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Phillip Tutor: What a $1 million tax break means to Anniston

Anniston swearing in

The new Anniston City Council, Ward 1, Jay Jenkins, Ward 2 Demetric Roberts, Mayor Jack Draper, Ward 3, Ciara Smith and Ward 4, Millie Harris after taking the Oath of Office for the Anniston City Council at Zinn Park . Photo by Stephen Gross / The Anniston Star

Anniston’s reconfigured City Council — supposedly prone more to maturity than hubris — has authorized up to $1 million in tax incentives in a tantalizing quest to grab economic-development gold.  

The council has no choice, right? 

This is how the game is played. The expectations are clear. Cities don’t land lucrative retail- or industrial-development deals without giving as much as they get, or more. Developers want free (or discounted) land and city-funded sewer lines and politicians who’ll have their backs if, or when, legal disputes arrive. But more than anything, developers want tax breaks.

Cities that don’t offer them don’t win.

“If incentives are not offered,” says Don Hopper, executive director of the Calhoun County Economic Development Council, “it would raise eyebrows with a company.” 

Hopper is as mild-mannered and polite as they come, so I’ll translate. Cities are boxed in. Offer tax breaks or lose.

The EDC, by the way, isn’t involved in this deal. Hopper and his crew spend their time recruiting industries and manufacturers, not groceries and big-box retailers, which Anniston covets. This is Anniston’s compact, and Anniston’s alone, codified this week by a unanimous 5-0 council vote.

Which makes Hopper gloriously oblivious to Anniston’s plans; he doesn’t know what’s up, and he admits as much. But there are few in northeast Alabama better versed in the fine print of tax abatements than he is. And his take is simple: tax abatements are generally low-risk investments cities and counties would be foolish to waste. 

There is risk, though it’s more long-term than immediate. And a wide range of scholars — in economics, in public policy, in social services — openly wonder if six- and seven-figure tax breaks to developers widen the gaps between rich and poor and ultimately fill corporations’ pockets with bloated profits. It’s an argument that wields significant merit.

But remember where we started. Anniston’s council, dreaming of brighter days, must do something, right?

On this, the goal is to inject pizzazz into the beleaguered stretch of Alabama 21 between U.S. 431 and the city’s northern boundary. If you prefer landmarks, it’s the few miles between Top O’ The River, past LaGarde Park, through what remains of Lenlock and up toward Anniston Beach Road.

That stretch isn’t a veritable no-man’s land. (Don’t snicker.) But City Hall has long dreamed of taking advantage of what it does have — land adjacent to McClellan and the opening of Veterans Memorial Parkway — and installing sales-tax generators next door to Lowe’s. 

Birmingham-based Blackwater Development promises to deliver just that. The previous council gave Blackwater 38 acres of land, and the newly elected council has OK’ed a 50-percent rebate on sales taxes from any retailers it puts there, as long as the total doesn’t exceed $1 million.

Let’s dream for a minute.

Developers are notoriously coy, almost to the extreme, but Blackwater’s spokesman has hinted that a “grocer” was interested in the site. The Star’s Tim Lockette has reported that Blackwater has developed sites in other states that included retailers such as Publix, Ulta and Five Below.

Which sounds like what? Oxford Commons, that’s what. Though we’re dreaming, I’m cool on the Publix notion because north Anniston is surrounded by a triangle of Publixes: there’s one in Rainbow City, one in Pell City and one in the aforementioned Commons. 

Publix isn’t McDonald’s. Every corner doesn’t deserve one. And, frankly, truth hurts; Anniston squandered its chance back in the day to land a Publix for Golden Springs, and Oxford was more than willing to accept the twin burdens of a high-end grocer and the sales-tax revenue it bears. 

Hopper, the tax-abatement swami, makes this cogent point. Actually, he makes two. First, any community that’s attractive to developers during the economic slog of the COVID-19 pandemic should consider itself fortunate. And, second, if developers don’t get what they want from a city — if the freebies aren’t duly lucrative — they’ll go somewhere else, and quickly.

Annistonians who care about these matters are right to wonder if retail development near McClellan is the best use of the tax incentives the city is willing to offer. Should those abatements be used elsewhere, perhaps with job-creating industries in west Anniston? Or, put bluntly, is the council mortgaging too much of the city’s future sales-tax revenue — cash a city of Anniston’s dwindling size desperately needs — for a few popular stores alongside Lowe’s?

There is no right, or wrong, answer. 

Just like we don’t know what retailers Blackwater will lure in, we don’t know if the deal is a boondoggle or a steal. But we will.

 

 

Phillip Tutor — ptutor@annistonstar.com — is a Star columnist. Follow him at Twitter.com/PTutor_Star.

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