If I asked you to give me $1 and in return, I would give you $10, would you do it?
That is precisely the rhetorical-type question the Enterprise City Council faces every time they offer incentives to promote economic and industrial development for our “City of Progress.”
In December of 2004, the state of Alabama passed Amendment 772 providing tools and incentives to use public funds, such as city funds, “to procure and develop industrial and retail sites of industrial and retail projects.” Before this amendment was passed, incentives were used to recruit industry. After it passed, municipalities were allowed to use it to increase retail business as well. It allows our city a way to increase our tax base without having to raise taxes on the citizens.
According to Wiregrass Economic Development Corporation Executive Director Jonathan Tullos, “Some of the criteria used when evaluating 772 projects includes the size of the project, the impact on the community and whether it creates jobs and tax revenue.” Other cities in our area have used these incentives to grow their tax base.
Troy, Andalusia, Slocomb, Ozark and Auburn have all used these incentives to lure retail and restaurant businesses to their cities.
Troy will have a shopping center with Hobby Lobby and TJ Maxx opening this year. Andalusia helped open a Golden Rule BBQ and Grill. Slocomb recruited and won a Jack’s Family Restaurant. Ozark was successful in bringing a Ford dealership to Hwy. 231. Cookout, Krispy Kreme and Starbucks are three projects that qualified for the incentives in Auburn.
For those who think this is free money given to these businesses, think again. They are “incentives,” a way to convince them that this is the right place for them to open their doors or to expand their current business. The money has to be repaid in some form or fashion and there are stipulations as to when the business receives the money. The returns can be staggering over the long haul.
In January 2020, the Enterprise City Council approved $925,000 in incentives for Clark Theatres to expand. Under the agreement, the money would be turned over to Clark upon the project being completed and placed in service. The expansion would have provided more jobs and increased sales tax revenue. But the project never got off the ground because of the pandemic that hit in March 2020 shutting down the theaters, therefore the city never handed over the money even though the cinemas are back up and running. No dirt was ever turned.
At the Jan. 19 Enterprise City Council meeting, the council approved an “incentive” of $400,000 for a Marriott or Hilton brand hotel to be built on the south side of Boll Weevil Circle. They will not receive any money until the building is complete and the doors have been open for 90 days. The city will recover 50 percent of this project before the doors even open and if the hotel doesn’t stay open for three years, all of the money will have to be paid back.
There are visitors who come into town who would rather stay in a Hilton or Marriott property because they collect “points” for future stays. Many times during the year there are no rooms to be had in Enterprise because of graduations at Fort Rucker, ball tournaments, etc. The nearest hotels they can choose from to collect their “points” will be in Ozark or Dothan. Do you really want them to spend their money in another city?
This project alone will provide 20-25 jobs as well as a minimum of over $300,000 annually to be added to the combined property, sales and lodging tax bottom line. The remainder of the money pledged by the city will be paid back in anywhere from 10-23 months. And that’s not all. Out-of-towners staying in the facility will spend countless dollars in local shops, buy gas and food, and add to the sales tax revenues the city collects as well.
There were some in the community who grumbled that the council approved an incentive for a hotel chain instead of a retail establishment.
Why? Why are you not satisfied the council is willing to make offers like this to bring in more revenue? What does it matter if it’s a hotel or a restaurant or a retail chain? Do you want a new recreation and wellness center? Do you want more streets to be repaved? Would you like for your taxes to stay the same or possibly be lowered? How about more money for our schools? All of these things aren’t possible without increased revenue.
Don’t assume the city council suddenly went after a hotel instead of another type business. This is a project that’s been in the works for well over a year. It was put on hold when the pandemic hit in 2020 but was kick-started again after the first of this year.
There are other projects in the works but those announcements can wait for another day. The council and Tullos are constantly looking for ways to increase the city’s revenues and keep money from flowing out to other municipalities.
If you don’t understand the basic economics of the council’s actions, I suggest you attend a council meeting and talk with your councilman. The meetings take place the first and third Tuesday of every month in the council chambers of City Hall at 6 p.m. and are open to the public. Anyone is welcome to address the council during the “Privilege of the Floor” time allotted by the council. If you can’t attend, you can watch the meetings live or archived on the City of Enterprise YouTube channel. Then call your councilman. They work for you. Don’t ever think your question is “dumb.” The “dumbest” questions are the ones not asked.
So, I’ll ask my question again, “If you’ll give me $1, in return I’ll give you $10. Will you do it?”
Caroline Quattlebaum is co-publisher for The Southeast Sun and Daleville Sun-Courier. The opinions of this writer are her own and not the opinion of the paper. She can be reached at (334) 393-2969 or by email at firstname.lastname@example.org.