and committed money to dredge Scout Lake, Lawrence said.

Jordan Hosey, another resident and real estate agent, said she doesn’t know of anyone else standing in line to develop old mine land like this and said developments like Stadium Trace Village add value to the community and help increase property values.

The plan for phase two includes a Chasing Aces golf and entertainment center with golfing bays for practice and games, par 3 golf holes, a putting green and baseball batting cages, Masingill said.

There also are plans for an 80,000-square-foot, four-story medical office building to be called South Haven Surgical Plaza and to include a 25-bed outpatient surgery center. Phase two also is proposed to have an independent living, assisted living and memory care facility for people ages 55 and older, a 200-room hotel and other restaurant and retail sites, Masingill said.

Plans for phase three of Stadium Trace Village include 27 acres of “high-end residential” or additional housing for people ages 55 and older, 10 acres of mixed-use space that could include some retail, and other land that could be used for another hotel or other commercial space, Masingill said.

Bill McCanna, a resident of the Chestnut Ridge subdivision in the Trace Crossings community, said he objects to the tax breaks. The council is just giving away tax money it would receive whether this development comes to fruition or not, McCanna said. If the second and third phases of Stadium Trace Village didn’t happen, people would just spend their money elsewhere in Hoover, he said.

Mike Perry, another resident, said it’s easy for the council to give taxpayers’ money away to developers, but he hasn’t seen his taxes go down. “I don’t get any incentive,” he said.

He also noted there are existing commercial centers in Hoover that deserve the city’s attention, such as the Riverchase Galleria, Patton Creek and The Grove shopping centers.

Hoover Council President Casey Middlebrooks said this incentive agreement won’t affect any potential redevelopment deals with Patton Creek or the Galleria. Retail is still strong in Hoover and will continue to be strong, Middlebrooks said. The second and third phases of Stadium Trace Village will have less retail than the first phase and bring amenities like entertainment options and health care services, he said.

ROAD CONCERNS

Numerous residents expressed concerns about Broad Metro’s plan to extend Peridot Place, a main thoroughfare in the first phase of Stadium Trace Village, all the way to Brock’s Gap Parkway. That’s just going to create another cut-through to John Hawkins Parkway and drive additional traffic to Brock’s Gap Parkway, they argued.

Plus, the proposed connection point is at a bad location because it sits on a blind curve with a significant hill, some residents said. There already are accidents there, and this will exacerbate the problem, especially with lots of young drivers headed to and from the nearby Hoover High School, residents said.

Darrell Skipper, a traffic consultant hired by the developer, said a traffic light and turn lanes are proposed to be added on Brock’s Gap Parkway, and the developer plans to clear some trees along Brock’s Gap Parkway to help with sight distances.

Muenger said specific development plans and the design and approval of any road connection would have to be fleshed out in future zoning applications.

The developer, Broad Metro, already was given up to $20 million in sales tax rebates for phase one.

NEW INCENTIVE PACKAGE

The Hoover City Council approved up to $23 million in new incentives for Stadium Trace Village on July 13 and was slated to consider adding $5 million more in incentives for phase one on July 27.

  • $4 million cash to help with stormwater erosion repairs
  • Rebate of 60% sales tax revenues from phases 2 & 3
  • Rebate of 75% of lodging tax revenues
  • Rebate of 100% of $2 nightly room fee
  • Rebate of 75% of construction-related sales taxes & building permit fees
  • Cap of $23 million for all incentives for phases 2 & 3

RETURN ON INVESTMENT

  • City should recoup $4 million investment by Year 5
  • City should gain $27.1 million over 20 years
  • Hoover City Schools gains $24.6 million over 20 years
  • Total tax dollars (including county and state revenue) of $63.8 million over 20 years
  • Developer is spending $200 million more
  • Development to create 750 permanent jobs and 300 temporary construction jobs
  • Community gains new entertainment, health care, hotel, retail amenities
  • Stormwater erosion problem addressed
  • Dilution of traffic on Stadium Trace Parkway

Source: City of Hoover