The Mobile City Council is weighing a long-term sales tax incentive package aimed at helping a developer finish rebuilding a west Mobile shopping center where an outdoor retailer is preparing to open later this year.
The proposed 15-year arrangement with the company overseeing Westwood Plaza would return a share of sales taxes collected at the site once revenue climbs above 140 percent of what the property generated back in 2013, a baseline of roughly 795,000 dollars. At that threshold, the annual rebate ceiling starts near 1.1 million dollars, assuming the local sales tax rate holds at 5 percent.
Under the terms being considered, the developer could collect rebates up to a combined 4.75 million dollars over the first seven years, or until that seven-year mark passes, whichever happens first. After that point, the yearly rebate cap drops to 450,000 dollars for the remainder of the 15-year term, capping total payments at 9.25 million dollars. If sales tax collections in any year fall short of roughly 1.1 million dollars, no rebate would be paid that year.
The agreement also requires that at least 80 percent of the shopping center tenant roster be made up of retailers new to Mobile. Falling short of that mark would pause the incentive until the requirement is met. In exchange for the tax break, the city would cover up to 250,000 dollars in road work, including a new turn lane near the property and relocation of a traffic signal at a nearby intersection.
The rebuilt center, long anchored by a large home and crafts retailer, is expanding by around 168,000 square feet. Additional tenants slated to join include a sandwich shop, a bar and grill, a home decor chain and a doughnut shop, alongside existing anchor stores. The developer says the project represents an investment of more than 25 million dollars and is expected to be finished by the end of 2016.
The project path to the council has not been entirely smooth. Earlier this year, a council member representing the west Mobile district where the center sits raised concerns about a proposed user fee that would have tacked an extra percentage point onto purchases made at the shopping center for its first several years, on top of existing sales tax. That fee has since been dropped from the proposal, though the council member has said she wanted to review the final terms closely before offering public support.
The developer has called the arrangement mutually beneficial, saying the project will bring more than 300 new jobs and over 100,000 square feet of additional retail space to the area, while attracting several retailers with no prior presence in Mobile.
The council was expected to take up the incentive agreement at its regular Tuesday session, following a morning pre-conference meeting.