Home Depot finance plan OK’d 7-0

Published 5:00 am Wednesday, October 20, 2004

Developers anticipated construction of a Home Depot beginningaround the first of the year after Brookhaven aldermen votedTuesday in favor of an infrastructure financing plan for theproject.

The tax increment financing plan approved last night was amongseveral motions related to the proposed 11-acre development onBrookway Boulevard. All the votes were unanimous, although someofficials voiced concerns about those who will be competing againstthe home improvements giant.

“I have a lot of empathy for the businesses that are existing,”said Alderman at large Les Bumgarner, who also pointed out that 70other state communities have done TIF plans to help their areasgrow. “If we don’t do this, I think we’re missing the boat.”

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Ward Two Alderman Terry Bates said the measure will not meanraising taxes. Additional city and county property and sales taxesgenerated by the development will be pledged toward debt service onan up to $825,000 bond issue to provide a street, water and sewerand other infrastructure for the project.

“This is one thing that will take care of itself over theyears,” Bates said.

If Home Depot stays in Brookhaven only six or seven years andcloses, then the city will have made a “big mistake” in approvingthe TIF plan, Bumgarner said. However, he indicated there could bebig benefits if the business stays 20 years or more and helps spurother development.

“I hope they stay and help to grow the town,” Bumgarnersaid.

Ward One Alderman Dorsey Cameron mentioned competing businessesthat were represented at public hearings on the TIF plans. He alsoalluded to comments from others who were not at the hearings.

“You talk to citizens, county and city, they’re in approval ofHome Depot coming,” Cameron said.

Earlier this month, Lincoln County supervisors approved similarredevelopment and TIF plans for the county’s support of theproject.

While those votes were unanimous, supervisors voted 3-2 insupport of a plan to have the county be responsible for 21.5percent of bond issue debt service costs and the city beingresponsible for the remaining 71.5 percent. Some supervisorsfavored setting aside more of the anticipated additional propertytax revenue for county use.

With yearly debt service costs of around $105,000, the countywould be responsible for up to $30,000 and the city the remaining$75,000. Mayor Bob Massengill pointed out that the county wouldonly receive property tax revenue from the development while thecity will get property and sales tax.

“The city has the upside of the sales tax,” Massengill said.

Additional tax revenue is expected to be more than sufficient tocover debt service costs. Any development costs more than $825,000would be paid for by developer Ergon Properties, officialssaid.

One expense the developer is covering is a new water tank. Anestimated 150,000 tank is needed to address water pressure andrelated issues.

“The current capacity couldn’t meet their fire-suppressionneeds,” Jim DeFoe, Ergon vice president, told aldermen Tuesdaynight.

Water tank costs were not yet known, but DeFoe estimated theycould be up to $150,000. Bumgarner said Ergon’s commitment on thetank helped persuade him to support the project.

“I felt like they’re putting something on the table also,”Bumgarner said.

The bond issue will not actually be done until next year afterthe site is developed and ready to be turned over to Home Depot,City Attorney Joe Fernald said. The bond issue would reimburseErgon at that time.

“They’re going to be spending all the money up front,” Fernaldsaid.

Following the city board votes, DeFoe complimented the board andsaid the project could not have been done without city and countyhelp.

“I think you’ll be very pleased with what Home Depot does in thecommunity,” said Defoe, mentioning the company’s civic involvementand potential upside for spurring other development around thestore.

After the meeting, DeFoe estimated construction of the storewould start around the first of the year after Ergon addresses afew remaining topics with Home Depot officials.

“We’ve still got some hoops to go through with Home Depot,” saidDefoe, mentioning the water tank, utilities and some otherissues.

The construction period has been estimated at around eightmonths. However, due to other store-related issues, developers didnot venture an estimate on when a grand opening would be.

In a related matter, engineer Scott Armstrong, presented alayout for the proposed commercial subdivision where Home Depotwill be located. The layout is expected to be presented to theBrookhaven Planning Commission and then acted upon at the next cityboard meeting.