Northport council approves incentives package for redevelopment – News…

Northport will offer up to $1.5 million in tax incentives to a developer that plans to invest $10 million to redevelop a commercial property next to city hall on McFarland Boulevard.

“This will be an eye-opening experience for anybody that travels or lives in Northport,” District 5 Councilman Jeff Hogg said of the proposed development.

The deal in structured to help recruit new businesses to Northport as well as further a goal of enhancing and redeveloping the city’s retail corridors, Hogg said.

“For the longest time, a lot of people have seen Northport as the metal building shopping center corridor,” he said. “… We want to take pride in our area, and this developer is very much on board with this as well.”

At its regular meeting Monday, the council approved a project redevelopment agreement with North Square Properties LLC, which plans to renovate and improve a 5.5 acre commercial property at 3380 McFarland Boulevard just east of city hall.

The agreement is structured to incentivize the recruitment of new retailers and restaurants which do not currently have locations in Northport.

The developer proposes redeveloping the site into new multi-tenant retail and commercial shopping complex, creating approximately 40,000 square feet of space. In exchange for the incentives, the developer must invest at least $10 million in the project, which will renovate some of the structures and demolishing others to make way for new buildings.

As part of the deal, Northport will provide rebates equal to one-half of the net sales tax revenue generated by the development in excess of an annual threshold of $2.25 million for each fiscal year during the term of the agreement. The rebates paid over the life of the 10-year agreement may not exceed $1.5 million. The commencement date of the agreement will be when the first tenant, other than Planet Fitness, opens for business.

Planet Fitness, which plans to open a gym beside city hall in early 2020, will be among the tenants in the complex, Hogg said.

The annual threshold was determined based on the tax revenues generated by the shopping center historically, Hogg said.

The developer must complete the first phase of the project within two years of the effective date of the agreement. The second phase must be completed within three years.

Demolition of old buildings on the eastern side of the center is scheduled to begin this month, Hogg said.

To incentivize the recruitment of new businesses, the agreement excludes from the threshold sales tax revenues collected from existing businesses on the property or those already in the city that relocate to the renovated property. It also specifically excludes gas stations, convenience stores or fast food restaurants.

City leaders would like to see the development attract retail shopping or new family restaurants.

“That has been our goal from day one: to attract those types of businesses,” Hogg said.

The agreements names casual and fast casual restaurants among the types of eateries eligible for the incentives. The deal uses brands such as Buffalo Wild Wings and P.F. Chang’s Chinese Bistro as examples of potential casual restaurants, and McAlister’s Deli and Panera Bread among the examples of fast casual restaurants.

While the agreement generally will not offer incentives for fast food, it does allow for one free-standing, new-to-market fast food restaurant.

The council’s retail committee and mayor are all actively pursuing new-to-market businesses for Northport, Hogg said.

“We are very excited that a developer sees our vision and wants to carry it out,” he said.

Hogg said the city leaders were glad to see the project underway. The shopping complex was previously part of a larger proposed project that was exploring the possibility of incorporating the Northport city hall site as well.

Beeker Property Group bought the existing shopping center in late 2016, with plans to build a new and updated facility. The company was also previously in negotiations to buy the Northport Civic Center, city hall and Fire Station 1 for $3.5 million after the city put out a request for proposals to develop the site. The council voted to dissolve the agreement with Beeker Property Group in the fall of 2018.

North Square Properties was incorporated in 2016 with Stephen Beeker as its registered agent.

“When we first started the discussion with the developers, they had intentions of taking a look at city hall property and seeing if they could make a bigger development than what is currently there,” Hogg said.

After the due diligence period, the city and the developer determined the larger project wasn’t feasible, Hogg said. Currently, there are no plans to incorporate the city hall site into a larger project, Hogg said.

“At that point, they had to regroup and go a different route,” Hogg said. “That is why that it has taken a little while longer to see it redeveloped.”

 


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