Touting what could be “the best view of Mobile’s skyline,” developer Mike Rogers recently thanked city and county officials for their $5 million contribution to “Meridian at The Port” — a $46.5 million, privately owned apartment complex slated for construction downtown.
Rogers, who is co-owner of Rogers & Willard Construction, was addressing Mobile County Commissioners June 13 as they voted 2-1 to contribute $500,000 to the project. County officials followed the lead of the Mobile City Council, which unanimously approved using tax increment financing (TIF) revenue to help fund the project earlier this year.
Though he said $500,000 was “all [the county] could come up with,” Commission President Jerry Carl said a new housing development would help stimulate the ongoing revitalization of the downtown area and “give developers a good reason to come back.”
“I think the county has to do something for the residential community to keep growth from continuing to move to Baldwin County,” Carl said. “This is an easy one, because as I understand it, our half a million dollars is going toward infrastructure for changes to some of roadways down there. So it’ll be spent on something we would have normally funded anyway.”
Though the city approved its own $4.5 million contribution in April, spokesman George Talbot recently explained funds from the downtown TIF zone would “flow primarily to non-city entities” regardless.
Those funds are generated through property taxes collected by the city. The TIF zone was established to help redevelop downtown Mobile by “increasing property values, reducing blight and crime and spurring economic development.” Within the district, property taxes are capped at the millage rates enforced when the zone was established more than two decades ago.
Any additional revenue from an increase in property value has since gone into the TIF fund, and according to Talbot, the Water Street apartments fall “right in the wheelhouse” of what the TIF was suppose to accomplish.
“This project is very consistent with what came forward during the creation of the Map for Mobile,” Talbot said. “Residential development is a thread that’s run through every study of downtown for the past several decades, and this is the single largest residential development we’ve seen in at least 50 years.”
Rogers is working with developer Stewart Speed of Mississippi-based Leaf River Group, and told county officials the project is tentatively scheduled to break ground Aug. 1, and if all goes as planned would be finished by late 2017.
According to Rogers, the five-story building and its 264 apartments would not only help provide housing, but also bring in other retail and support operations while also helping the existing “businesses that are already doing so well in downtown Mobile.”
“I think everyone would agree we haven’t seen the kind of activity we’re currently seeing downtown in many years — certainly not in my lifetime,” he added. “It’s just becoming a better time to be in Mobile.”
In the past, TIF contributions have funded projects at the Battle House Hotel as well as sidewalk and infrastructure improvements along Water Street. The latest contribution to date was the $10 million that helped fund the construction of the RSA Tower in 2003, according to the city’s executive director of finance, Paul Wesch.
Wesch added that much of the funding for the Meridian project was broken down to serve specific purposes that either enhance city assets or will eventually be reimbursed through the increase in property taxes the development would spur over its first five years in business.
“We broke it down into four separate parts to quantify what the city’s benefit would be,” Wesch said. “The largest contribution is being met by the increased level of property taxes that will be paid once the project is complete. That’s almost like a loan from the developer.”
That “loan” makes up $2.1 million of Mobile’s $4.5 million contribution, but Wesch said the city is also reimbursing Leaf River for $1.3 million of sidewalk, drainage and streetlight improvements on public property included in plans for the project.
Another $432,315 is matching the developer’s cost to demolish the old Delchamps warehouse and another blighted structure currently on the property. In order to ensure the building has an “attractive view” from the streets, Wesch said the city was also contributing $1 million to cover a portion of “façade upgrades” to the building.
According to Wesch, one of the specific objectives in the city’s 23-year-old resolution outlining the plans for the TIF district was the creation of a “multi-family residential development overlooking the [Mobile] river.”
“So, that fell right into the city’s lap with the Meridian project,” Wesch said. “This really is something the city has been looking to do for some time.”
When asked, Talbot said this type of assistance from TIF funding “would be available to any developer that came forward,” adding this project was “just the first one that successfully got to this stage.”
As for the county’s half-million dollars, those funds are coming from an Industrial Development Authority account that generates revenue through tobacco taxes. In the past, those funds have been used to subsidize the general fund.
While Carl shared the city’s enthusiasm for throwing financial support behind the residential development, not all of his colleagues on the County Commission felt the same. Commissioner Merceria Ludgood voted against sending county funds to the project, saying she doesn’t “feel like it serves any public purpose.”
“It’s a private development, and a real estate developer typically funds their own projects in order to benefit from them,” she said. “ It does not create jobs. If it was for affordable housing, I could see that, but this is high-end housing. So, I just don’t think it’s an appropriate use of public funds.”