Two economic incentive packages, one for a downtown hotel and the other a new John Deere dealership, will be weighed on Tuesday by the Tuscaloosa City Council.

The council’s finance committee advanced the negotiated proposals last week after more than a month of talks between City Hall and the respective companies.

For the hotel, the committee approved a package totaling $3.5 million in lodging tax rebates, or seven years of these rebates, whichever comes first.

The lodging tax refunds to True North Hotel Group, which is seeking to build an AC Hotels by Marriott in downtown Tuscaloosa, would be 90 percent of taxes collected for the first year and slowly drop to 70 percent of the collected taxes by the seventh year.

“If they don’t perform, they don’t get the abatements,” said City Attorney Glenda Webb.

The city of Tuscaloosa would keep the balance of taxes collected.

Kansas-based True North wants to build an estimated $27 million, 120-room hotel on the former Fire Station No. 1 site on Lurleen B. Wallace Boulevard South between Sixth and Seventh streets.

The company originally had sought $4 million in tax rebates to offset costs associated with placing much of the development’s parking underground.

Additional details of the proposed incentive deal include True North’s requirement to purchase 50 percent of the needed materials within a 20-mile radius of the city and that the company develop the AC Hotel by Marriott, a high-end hotel line that began in 1998 in Madrid, Spain.

Should the company change the hotel brand without the City Council’s consent, the tax abatements could be withheld, officials said.

“I like the structure of the deal and think both sides have reached a really good compromise,” said Mayor Walt Maddox.

For the incentives requested by SunSouth, which operates the current John Deere tractor and equipment dealership on Skyland Boulevard, the finance committee voted to offer up to $150,000 in property tax rebates, or 10 years of rebates, whichever comes first.

The council’s offer would refund 100 percent of the property taxes generated from the company’s new, expanded store at 5017 Skyland Blvd. E.

“We’re actually not losing any revenue because we’re not getting any revenue from it now,” said District 6 City Councilman Eddie Pugh, who represents the area where this business is located.

Marty Howard, president and CEO of SunSouth, initially requested $400,000 in tax rebates to offset site development costs that have pushed the normal costs associated with this type of development to about $700,000.

The company now works out of less than 12,000 square feet at 3610 Skyland Blvd. E. but wants to expand to a new, 28,700-square-foot building in order to add services and jobs.

Additional details of this proposed incentive deal include SunSouth’s requirement to also purchase 50 percent of the needed materials within a 20-mile radius of the city and to annex the location of its new store, which is now under county jurisdiction, into the city limit.

 

Reach Jason Morton at jason.morton@tuscaloosanews.com or 205-722-0200.