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Finance committee recommends tax incentive plan for Milo’s Tea

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With the news that Milo’s Tea is looking to possibly purchase one of the lots that is part of the Barber plant, the city of Homewood’s finance committee unanimously recommended a tax incentive plan to the full council at an Oct. 18 meeting.

Following a lengthy discussion about the facility and Milo’s plans, the committee recommended a 10-year abatement plan that would include 100% of sales and use tax paid to the city for construction-related materials being abated, along with 90% of a portion of property tax dollars due to the city following what Milo’s said would be a $58 million capital investment project to improve the facility, with the other 10% remaining with the city.

The 90-10 split does not affect the current amount of property taxes received by the city on the facility, which is roughly $24,500 annually from both personal and real property tax. The city would continue to receive that amount. The split would only impact any increase to property taxes on top of that amount following any capital improvements made by Milo’s that raise the property value of the facility.

Milo’s would be responsible for the full amount of property tax and sales tax dollars due to Homewood City Schools.

The plant was recommended to be split into two lots by the city’s Planning Commission, with the current owner continuing to make ice cream on one lot and selling the other, potentially to Milo’s Tea, which is separate from Milo’s Restaurants.

A representative from Milo’s said they plan to bring 146 jobs with an average annual salary of $45,000 and fully-funded healthcare, along with other benefits. The company is working on getting all of their facilities zero-waste certified, and a representative said they expect to grow 45% in 2021 in regard to case volume, according to Nielsen data.

Emily Jerkins with the Birmingham Business Alliance told the committee the expected revenue impacts based on their research shows about $340,000 to the general fund over a 13-year period, and $3.1 million to schools, and once the abatement ends, those figures would increase by $100,000 and $150,000, respectively.

Several committee members expressed concern with Milo’s plans to build their own wastewater treatment plan, as other companies have done that in the past and had issues with odors and other problems. Milo’s representatives said they haven’t experienced those issues with similar facilities, including one in Bessemer.

Councilor Melanie Geer asked how much a full 100% abatement would cost the city. Jerkins responded by saying studies show it will cost about $738,000 in sales and use tax and about $1.5 million in property tax over a 10-year period.

Councilor Walter Jones said he was leaning toward an 80-20 split, and said his desire was to both provide a good deal to Milo’s, which was seeking 100% abatement of taxes due to the city, but to also look out for city revenues.

“You’re always going to be looking out for your client,” Jones said. “I’m looking out for my clients.”

Council President Alex Wyatt and Councilor John Hardin both expressed a desire to be pro-business and bring Milo’s to Homewood.

The issue will be brought before the full council on Oct. 25 at 6 p.m.

18th Street Revitalization

The goal is for bids to open in mid-December for the completion of the 18th Street Revitalization project, which will see a signalized pedestrian crossing in front of the post office, along with sidewalks, trees and other aesthetic improvements added to the west side of the street headed toward Valley Avenue.

The project has seen delays, which has frustrated some council members, including Jones, who said it feels like there is always something delaying the project further during the finance committee meeting.

Because the project includes state and federal funds, the Alabama Department of Transportation and the federal government are involved and must give approval. Keith Strickland with Goodwyn Mills Cawood (GMC) said right of way acquisition should be finished this week, and then they’ll wait on federal approval, which should take about 3-4 weeks. A notice to proceed could be signed in January, he said.

“We know there’s been frustration … Homewood’s very important to us,” said Gary Owen with GMC.

Shades Creek Greenway Phase II

The committee also sent a recommendation to the council to approve additional funding for the Shades Creek Greenway Phase II project, in the amount of roughly $11,000.

The project has increased in cost from $600,000 to $1.2 million in total from its beginning, which Jones said was frustrating. 

The city received a letter Sept. 9 from ALDOT stating supplemental fees in the amount of $54,697 were needed, with the city responsible for about $11,000 of that and the rest paid by grant. Jones questioned why it wasn’t brought up during budget hearings, and a GMC representative said their thought was that the money would be carried over from last year’s funds, which did not happen.

In other business, the committee recommended bids for the Lancaster and Saulter roads sidewalk projects be due Nov. 29, and also recommended the creation of two stormwater inlets on Bonita Drive.

Other Committees

Also on Oct. 18, the special issues committee:

The public safety committee:

The public works committee:

The planning and development committee carried over the discussion of proposed changes to the city’s landscaping and tree ordinance to Nov. 1. As the documents are still being tweaked, if the changes are substantial, the public hearing for that issue, currently set for Nov. 8, will be pushed back.

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