Gulf Shores Approves New Medical Facility

Retail, medical facilities approved

Thursday, May 17, 2007
Published by Mobile Press Register
By RYAN DEZEMBERStaff Reporter

GULF SHORES -- In separate votes this week, the City Council approved architectural designs and a $20 million revenue-sharing agreement that will lead to development of a medical center and outdoor mall on a tract north of the Intracoastal Waterway.
The deal with Colonial Properties Trust is the second the council has agreed to in the last three years with the publicly traded Birmingham company. The plan calls for a 60,000-square-foot medical complex and 255,000-square-foot shopping center.
The first, approved by a Baldwin County Circuit judge in late 2005, led to the partially completed 270,000-square-foot mall called Colonial Pinnacle at Craft Farms on the north side of Baldwin County 4. In that agreement the city essentially bought for $10 million much of the developer's land and leased it back to the company.
Now, in a deal similar to the one that spurred development of AIG Baker's The Wharf in Orange Beach, Gulf Shores will allow Colonial Properties to recoup up to $20 million of the sales tax generated by the proposed mall, called Colonial Promenade. Starting as soon as the first retailer opens, the company will be refunded 75 percent of the sales tax the development creates annually up to $2 million a year.
The deal will expire when either 10 years have elapsed or Colonial has recouped $20 million.
On Monday the council unanimously adopted a resolution outlining the main components of the deal. According to the resolution, the $43 million development must be of a similar quality, both in architecture and tenants, to the Target- and Cobb Theater-anchored Colonial Pinnacle project across the street.
A committee of three council members -- Carolyn Doughty, Philip Harris and Steve Jones -- will work with the developers to craft the final agreement and monitor leasing to ensure that the company lives up to its promise to deliver top-tied national retailers, Mayor G.W. "Billy" Duke III said.
"The good thing about it is it's all new tax, tax we don't already have," Duke said. "They're not exempt from property tax, they're not exempt from permits."
Paul Glascock, Colonial Properties' developer on the project, said his company would like to begin construction on the mall early next year and have retailers open by summer 2009.
"We're very bullish on Gulf Shores right now," Glascock said. "We feel we are a creating a very substantial retail center and what will be a big employer, a big economic engine and a sales tax generator."
The property, 37.5 acres arranged in a backward "L" shape at the southeast corner of Baldwin County 4 and Alabama 59, sits at the nexus of northern Gulf Shores. The medical center is planned for a four-acre parcel at the tract's middle while retailers will be arranged around it, Glascock said.
Colonial Properties sold the four acres to Birmingham's Johnson Development, which will build the $15 million medical center and lease the facility to Sacred Heart Health System, said Mike Burke, a Sacred Heart spokesman.
The Pensacola hospital, part of the nation's largest nonprofit healthcare provider, Ascension Health, plans to break ground on its facility later this month and open it early 2008, Burke said. The facility will feature physicians' offices, labs and diagnostic imaging services and be similar to other medical centers Sacred Heart operates in the Panhandle cities of Destin, Pensacola and Pace, according to a news release.
And if Sacred Heart wins state approval, the facility will also include an 8,000-square-foot outpatient surgery center. Sacred Heart and eight local surgeons have applied with the State Health Planning and Development Agency to build the surgery center.
They may face difficulty proving to state regulators though that the facility is needed after a Montgomery County judge in April cleared the way for Mobile's Infirmary Health System to move one of its Eastern Shore surgery centers to Gulf Shores.