Image courtesy of Broad Metro
The proposed second phase of Stadium Trace Village in Hoover, Alabama, would cover 82 acres and include 36 acres of green space.
Hoover City Council members, unsatisfied with an incentive package proposed by Mayor Frank Brocato for the second phase of Stadium Trace Village, have come up with their own plan that is more generous to the developer.
A proposed development agreement released Thursday and scheduled for a vote on Monday would provide up to $30 million in tax incentives for Broad Metro, the development company for Stadium Trace Village. That compares with an incentive plan proposed by Brocato that would have given up to $22 million in tax rebates.
The new proposal also puts a performing arts center back more directly in the mix, offering to pay Broad Metro $2.75 million or the appraised value for 11 acres so the city can build a performing arts center in the second phase of Stadium Trace Village.
The performing arts center originally had been a part of the mayor’s proposal as well, but he separated that part of negotiations from the incentive package in mid-March, saying the city was considering other locations for a performing arts center as well.
The new proposal, introduced by council members Curt Posey and Steve McClinton, doesn’t bind the city to purchase the land for the performing arts center, but it does require the city to make a decision by June 15 of this year.The developer would be bound to clear and grade the land for the performing arts center and have utilities stubbed to the site, as well as driveway access to the site.
If the city buys the property but fails to begin construction of a performing arts center within three years, the developer would have the right to repurchase those 11 acres for the same price and be granted $2 million more in tax rebates.
The council’s new tax incentive proposal, if approved, would include the following terms:
- Broad Metro would receive up to $6 million in non-educational property tax rebates for three properties (Stadium Trace Village Phase 2, new parts of Stadium Trace Village Phase 1, and a third phase of The Village at Brock’s Gap) over 10 years. Those rebates would apply only to property tax revenues that exceed previous property tax revenues for those parcels.
- Broad Metro would receive up to $22 million in sales and lodging tax rebates over 15 years, with the developer receiving 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).
- If the incentive cap of $22 million for sales and lodging tax rebates is not reached within 15 years, the term of the agreement would be extended five more years and the percentage going to the developer would drop to 25% of sales and lodging taxes in Phase 2.
- Sales and lodging tax rebates would not apply for any businesses that relocated to Stadium Trace Village from other parts of Hoover, unless the business was a medical facility or medical service provider, the business owner kept the other location in Hoover open at least two years, or the business operator swore in good faith that it would cease operating the other Hoover location if it did not relocate to Stadium Trace Village.
- The developer would not be allowed to put automobile dealerships, automobile sales, automobile servicing, retail gasoline sales or a truck stop on the property.
- The city would reimburse the developer any permitting fees paid to the city within a year of the effective date of the incentive agreement.
PERFORMANCE-BASED INCENTIVES
Posey and McClinton said the beauty of this proposal is that most of the incentives are tied to performance on the developer’s part. If the developer fails to deliver properties that produce the additional tax revenues for the city, he doesn’t get the incentives.
The only upfront money that would be provided to the developer would be the purchase price for the land for the performing arts center, McClinton said.
Originally, the developer was asking for upfront cash to help build the access road to the second phase of Stadium Trace Village, but the agreement presented Thursday calls for the developer to pay for construction of the access road.
That access road would be constructed in two phases. The first phase would go to a roundabout that leads to the performing arts center deep into the property. The second phase would extend the access road to Brock’s Gap Parkway and potentially provide ancillary roads to Magnolia Trace and Stadium Trace Parkway and a second road connection to the first phase of Stadium Trace Village.
McClinton said the Hoover school system would begin reaping the benefits of increased property value because none of the educational portion of property taxes would be part of the rebate.
McClinton said it’s also important to note that Broad Metro has been negotiating this deal in good faith with the city for more than a year and already spent more than $1 million on the project. Pulling the performing arts center out of the deal or greatly reducing the financial incentives at this point would be wrong, he said. Developer Will Kadish of Broad Metro has proven he can deliver a good product with the first phase of Stadium Trace Village and has been a good partner for the city, McClinton said.
A spokeswoman for Broad Metro said previous offers from the mayor included a $33 million cap in tax breaks, including $25 million in sales and lodging tax rebates and $8 million in property tax rebates. As part of negotiations, Broad Metro countered by lowering the cap on tax breaks by $5 million to $28 million, including $22 million in sales and lodging tax breaks and $6 million in property tax breaks, spokeswoman Audrey Pannell said.
The mayor’s reduction to $22 million in tax breaks came as a surprise to the developer.
Pannell said it’s important to note that Broad Metro will have to pay $250 million to develop the property, including $26 million worth of upfront land and utility costs.
Posey said this incentive package for the second phase of Stadium Trace Village is tied more to performance than the incentive package that was given for the Riverwalk development in Riverchase. That incentive package provided $17.5 million in cash outlays to the developers in the form of a lease payment and prepaid rent to occupy portions of a building in Riverchase, Posey said. The city also is paying for the work to obtain a certificate of need from the state for a surgery center and diagnostics and imaging center in Riverchase, he said.
Posey also said he believes Stadium Trace Village is a better place for a performing arts center than other sites the mayor’s office is considering because Stadium Trace Village already has an established retail and restaurant presence that would complement the performing arts center. Some of the other sites don’t have a retail component to them, and some won’t have it for five to 10 years, he said.
Also, city officials have been promising people a performing arts center for eight years, and Stadium Trace Village provides an opportunity to move forward with it now, Posey said.
McClinton noted that Broad Metro also is helping solve problems it didn’t create. The developer has committed to building 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. 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.
Broad Metro has said the second phase of Stadium Trace Village 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.
Posey and McClinton said they believe they have the votes on the council to pass this incentive package, but not everyone has indicated agreement yet. Posey said it likely will be a fight.
Council President John Lyda last week said if the city went any higher with the value of the incentive package than the mayor’s offer, “we might as well do the development ourselves.” On Thursday night, Lyda said he had not had enough time to review the latest proposal to make up his mind about it. The final written agreement was given to the council by attorneys just about half an hour before the council’s Thursday night work session at 5 p.m., McClinton said.
Efforts to reach other council members for their opinion of the new proposal Thursday night were unsuccessful. The council’s vote is scheduled for its meeting Monday at 6 p.m.
Editor's note: This story was updated on March 30 with comments from Broad Metro spokeswoman Audrey Pannell.
