Corporate welfare… aka… legalized blackmail…. is alive and well in North Alabama. Here's the latest sorry chapter: three businesses at the swanky Bridge Street development in Huntsville are now closed and owe more than ten thousand in back taxes.
The city isn't the only entity left high and dry:
Bayer Properties, the company that manages Bridge Street, refused to comment on the closings or the taxes owed to the county, but Madison County Tax Collector Lynda Hall says this is the first time in over a decade her office may be forced to seize property from the businesses and hold a public auction.
Watercress closed overnight leaving patrons with gift cards wondering how they will get a refund. The answering machine inside the darkened restaurant does not give any indication the business is closed. Tax collectors have attempted for over a week to reach the business owner who has not returned their calls or ours.
No doubt Bayer Properties is just too busy managing the $4 million the city handed over last fall to help it “lure” the Belk department store to Bridge Street from its current location a mile and a half away.
Hey, $4 million is peanuts considering what they wanted from the city in 2010. You see, the developers wanted to attract a “high end department store,” but those were all demanding blackmail money. Macy's wanted $20 million and Nordstrom offered to locate here for the bargain price of $12 million. That's no joke, campers. It's also no laughing matter that some in city government thought it was a good idea!
What a deal… collect sales taxes from customers – and keep them:
The plan under consideration calls for the city to give O&S Holdings 50 percent of any growth in sales taxes at Bridge Street.
(Mayor Tommy) Battle, though, said Huntsville has never before agreed to share sales tax proceeds with a developer. He pointed out that Valley Bend at Jones Farm and many other large retail projects have been successful without local government subsidies.
But Councilman Will Culver, whose district includes Bridge Street, said he supports the financing plan and hopes the city can find a way to make it happen.
“We have to step outside the box and get a little creative,” Culver said.
Culver had to wait a couple of years to “get creative” again, but he was the driving force behind the “Belk Department Store blackmail caper“ last fall.
Meanwhile, neighboring counties are wrestling with their own corporate welfare projects. For years, Decatur Mayor Don Kyle has been working to attract a huge retail development called “Sweetwater” that will be partially funded with $40 million in sales tax rebates. Many question the wisdom of this folly, asking the obvious question:
What makes them think the people of Madison will flock west toward Decatur when they have places galore to shop and when the Lollapalooza of upscale shopping districts in north Alabama, Bridge Street, lies just east of Madison on the western edge of Huntsville? You don't even have to get on I-565 to get there.
Why would people in Huntsville make the trek to Decatur to pay 9 percent sales tax on what they can buy cheaper in their hometown?
That's right. If Mayor Kyle has his way, we'll have two corporate welfare developments fighting over the same wallets. Heavens, it's scary to think how “creative” Councilman Culver might get if that happened.
Although it would be hard to top the chutzpah of the Sweetwater cheerleaders who are asking the Limestone County School System to help fund the project.
It's time to stop this never-ending cycle. Surely the next developer asking for a hand-out will be CBL & Associates, owner of Madison Square Mall. That's the development that Belk is leaving to move to Bridge Street. The aging complex is losing quite a few tenants and wondering how to revitalize:
Less clear is what the loss of Belk two years from now will mean for Madison Square. Davis said owner CBL & Associates recently hired a consultant who specializes in the revitalization of large shopping centers. Open since 1984, Madison Square has about 1 million square feet of retail space.
Davis said he and Battle have had multiple conversations about the mall's future with Michael Lebovitz, CBL's executive vice president for development. Efforts to reach Lebovitz for an interview were not successful.
Who can doubt that the consultant will first suggest that CBL ask for a nice, fat check from the city? After all, they have some outstanding examples to go by.
But how long before our local governments stop playing along with these scams?