Phenix City moving toward $2.8M financing for grocery store development
By Blenda Copeland
After voting to suspend the rules March 21, the Phenix City Council approved on first reading a $2.8 million financing option to benefit economic development on the south end of town.
This will cement a 10-year commitment from a Birmingham-based grocery business to be the anchor tenant in a planned retail development on U.S. Highway 431 South that city officials announced several weeks ago.
Steve Smith is Phenix City’s finance director, assistant city manager and the city’s utilities director.
In an interview after the council’s meeting, Smith explained the process.
He said a developer will build a “shell” of a building at the retail site, which is on U.S. Highway 431 South across from the Grand Reserve apartments. The developer will lease the retail space to the city. The $2.8 million bond will allow the city to “finish out” the building with air conditioning, lighting, shelving, cash registers and other equipment so the edifice will be “move-in ready” for the tenant, a grocery business called Renfroe’s. Then the city will lease the building to Renfroe’s.
Smith said the debt service on the $2.8 million warrants will be around $300,000 a year, but the expected rent, sales taxes and other revenue sources associated with the retail establishment and others that may come in the future are estimated to by far pay back the warrants.
Smith said the funding mechanism the city is using to obtain the $2.8 million warrants, under Section 772 of the Alabama State Code, is “not something new” and that cities across Alabama have used it to encourage retailers to come to their areas. He also referenced the city’s new Courtyard by Marriott hotel and a retail development on Highway 280 as recent examples involving the city.
As for the future, Smith said he and other city leaders hope securing an anchor tenant for the retail site now opens the door for other retailers to come -- perhaps even a senior citizen housing development, or multi-family development, among others.
The economic development, which as of now, is hoped to open by March 2018, has been much praised by Councilman Arthur Day, who represents District 3, where the new establishment will be located.