Economic incentive agreement with Pig under discussion
The City Council is looking at potential next steps for an agreement with Crestline Piggly Wiggly developers.
In a work session on Dec. 5, the council discussed an economic incentive agreement that could go into effect if they rezone property for the proposed store off Vine Street.
A public hearing regarding the agreement has been scheduled for the Dec. 16 meeting where the council plans to vote on the rezoning.
Council member Billy Pritchard outlined the three primary provisions of the drafted agreement.
First, the developer would convey two pieces of property to the city for $1.2 million after the developer makes improvements to them. These properties are one of two parking lots not currently owned by city, and the “Pig Trail” lots to be acquired from Regions Bank that will act as the access point to the new store from Church Street.
The second provision splits sales tax between the city and the developer at the beginning of the store’s life. For the first five years, the split would be 75 percent/25 percent, and after that the split would be 50/50. The total amount would be capped at $4 million.
The city entered a similar agreement for the Piggly Wiggly at River Run, Publix on Overton Road and Cahaba Village, and all were paid earlier than their 15-year expiration limit. Lane Parke’s expiration for a similar agreement is 20 years.
The funds under discussion would have to be earned by the developer before they receive it, City Attorney Whit Colvin clarified.
The final provision is regarding ad valorem tax, which is also similar to previous agreements. If the store performs better than projected, it has the opportunity to receive a portion of city’s ad valorem tax that could be around $26,000 depending on the property value assessment. The tax abatement provision would end after 15 years.
“All the previous developments have satisfied early, but there is no guarantee this one will,” Steve Boone said. “But the cap protects you in this case.”
At the meeting, council member Jack Carl asked that the language in the agreement explicitly give the city a right to terminate the agreement if the property owner were to change in the future. Pritchard said he was concerned that this stipulation could affect the developer’s ability to get proper financing.
After discussing the issue with both the city and the developer’s attorneys, the council determined that the lawyers would work together to make the language in the document stronger.
An additional provision of the document gives the city an option to purchase the grocery building if it were to cease to operate as a community grocery store. This was not in previous agreements with developers, but Colvin said it seemed appropriate because of the store’s location.
At the end of the discussion, City Clerk/CFO Steve Boone said he was satisfied with the numbers in the document after studying it.
Previous Vine Street Piggly Wiggly coverage: