Commission approves tax abatement on 4-3 vote

Mayor Pat Thomas said spurring development in east and south Dothan has been difficult, but success is being achieved.

On Tuesday, the commission voted 4-3 to approved a Brownfield Tax Abatement to Institutional Investments Corporation for the construction of Cottonwood Corners, a large retail development at Cottonwood Road and Ross Clark Circle. The development brings the first Publix supermarket to the city.

“In neighborhood meetings, people are very pleased to have this come in,” said Dothan City Commissioner Paul Lee, who represents District 3 where the project will be built. “They are pleased with the convenience this brings.”

The Alabama Brownfield Development Tax Abatement Act of 2004 allows a local government to set aside all mortgage and recording taxes and state and local sales taxes during the construction phase, and ad valorem taxes, except those for education. The 20-year property tax abatement on this 16-acre site is estimated to save the developer $64,000 a year.

It is the city’s second and the state’s third Brownfield. The first was Friend Bank at Ross Clark Circle and West Main. Birmingham also has a Brownfield development.

County officials approved the Publix Brownfield recently, because the development puts back into operation a long-vacant property.

The site currently generates $2,300 in property taxes annually. Dothan Area Chamber of Commerce President Matt Parker said with the tax abatement, the site will generate $41,674 a year, with those funds going to education. After 20 years when the abatement expires, property taxes produced will total about $105,700.

The $16 million project is estimated to create 200 jobs with an estimated annual payroll of $5.8 million.

“We have been striving since I was a child to have major chains locate on the south and east side of town,” Thomas said. “It all starts with an interceptor sewer line put in on the east side, three administrations ago, that led to development on the east side.”

Installing the Goff Creek Interceptor Line enabled the development of neighborhoods, with business destined to follow, he said.

Brownfield status is granted to developers who are putting back into use a site that may have hazardous substances. The cost to clean up such sites can be cost prohibitive for redevelopment; hazardous materials have already been discovered on the site of the former trailer manufacturing plant.

Some officials argued against the tax break, saying some smaller grocers are struggling and this gives Publix an unfair advantage. Sales taxes, however, are not being abated. Day-to-day transactions are taxable.

Developer John Argo of Aronov Realty said construction on Cottonwood Corners, and a second Publix development at U.S. 84 West, will begin by the end of September. Cottonwood Corners, with about 45,000 square feet, will be completed first.

Argo said he was surprised at the discussions because America operates on a free market system. “The market place is competitive,” Argo said, noting that since the project has been announced, Winn Dixie has revamped its four stores in Dothan “It’s great when an existing business ends up better than it was.”

Argo said the biggest advantage to the Brownfield is that it protects the developer against lawsuits from third parties.

Voting to approve the abatement were Thomas, and commissioners Larry Matthews, Paul Lee and Taylor Barbaree.

Speaking against the project, Commissioner Keith Seagle and Kenneth Everett, a candidate for commission in District 3, used the exact same terminology, calling the Brownfield “reverse Robin Hood” whereby something is taken from the poor and given to the rich. They did not specify how the poor would suffer.

Seagle also said certain people get more consideration than others when it comes to development.

Thomas said anyone can apply for the tax abatement. “Any of those local grocers could take advantage of this Brownfield. It could have been one of those (existing) grocers (developing this project). … If there are Brownfield sites in Dothan, the opportunity is there for anybody – not just for out-of-towners.”