Daphne’s Industrial Development Board (IDB) plans to purchase 30 acres of land near State Highway 181 on Champions Way as part of the first phase of development on a 75-acre, campus-style business park near Daphne High School.
The park, dubbed the Daphne Innovation and Science Complex, will open with three “Class A” office buildings the board hopes will attract technology companies and professional corporations like engineers, law firms, architects, doctors and accountants.
The initial land purchase will cost around $760,000, with approximately $300,000 coming from the board’s funds and the rest from leftover BP oil monies approved for economic development by Gov. Robert Bentley. The land, owned by Fairhope-based The Bills’ LLC No. 2, would need to be annexed into Daphne’s city limits. Councilman Joe Davis III, the city council liaison to the IDB, said the owner has signaled a willingness for the property to be annexed.
On Thursday IDB chairman Toni Fassbender said the board hopes to get the project off the ground without using much, if any, money from the city. Fassbender said the board is funded through the city’s lodging tax revenues.
In January 2014, the city council voted to raise the lodging tax rate from 4 to 6 percent, increasing the city’s total lodging tax rate from 8 to 10 percent, with 4 percent going to the state.
The move also reallocated funds for the recreation department to receive 50 percent, with 32 percent going to bayfront acquisitions and debt service, 13 percent to the IDB and 5 percent to the Downtown Redevelopment Authority. Prior to the changes, the IDB received just 5 percent of lodging tax funds.
“We think we can get the infrastructure done through grants and private partners. We are trying to accomplish this with little cost to the city,” Fassbender said. “There is no project like this in Baldwin County. We are in dire need of Class A office space because we just don’t have any here.”
Fassbender said the board plans to close on the initial land purchase by the end of the year. In the meantime, the board is searching for private partners to take the plan “vertical.” The total cost for the first phase comes to about $2.4 million, with $760,000 for the land purchase and $1.6 million in estimated development costs. The IDB, along with Mayor Dane Haygood, are pursuing U.S. Economic Development Administration grants for infrastructure costs.
Davis said money from the Alabama Department of Transportation could also be available for portions of the project.
“Once we get one building up, the others will quickly follow,” Davis said May 7. “We have worked out a way for us to do the ‘horizontal,’ the land purchase and the installation of infrastructure. When you take that cost out of what a developer wants to do, they are then only responsible for the vertical. We aren’t giving it away, but they are paying a use tax and the industrial board would receive a fee based on occupancy.”
The IDB funded a study by Dr. Semoon Chang of the Gulf Coast Center for Impact Studies which showed the project could bring an estimated 1,521 permanent jobs and $96 million in annual wages to the city. The study estimated the project could generate $207,450 more in annual property taxes for the city.
The project would bring in $2.9 million in tax revenue during construction, with $16.3 million in temporary spending in Daphne, the study suggested, also showing that 75 percent of the companies attracted to the complex would come from outside the area, with 25 percent relocating to the complex from inside Baldwin County.
In a statement, Rep. Bradley Byrne said he believes the complex would be an asset for Daphne and Baldwin County.
“Technology- and science-related jobs are booming and the need for adequate infrastructure and training continues to grow each day,” Byrne said. “Given the convenient location and unique capabilities, I believe the project will allow southwest Alabama to be on the forefront of a growing industry.”
Fassbender said the complex’s proximity to Daphne High School could provide interaction with the school system and private industries for collaborative STEM (Science Technology Engineering Mathematics) programs.
Fassbender also said the IDB believes that the complex will help Daphne appeal to prospective companies looking to locate on the coast. In the past, she said, companies have reached out to the city, but the city had nothing to offer.
Davis said he has heard concerns from residents about the complex exacerbating the already congested traffic on 181 and making it more difficult to get to and from the high school. He said the Eastern Shore MPO’s long-term traffic plans for 181 could fix some of the issues and that Champions Way could easily be turned into a four-lane road.
“Some people always see the glass half empty,” Davis said. “Traffic is not always a bad problem to have. Sometimes it is a sign of success and growth. It is a good challenge that you have to deal with.”
Fassbender said some residents have asked her why the IDB chose to build new buildings on 181,when there are vacant buildings in the city and prime space on U.S. Highway 90.
“We feel like this is the best location possible,” she said. “The land on 90 is more expensive and more hilly. The land we want is primarily flat so it is easier to develop.”
She noted that while the IDB hopes the initial 30-acre purchase and development spurs the need to acquire the remaining 45 acres, she said the city is under no obligation to do so. But she is optimistic that the project will take off after the first building is in place.
“In the next couple of phases we envision offices, buildings, restaurants, shopping, apartments, another college campus,” she said. “There is so much potential to it that is just incredible to think about.”