Hoover council debate over tax incentives gets contentious

A contentious, standing-room-only, three-hour Hoover City Council meeting ended Monday night without a decision about a proposed $30 million tax rebate incentive package for phase two of the Stadium Trace Village development, but there were plenty of fireworks.

Hoover Council President John Lyda called out the developer, William Kadish of the Broad Metro development company, for having a felony conviction in his past and said he didn’t want to do business with a convicted felon.

Kadish in 2002 was convicted of grand larceny, a second-degree felony, in New York and was sentenced to five years of probation and ordered to pay restitution in the amount of $655,035, according to Florida Supreme Court records.

He was disbarred from practice as an attorney in New York in 2002 and in Florida in 2007, with a Florida court record citing a dishonest or selfish motive, a pattern of misconduct and multiple offenses.

Most of Monday night’s council meeting was spent with the mayor, city staff, council members, the developer and residents talking about the merits of a proposed incentive package for phase two of Stadium Trace Village and questions about the impact of the development on nearby neighborhoods.

That debate was lively, but discussions became more heated when Lyda brought up Kadish’s past. Trace Crossings resident David Bannister asked the council if the first phase of Stadium Trace Village was a good development.

Lyda responded by saying that city officials now know things they did not know when tax breaks were approved for the first phase of Stadium Trace Village in 2017 and the timeline for those tax breaks was extended in 2021.

“We are dealing with a convicted felon,” Lyda said Monday night, followed by gasps in the audience. “Had I known then what I know now, I would never have wanted to do business with this man.

“I will not waiver on the values that I have for this city. I may be a dinasour, and if in the next election, if my values which I stand for don’t represent this city, I’ll gladly leave, but I will not waiver when it comes to doing business with a known felon,” Lyda said, followed by applause.

Later in the meeting, when Lyda asked Kadish if he would be willing to meet with residents to discuss their concerns, Kadish attempted to respond to Lyda’s earlier comments, but Lyda would not let Kadish address the matter, asking only for a yes or no answer as to whether he would meet with residents.

He ordered Kadish to sit down, prompting a rebuttal from Councilman Steve McClinton. “You just can’t make an allegation like that and expect him to walk away,” McClinton said. But Lyda refused to let Kadish respond.

Later, Councilman Curt Posey also said he didn’t agree with Lyda’s behavior. “You have to let the man answer an allegation,” Posey said. “You can’t just send him out of the room.”

The council voted to table discussion of the incentive package until the next council meeting. As Kadish left the building, he declined to comment, but later Monday night via text, Kadish responded to Lyda’s comments.

“Tonight’s events were indeed regrettable. They were regrettable for the city of Hoover, for the individuals who planned to invest their time and resources here, and for me personally,” Kadish wrote. “The weaponization of a mistake I made over 23 years ago, aired publicly without affording me the opportunity to provide context or defend myself, was deeply disheartening.

“I have shared my story with thousands of people in confidence because they needed to hear it,” Kadish said. “To have it brought up in this manner is indeed despicable. I intend to share my full story — a narrative marked by pain, redemption and the aspiration that my experiences will serve as a beacon, guiding others away from similar missteps. Once again, it’s unfortunate that tonight took such a turn.”

McClinton said he doesn’t know all the details of Kadish’s past, but everyone has a past. “I’ve got a past, too, and I don’t want folks finding out about it. I’m not the same guy I was 30 years ago.”

Everything he has seen Kadish do has been on the up and up, he said. And this proposed business deal is a good one, he said.

This was not the first time that bad blood between Kadish, Lyda and Brocato bubbled to the surface.

When the mayor in March proposed a $22 million incentive package for Broad Metro instead of what Kadish said was a previous $33 million offer and pulled a proposed city performing arts center out of the incentive negotiations, Kadish said he felt double-crossed by the mayor. The mayor was the one who asked him to put the performing arts center in the development, and he has invested more than 14 months and more than $1 million in phase two already with a good faith agreement that Broad Metro would not have to compete with other sites for the performing arts center, Kadish said.

He said then he believed the mayor and Lyda were acting like dictators and trying to get him to walk about from the deal by lowering the amount of the incentive package.

“John Lyda is the most evil, despicable person I’ve seen in local government,” Kadish said. “The mayor is just weak and dishonest.”

Kadish later apologized for his remarks.

Brocato on Monday night began his remarks by saying he is wholeheartedly in favor of a performing arts center, but it must be done the right way.

Over the past six months, Broad Metro has submitted several letters of intent for a development agreement with tax incentives to help make the second phase of Stadium Trace Village a reality, and there have been more than 16 in-person meetings between the developer and city staff that included “a wide array of creative asks,” Brocato said.

Broad Metro has said the second phase of Stadium Trace Village would, in addition to a potential performing arts center, 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.

Brocato said the city has been consistent in its approach to negotiations, but Broad Metro’s negotiating style has been completely different, with each offer almost starting from scratch with new requests and new demands.

Some of the proposed terms were legally impossible, and some were beneficial to the developer but riskier for the city, he said.

Brocato said discussions began with a $7 million incentive package over 15 years, with the city and developer splitting tax revenues equally, but it ballooned over time to as high as $60 million.

Since July 2023, the city’s internal team has been attempting in good faith to arrive at a meeting of the minds with Broad Metro, but those efforts have been unsuccessful, Brocato said.

The mayor said that in good faith negotiations, “people are treated with dignity and respect, both in word and in deed” and “good form and due process is respected,” and the parties refrain from divisive tactics that are free from propaganda and bias.

“Unfortunately, we have not experienced this in our interactions with Broad Metro,” Brocato said. Some council members, unsatisfied with the mayor’s latest $22 million proposed incentive agreement, amended the agreement to give up to $30 million of tax breaks to Broad Metro and to put the performing arts center back in the deal. That’s the agreement that was before the council Monday night.

Brocato said it’s unprecedented to have a binding development agreement before the council that does not have staff support. “Every staff member involved with the negotiations sees this as an unbalanced deal with high risk for the city,” he said. “I rely and you should rely heavily on their expertise.”

Brocato said Broad Metro launched a public relations campaign to create pressure on elected officials and employees to get their demands met. “This pressure has driven a wedge between all of us who are working together toward a common goal of improving the quality of life of all of our residents,” the mayor said.

The developer’s claim that he already had a deal with the city was not true, and Kadish has been making unkind personal comments that questioned the integrity of the mayor and Lyda’s character, the mayor said.

“I’m not used to doing business like this,” Brocato said. “The staff — they’re not used to doing business like this. The city of Hoover is not used to doing business like this.”

Brocato said he spoke with the mayor of Opelika, where Kadish also is doing a development deal that includes a Golf Suites tiered golf bay and entertainment center, and the incentive package in Opelika is $7.5 million.

Kadish said the Opelika development is different from the one in Hoover because the land in Hoover is much more challenging and more costly to develop.

Brocato claimed that the incentive package the council is considering would cover 100% of the developer’s known costs, but Kadish said that’s not correct. He said the upfront development costs are $26 million, but the entire development, including construction of all the buildings, will cost $250 million.

STAFF COMMENTS

Brocato asked multiple members of his staff to give their assessment of the tax incentive package being considered by the council.

Robert Yeager, the city treasurer and a previous chief financial officer for the city, said most tax incentive packages offered by the city have been a 50/50 split of tax revenues. A few tax break deals, such as those for the Piggly Wiggly in Bluff Park and Riverwalk Village in Riverchase, were different, but those were projects to help redevelop troubled areas, Yeager said.

He believes this deal should be a 50/50 split of tax revenues as well instead of the developer getting 75% of new sales and lodging taxes and 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), he said.

Greg Knighton, the city’s economic development manager, said he doesn’t believe the deal the council is considering is a balanced deal that’s good for the city. It’s more than most incentive packages the city has given, he said.

The City Council in November did, upon recommendation from the mayor and staff, vote 5-2 to approve an economic incentive package that would grant an estimated $25.8 million in tax rebates to the private company doing the Riverwalk Village development in Riverchase, plus up to $16 million in upfront cash payments to help get the project started.

But Riverwalk Village is primarily about health care and an ambulatory surgical center and diagnostics center and is trying to revive an older industrial park, and it is projected to have a $2.5 billion economic impact over 10 years, Knighton said.

While the second phase of Stadium Trace Village is an exciting concept that could boost economic activity and provide more property tax money for schools, higher analysis shows that the amount of incentives sought is too high, Knighton said.

Broad Metro already is getting $20 million in tax breaks over 15 years for the first phase of Stadium Trace Village.

City Planner Mac Martin and City Engineer Chris Reeves said in other cases when tax incentives have been granted, the city typically is further along in talks between city staff and developers about development plans.

Some initial meetings have been held, but no plans have been submitted for a thorough review, Martin said.

Questions remain about geotechnical reports and how much, if any, blasting will need to be done, and an updated traffic study and stormwater drainage plan should be submitted for review, he said.

Reeves said Broad Metro has employed top-notch traffic engineers and site plan engineers, but city staff have not had the opportunity yet to review those plans in detail.

Brocato asked the council to deny the proposed $30 million incentive package or at least postpone consideration until staff has more time to review plans.

Councilman Curt Posey said the mayor seemed ready to move forward with his own incentive package without such reviews being completed, and he didn’t understand why the council’s ideas for incentives should be delayed.

McClinton said Broad Metro and Kadish have proven their worth with the first phase of Stadium Trace Village and noted that the only upfront costs Broad Metro is seeking is $2.75 million for the 11 acres for the performing arts center or the appraised value of that property. All the rest of the incentive money is tax money the city is not already getting, he said.

Meanwhile, the mayor and his staff had no problem giving $16 million cash to Riverwalk Village for upfront development costs, McClinton said.

Jim Massengill, development director for Broad Metro, noted that the 82 acres that make up the second phase of Stadium Trace Village currently are producing $12,500 in property tax revenue for the school system, city, county and state. With this incentive package, the city should get $260,000 a year in property taxes, and the Hoover school system’s property taxes from this property should balloon to $1.8 million per year because none of the education-related property taxes would be waived, but the value of the land will have increased, Massengill said.

Broad Metro also has proposed to spend $2.25 million to build a 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. Residents there have complained about sediment from construction projects upstream muddying up their lakes and said Kadish has been the only one to offer credible solutions.

Numerous residents of the nearby North Ridge and Scout Creek communities voiced objections to the second phase of Stadium Trace Village. Some expressed concerns about blasting, while others feared the development will bring noise and light pollution to an area where they now enjoy seeing woods. Still others voiced concerns about extending the main road through Stadium Trace Village all the way to Brock’s Gap Parkway.

Chestnut Ridge resident Nancy Carr said everyone wants a performing arts center, but she’s not sure this is the right place for it it.

Resident Steve Lawrence said, to him, the incentive package for Stadium Trace Village is a no-brainer. The developer is taking all the risk, and Hoover gets the benefit of increased tax revenues and better control of stormwater runoff and erosion for that drainage basin, he said.

Though during the meeting Lyda said he didn’t want to work with Kadish, after the meeting when talking to media, he said he hopes that within the next couple of weeks, as more details about development plans are revealed and studied, hopefully the gap in negotiations between the two parties can be narrowed.

“Clearly, an agreement that comes before us next time could be different,” Lyda said. “We’ve seen seven letters of intent go back and forth, so we’ll see what comes up.”

But Lyda defended his decision to bring up Kadish’s past.

“I think it’s important for the citizens of Hoover and the city of Hoover to know who we’re doing business with,” he said.

Lyda said this whole process has exposed a gap in city processes when dealing with developers. The city expects city employees to go through criminal background checks and some city employees to go through financial background checks, and “we should expect the same of our developers,” he said.

“We have made some discoveries over the last few days that were incredibly troubling to me as a citizen and to me as a city leader, and it’s my value set that the city should do better in choosing who we’re going to do long-term multimillion-dollar deals with,” Lyda said.

McClinton said if the city is going to that level of scrutiny for developers, it should give the same level of scrutiny to a mayor who abandons a good-faith agreement he made with a developer.

Brocato said city officials really shouldn’t be having these discussions publicly; they should be internal discussions.

Bluff Park resident Robin Schultz said the problem is that the mayor wants the discussions done internally, but people in the public want transparency.

The next Hoover City Council action meeting is scheduled for April 15, with a work session on April 11.

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