McKinstry Proposes Tax-Free District After Pate Announcement

TUSCALOOSA, AL. — Hours after Tuscaloosa businessman Stan Pate announced his intentions for the derelict and long-disputed McFarland Mall property, Tuscaloosa City District 7 Councilwoman Sonya McKinstry made a presentation for an economic incentive effort aimed at offering tax abatements for new businesses locating into the area.

The initiative, dubbed Invest 73, would apply to businesses in a one-mile radius of exit 73 at McFarland Boulevard, and offer incentives for businesses willing to invest in exterior renovations and site improvements aimed at redeveloping the entire look and feel of what McKinstry referred to as an important gateway to the city.

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McKinstry's presentation to the Tuscaloosa City Council's finance committee Tuesday followed a long-awaited announcement from the mall property's owner, who told Steve Shannon of 95.3 The Bear that he wants to see the McFarland Mall property redeveloped into a sports complex and regional entertainment district, featuring a skate park, a 1,500-car parking deck, and other space for food trucks, restaurants and retail developments.

"I look forward to bringing all of that information back to you soon," McKinstry said of announcement. "I'm 100% behind it, excited about it. It’s going to be a great opportunity, so good things come to those who wait."

While the finance committee did not take action on the proposal and only listened to a presentation of the incentives, McKinstry insisted the goal of Invest 73 would be to redevelop the area for current business owners and provide attractive offerings for others looking to relocate or open up shop near the corridor.

In terms of requirements for businesses to receive the tax abatements for a minimum of 10 years, existing businesses in the one-mile radius would first need to commit $200,000 or more to exterior renovations, while new businesses would be required to invest $100,000 or more in site improvements.

If implemented, each applicant would first submit a proposal to one of the three council members represented by the proposed district's unique geographical layout and would then makes its way through committee and on to a full Council vote for approval of the abatements for the individual business.

McKinstry pointed out that more than 100 small businesses are currently in the radius, with city data reporting that the area in consideration generates $338 million in gross receipts and $6.8 million in taxes, excluding property taxes.

Tuscaloosa Chief Financial Officer Susan Snowden suggested treating the incentives in the same way the city does hotel incentives, by doing a study of each proposal to see what the individual economic impact would be.

"You’ve got to look at this as an investment in our future," Snowden said.

The proposal also calls for different policy changes, including the addition of a "sunset clause," that would see the program expire after five years unless renewed by the Council, depending on how the area is redeveloped.

Businesses excluded from the program would include: Single-family and multifamily housing developments; Religious/civic organizations; Tobacco/vape shops; Alternative lending institutions; Pawn shops; Adult novelty stores; Package stores and beauty supply stores.

Despite the money lost up-front on tax breaks, McKinstry did point out any new businesses who receive the abatements will still generate money back to the city in the form of property taxes and other regulatory fees.

"We’ve got to take the opportunity to step outside the box," she said. "We’re going to continue to have blighted, undeveloped storefronts. The potential and the need that’s available in other areas has to shift its way here. If we don’t begin to make investments in these areas with such incentives, then it's going to stay in the dismay it's in. This is not a thrown-together proposal, these things have been sought out."

She then said she hopes to continue the discussions for Invest 73 in the Council's finance committee, in hopes of having a floor vote by the first of next year.

"I would hate for us to lose an opportunity in this area because we’ve maxed out in another area," McKinstry said. "It's a new day and we’ve got to think in a different way."

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