County OKs financing plan for Home Depot

Published 5:00 am Monday, October 11, 2004

Lincoln County supervisors put the Home Depot ball in the city’scourt Friday after voting 3-2 for an infrastructure financing planto bring the home improvements store to Brookhaven.

With the vote, the county pledged to cover 28.5 percent ofannual debt service costs on an up to $825,000 bond issue toprovide street, water and sewer and other infrastructure to an11-acre site on Brookway Boulevard. Based on bond issue debtservice estimates of $105,000 a year over 10 years, that would havethe county paying approximately $30,000 a year, which would begenerated by increased ad valorem tax collections from thedeveloped property.

The county’s vote was contingent on the city agreeing to coverthe remaining 71.5 percent. Bases on estimates, that would mean$75,000 year, which the city could cover with property and salestaxes.

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Brookhaven-Lincoln County Chamber of Commerce ExecutiveVice-president Chandler Russ said infrastructure costs could beless than $825,000, but developer Ergon Properties would beresponsible for any costs over that amount. With an option on theproperty running out, Russ said the developers were hoping to moveforward on the project.

“They want to get a response from both boards as quickly aspossible so they can get into construction,” Russ toldsupervisors.

Mayor Bob Massengill, who attended the county meeting, updatedaldermen on the supervisors’ action during a city meeting laterFriday. Aldermen, however, elected to wait until their Oct. 19meeting to make a decision on the Home Depot plan.

“There’s a lot of pros and cons,” said Alderman at large LesBumgarner.

Based on current tax levies and anticipated higher propertyvalues, the county is expected to receive about $42,000 more yearfrom the Home Depot development. The city would be getting about$35,000 more a year in property taxes.

At issue during Friday’s supervisors meeting was how much of theadded property taxes would the county commit to bond issue debtservice.

Instead of 28.5 percent, District Three Supervisor Nolan EarlWilliamson favored only 20 percent, which would be about $21,000.He mentioned Sept. 11, 2001, and the WorldCom collapse in lobbyingfor the county setting aside a larger portion of the propertytaxes.

“There’s always that possibility out there,” Williamsonsaid.

Massengill said the city board would be willing to considerbeing responsible for $75,000 of the debt service.

“I can’t commit for the city. We haven’t voted on it. We haven’tdiscussed it,” Massengill said.

The mayor added, however, that he would not present a proposalin which the city would be responsible for $85,000 to aldermen fortheir consideration. He said the project would be dead withoutsupport from the county.

“Without a commitment from the county, we may as well call themand tell them to look elsewhere,” Massengill said.

Massengill said county residents would be employed at the storeand the county, as well as the city, would benefit from potentialout parcel development around Home Depot. Fifteen acres around thenew store could be developed.

Williamson offered a motion that the county cover 20 percent ofthe bond issue costs. He indicated that percentage would leave inthe county is a better position should expectations not be met.

“That is some protection four or five years down the road,”Williamson said.

The supervisor said his proposal was “more than fair.” Healluded to the city also getting sales tax revenue from thestore.

“They’re covered if they handle their money right,” Williamsonsaid.

District Five Supervisor Gary Walker seconded Williamson’smotion, but it failed 2-3. Williamson said he was not against HomeDepot and acknowledged the need for development.

“You can’t pull a curtain around the city and county if youexpect it to grow,” Williamson said.

District One Supervisor the Rev. Jerry L. Wilson offered amotion on the 28.5 percent support level, pending city approval ofits portion. District Four Supervisor Doug Moak seconded the motionand District Two’s Bobby J. Watts voted for it as well.

“In order for us to keep growing, you’ve got to allow people tocome in,” Wilson said.

Wilson said the competition and the expected 75-100 full andpart time jobs would be good for Brookhaven and Lincoln County.Williamson agreed that competition would be good for citizens, butthere could be some negative impact on businesses.

“Some of these businesses, they’re going to lose some,” saidWilliamson, referring to existing home improvement businesses whoserepresentatives showed up at recent public hearings to protest thetax increment financing plan for the “big-box retailer.”

In updating aldermen later Friday, Massengill reviewed debtservice estimates with the city board.

With the county pledging $30,000 and the city pledging thecity’s $35,000 expected from property taxes, about $40,000 would beleft to come from sales tax collections.

Massengill said the city could realize up to $190,000 a yearfrom its share of sales taxes collections from the development. Hestressed, though, that not all of that total would be newdollars.

“A lot of those dollars are going to come from otherbusinesses,” said Massengill, also referring to businessesrepresented at the public hearings. “That has to be taken intoconsideration.”