Bon Secour Village Seeks Tax Deal From Gulf Shores

City invites more detailed proposal for financing more than $30 million in public improvements
Wednesday, April 18, 2007

Published By Mobile Press Register
By RYAN DEZEMBERStaff Reporter
GULF SHORES -- The developers of Bon Secour Village are asking the City Council for help in financing between $30 million and $40 million in roads, sewers and other public improvements planned at the 1,000-acre development, and elected officials said Monday that they'd entertain a more detailed proposal.
David Bodenhamer, formerly Gulf Shores' longtime mayor and now a consultant for the project's developers, told council members that his clients would pay for all the work up front by issuing bonds. But the developers seek some sort of tax rebate with which the debt could be repaid, Bodenhamer said.
Developers of the $500 million mixed-use project, which fronts the Intracoastal Waterway, are Atlanta-based Rick Skelton, Eddie and Josh Canady of Cullman and Clinton Guthrie of Birmingham.

Improvements funded in any deal would be only things that were made public, such as roads, water lines and sewerage, riprap along the Intracoastal Waterway and parks, Bodenhamer said.
"It would seem to me it would certainly qualify for consideration just due to the economic impact that this project proposes," Councilman Philip Harris said. "Especially if our participation was to come from new generated taxes and not funded off our bond issue capacity or our general budget."
Bodenhamer said that the developers wish to recoup sales and property taxes, not including millage designated for schools, to pay off the bonds they would issue.
"Rebating of the sales tax is not a very controversial issue; the property tax issue sometimes gets to be a little more controversial," the former mayor said, adding that local governments frequently offer ad valorem tax abatements in industrial parks to entice tenants.
Among the most expensive public improvements proposed is a new road branching off of Alabama 59 between the former Tommy Thunder's Motorsports Cafe and an unopened city right of way to the north, Bodenhamer said. The road would then curl around the back of the Faulkner State Community College campus, cross a stretch of wetlands via a bridge and then enter the Bon Secour Village property to the south, he said.
Public Works Director Mark Acreman said the city's long-term transportation plan calls for a similar road and at one time several other developers, whose plans in the area have either folded or been delayed, were interested in working with the city to build it. At one point such a stretch was estimated to cost about $12 million, but that price is likely outdated, he said.
Mayor G.W. "Billy" Duke III was absent from Monday's council work session and Councilman Robert Craft said he wouldn't participate in the discussion because of a possible conflict of interest with the developers. But other council members said throughout the course of a 25-minute discussion with Bodenhamer that a deal was worth exploring. Though several large-scale developments have been proposed along the Intracoastal Waterway in recent years, Bon Secour Village is one of few in Gulf Shores to show any tangible signs of progress.
Bodenhamer said a deal would bring much of the planned work to fruition sooner than if it was entirely privately financed.
"I mean we're talking about $30 (million) to $40 million of infrastructure improvements that could be involved here," he said. "So while a developer by themselves could maybe pull that off if they had deep enough pockets, it's a whole lot more viable and accomplishable if you can work with local government.
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"This is basically just an economic catalyst is what it is, just as the project that the city embarked on with Colonial Properties."
In the second part of 2004, the council, still headed by Bodenhamer, negotiated a deal with the developers of Colonial Pinnacle at Craft Farms in which Gulf Shores is buying 42 of the 66 acres the 270,000-square-foot outdoor mall is being built upon. The purchase price -- half paid up front and half to be paid when the mall is built -- is $10 million.
Approved by Baldwin County Circuit Judge Robert Wilters in November 2005, the agreement essentially allows publicly traded Colonial Properties Trust to pay the rent it will owe Gulf Shores with the sales and use tax its shops will generate until the city's bond debt is retired.
The mall deal also includes provisions in which the developers can lease the land long term or buy it back from the city, and provides ad valorem tax savings to the Colonial Properties Trust.
Bon Secour VillageDevelopers of Bon Secour Village, a $500 million mixed-use project under way along the Intracoastal Waterway in Gulf Shores, seek a tax rebate deal with the city that would help pay for more than $30 million in public improvements in and around the 1,000-acre property. This artist's rendering shows an aerial view of the project's town center and marina.