The Decatur Daily
By Evan Belanger
Staff Writer
Mayor signs letter of intent with firm to initiate contract negotiations
A proposed development for Decatur’s Limestone County annex south of Alabama 20 and west of Interstate 65 will be called Sweetwater, city officials announced.
Backed by a unanimous City Council, Mayor Don Kyle signed a non-binding letter of intent Monday to initiate formal contract negotiations with a recently formed corporation, Genesis U.S.A. Development.
The group intends to develop 540 acres of Decatur in Limestone County.
To kick-off the development, Genesis officials hope to break ground in June on a 130,000-square-foot Bass Pro Shops and a 300-room hotel and convention center. They said they expect construction to be completed in late 2009 or early 2010.
The $200 million investment is expected to generate roughly 600 service-sector jobs.
Company officials would not identify the hotel company, but said it would be a “major” name. The group’s attorney, Barney Lovelace, said a formal announcement would be made in about a month.
Other planned developments for the property include more than a million square feet of retail space and 800,000 square feet of office and medical space. There are plans for roughly 2,700 residential units and an entertainment venue capable of seating between 5,000 and 8,000 people.
Lovelace estimated it would take eight to 10 years and up to $1.3 billion to develop the property.
Genesis
Composed of roughly 25 investors from across the country, Genesis was formed specifically to pursue the Sweetwater development in Decatur.
“It’s been fun to imagine and dream what a project of this magnitude would mean for Decatur and the rest of North Alabama,” said Gary Glover, a Nashville-based partner in Genesis.
Glover said he and other company officials have been considering Decatur as a development site for about five years. Lovelace declined to release the identities of all the investors.
To help fund the development, the City Council is expected to approve by early summer a series of contracts offering municipal money for access-road construction, utility construction, traffic management and other infrastructure items.
While non-binding, the letter of intent signed by Kyle calls for the city to borrow about $14 million to cover the expense. The bond issue will be paid back through tax revenues generated mainly at the hotel.
Kyle said estimated city revenues from the development are projected at $1.4 million a year, compared to roughly $1 million in annual debt service.
The council is also expected to pass resolutions creating a cooperative district similar to the city’s Downtown Redevelopment Authority.
With members appointed by the council, the group would borrow another $32 million to pay for construction of the Bass Pro. That bond issue would be paid back through sales-tax revenues generated at Bass Pro.
Kyle said the city would not be liable for the $32 million debt.
He said the city’s investment would be well worth the risk since the Sweetwater project also opens up other portions of Decatur’s Limestone annex to future development.
“It’s going to grow and become bigger than, I think, we can even imagine today,” he said.
Controversy
While most city officials expressed excitement over the proposed development Monday, the project could lose the support of Council President Billy Jackson, District 1.
After voting in favor of the letter of intent Monday, Jackson announced he had serious misgivings over the proposed deal and only voted in favor of it because he knew it was non-binding and could still be altered.
He said, while he supports the project, he fears the development could hurt existing businesses in Decatur, decreasing the city’s overall tax revenue. He also said he thought the city should enjoy more benefits from the development.
“I’m not going to stand in the way of progress at this point, but if we can’t get better resolution of these issues, you’ll start to see ‘no’ votes on my behalf,” he said of the future commitments expected to be considered by the council.
That opinion was not shared by Vice-chairman Ronny Russell, District 4, or District 2 Councilman David Bolding. Both said they felt revenue generated from the development would be enough.
“In the past, we’ve been losing our own retail revenues to Huntsville,” Bolding said. “Now, we expect people from Huntsville to come to Decatur to shop.
“We’ll be reversing the trend.”
Lucky St. Pat’s for Limestone
Limestone officials will not have to ante up incentives for the Sweetwater development, but will benefit in many ways since the site is in Decatur-annexed Limestone County.
Commission Chairman David Seibert said the developers have not asked for tax abatements, so the county will get property and sales taxes from the project. The county’s sales tax is 2 percent.
Since a hotel is included, the Greater Limestone County Chamber of Commerce will get lodging taxes. Chamber President Hugh Ball said the state charges 5 percent and Limestone gets a half-percent of that amount.
The city of Athens will benefit from picking up electrical customers. Athens Utilities provides the electricity to that area. If Athens Utilities has to make any line upgrades, or if a new substation is required in the future, the city will pass that cost to developers.
Holly Hollman
Counting the green in Decatur
Officials estimate Decatur’s income to its General Fund from the Sweetwater development will initially be about $1.4 million a year, coming mostly from the new hotel. That includes the following revenue sources:
About $1 million of that money would go annually toward paying off a $14 million bond that the city would use to pay for infrastructure associated with the new development.
The city would not immediately receive sales-tax money from the new Bass Pro Shops. That revenue would be dedicated to paying off a $32 million bond to cover construction costs on the building.
However, the development is expected to have the following fringe benefits for the city: