MADISON, Ala. (WHNT) - Retail development for the City of Madison got a boost Wednesday after the Madison County Commission approved Tax Improvement District for about 700 acres between Zierdt Road and Wall Triana.
The agreement supports the developer who plans to invest his own money for infrastructure improvements, including ramps connecting to Interstate 565. The developer is Louis Breland, but the 700 acres also includes Intergraph property to assist the company with future development after its new headquarters is finished this year.
"This is a situation where he's going to invest up to $22 million for this development and the success of it is all dependent on whether he gets the retailers to come here," explains District 2 Commissioner Steve Haraway, who represents the Madison area.
It's called the Town Madison Cooperative District. The primary retail development will occur on about 100 acres where Zierdt and I-565 meet.
The initial retail center is projected to generate $2 to $3 million in sales and improved property taxes, he said.
The Tax Improvement District is similar to Tax Increment Financing (TIF), except it allows for smaller areas. It also allows sales tax revenue as well as ad valorem taxes from the district to repay money borrowed for the development. TIFs only allow ad valorem tax reimbursements. Huntsville did the same type of district to facilitate the $1 billion investment into Redstone Gateway covering 468 acres of federal land on Rideout Road near the arsenal's busy Gate 9.
The agreement also allows the developer to earn 10 percent interest off the 20-year bond.
That amount seemed excessive to District 1 Commissioner Roger Jones, who said he was uncomfortable allowing the developer to make that much profit compared to the 3 to 5 percent range for most bonds.
"This is something that really bothers me and I would like for that to be explained," Jones stated during the commission meeting. "I just think it has a bad odor to it."
District 6 Commissioner Bob Harrison defended the agreement, saying that Breland is assuming all the financial risks.
"That would have an overall benefit to the community - it's something that's to the good of all of us," Harrison told Jones.
"Basically there's nothing the city or county is held liable for - it's only based on revenue that's generated throughout the development of this property," Haraway countered. "It's good for this whole area - western Madison County is growing and it's exciting to se what all is happening."
This project has been touted as bringing much-needed revenue to Madison, and the improvement district can speed up progress that might have had to wait for a new I-565 interchange at Zierdt Road.
Conservative estimates also show Town Madison generating $1.2 million annually for the county school system and about $2 million for all three school districts combined. The school tax money will not be deferred to the improvement district.
The state has already approved $12 million ATRIP funds for extending Kellner Road to create a new commercial/retail corridor.