Council approves retail center project

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By Blenda Copeland

The Phenix City Council has given preliminary approval for a third economic development on U.S. Highway 280 using the power of Amendment 772 of the Constitution of Alabama of 1901.

This new project is for a retail center in the area of 2001-2037 U.S. Highway 280 — the plaza where Phenix City’s former K-Mart used to be – the one where China Garden, Papa’s John’s and Dirt Cheap are located.

A May 24 public notice in The Citizen announced a public hearing set for the June 5 council meeting for the purpose of receiving citizen comment on this new project .

This project’s Redevelopment Reimbursement Agreement is between the city and Second Street of Phenix City LLC – the developer that also renovated the property where Planet Fitness now sits.

The agreement will be executed in a similar style as deals the city secured with two other developers: 1) Halpern Enterprises Inc. of Atlanta, Ga. (developing land on a high bluff near Goodwill and McDonald’s that might be ready by mid-year of 2019 for commercial tenants); and 2) Girard Partners LP on Highway 80 (developing Ladonia Commercial Subdivision in Ladonia, which spurred Russell County to file a lawsuit against the City of Phenix City over the city’s exercise of power in the Ladonia police jurisdiction/annexed area).

Regarding this new potential retail center where Dirt Cheap is located, the city held a public hearing and approved a resolution at its meeting Tuesday.

The council also approved in the same meeting a first reading of an ordinance authorizing the issuance of the city’s limited obligation Special Commercial Facilities Revenue Warrant, Series 2018B development agreement – between the city and the retail center’s developer.

Assistant City Manager Steve Smith explained in an interview that the “warrant” is a legal guarantee that the city will make payments to the developer for 10 years — capped at no more than $2.4 million. Smith explained the developer can show the warrant documentation to a financier to help the developer possibly get a lower financing rate.

When asked if this deal is like the city is lending its credit, Smith said, “It doesn’t cost us (the city) anything.”

He said no current city sales tax money will be given up; the tax money the city will split with the developer for 10 years (up to $2.4 million) will come from the new sales tax money the retail center generates.

“We have to share half of the gross,” he clarified — not half the conservative, estimated number of $12,000 in annual sales taxes that the city confidently expects the center to create in annual tax revenue. Thus, if the retail center is successful, the developer “shares” in that success, Smith explained.

The public notice about this project refers to the $2.4 million part of the deal as a “city tax rebate.”

For more details, read The Citizen’s editorial on page 3.

Meanwhile, other economic development plans are forging ahead in Phenix City.

At the council work session June 4, Council Member Vickey Carter Johnson asked for an update about the Ladonia Commercial Subdivision (LCS) and also another development – a steakhouse set to open in Ladonia.

City Attorney Jimmy Graham reminded Johnson the LCS is the one Russell County is currently suing the city about. He said he’d update the council on that matter in executiVe session later (he did so when the public portion of the work session was closed shortly before 4:30 p.m. ET).

In answer to Johnson’s question of whether the steakhouse would fall within her district, city building official Gil Griffith answered that it’s “not exactly in District 2” — it’s in the police jurisdiction. He said there are some outstanding  things the steakhouse developer would have to do, per Jim McKoon’s letter.