Council approves tax abatement for new corporate businesses

The Homewood City Council on May 23 voted to approve tax abatements for a development at Shades Valley Lutheran Church, which is leasing portions of their property.

The request was made by Trey Hill and David Silverstein, the developers of the property at 740 Shades Creek Parkway. The group is bringing in The Welch Group and First Bank and asked initially for certain sales tax abatements and 10 years of property tax abatements. The council worked with the developers to get the property tax abatement period down to five years, which equals out to roughly $276,000, according to the developer’s projections. Sales tax abatements for construction materials and fixtures, furniture and equipment is projected to cost about $107,000, Hill said.

The property is currently not producing any revenue, and Hill projected it would bring in roughly $1,150,000 over the next 20 years to the city in various streams of revenue.

Councilor Nick Sims questioned giving more tax abatements especially as the city’s costs of doing their work is increasing due to inflation and other issues. That has led to an increase in projected road maintenance cost and budget amendments, he said.

“Once we start an abatement here and an abatement here for taxes, where do we draw the line?” Sims said.

Sims was one of two council members, along with Melanie Geer, to vote no on the proposal.

Hill told the council the development was expected to bring 89 jobs into the city with the possibility of more jobs being added in the future. The city of Homewood also does not have the occupational tax, unlike the city of Birmingham, where these businesses are relocating from.

Councilor Walter Jones, who chairs the finance committee, said the city gave the incentives because they were currently not receiving any revenue from the site.

“We did look at 10, but I felt like we were negotiating in good faith and came down to the five that we both could live with,” Jones said. 

Council President Alex Wyatt said he agreed with Sims that the city needed to be careful in approving tax incentives and each request for such an agreement should be evaluated on its own merits.

“We have to be careful about these abatements and how many we approve and when they should be approved and when they shouldn’t,” Wyatt said. “Each one has to be viewed on its own with its own distinct characteristics. But we do have to be careful with them.”

The council also approved spending up to $4,000 to add wayfinding signage in the northern section of downtown. The signage will let drivers coming into the city from Birmingham know to bypass downtown Homewood via U.S. 31 south if they are not heading downtown, an effort to curb traffic congestion. Signs will be placed on 18th Street South coming down the mountain, a sign on a pole at 19th Street and another coming in on Red Mountain Expressway prior to reaching 19th Street.

In other business, the council:

Approved a front yard fence variance at 2827 16th Place South

Sent a request for a rear yard fence in the right of way at 1509 Valley Place back to committee for further discussion

Approved sign variances for Rodney Scott’s BBQ and Little Donkey

Pushed the Aug. 22 public hearing for annexation of 314 Happy Lane to Sept. 12

Carried over a request to release a lien at 1117 Hardwick Lane

Contracted with Miss Sims Garden Foundation Inc. to manage Sims Garden

Approved a request to work in the right of way to remove trees adjacent to 1703 Shades Park Drive

Approved a request to work in the right of way to tap storm infrastructure from 305 Morris Boulevard in city’s storm inlet 

Approved grading work in the right of way at Overton Park

Amended an ordinance to accurately reflect land parcels previously requested to be annexed into the city of Homewood per annexation petition

Set a public hearing for consideration of a front yard fence variance at 1568 Berry Road for June 13

Approved The Battery’s liquor license pending no objections from the Homewood Fire Department

Approved a request to fund an emergency storm drain repair at Berry Road

Approved vouchers