The county and city have officially pledged millions of dollars in cash and tax abatements to Wal-Mart Stores, Inc. to aid in the construction of a super-distribution center projected to bring hundreds of jobs to the area.
However, the deal still remains unfinalized as Wal-Mart remains in its “due diligence” phase. In the meantime, the company is evaluating the project but still has a purchasing option through Oct. 20 on the 400 acres of land that would house the facility near the intersection Interstate 10 and McDonald Road.
A representative of Wal-Mart said when the property is purchased, a two-year construction phase could start as early as December and the distribution center could be operational by the end of 2018.
At full operation, Wal-Mart says it would employ 550 full-time workers with an average salary of $16.83 per hour or $35,000 annually. Those numbers will be crucial for the retail giant, as failing to maintain them would void future incentives promised by the county and state.“Some of the other jobs we’ve recruited and brought into the area are great from a tax base standpoint, but they require a four-year degree or a doctorate or some type of special training back that limits them,” Mobile County Commission President Jerry Carl said. “These are 550 jobs that the average person, somebody like myself, could go out there and get.”
To lock down those jobs, the county is parting ways with $2.3 million in cash as an incentive — matching an equal contribution from the City of Mobile. The state is also putting up an additional $4.5 million which means Wal-Mart will be receiving a total cash value of $9.1 million.
However, that’s not all local officials have thrown in to sweeten the pot. The county will also be paving a road from McDonald Road moving westward to the facility to support the projected 600 daily trucks expected to bring goods to the distribution center.
In a separate agreement, the state will also provide an additional $1 million through the Alabama Department of Transportation (ALDOT) that will come from a special highway tax to assist with other infrastructure needs.
According to county attorney Jay Ross, most of those would be coming from APM Terminals LLC at the Port of Mobile. Last summer, the Commission voted unanimously to approve a 10-year extension to tax abatements APM was already receiving to the tune of around $1.9 million.
“(The Alabama State Port Authority) and their staff have just done an incredible job getting things set up and ready for this project,” Carl said. “They have two new cranes that are being put in, and I believe the capability is going to be that they can load one container every 32 seconds or something like that.”
Though the combination of roadwork and cash incentives helped bring Wal-Mart to the table, it will likely be the abatements that keep the retailer around.
On Tuesday, the county approved 20 years of abatements on sales and use taxes and ad valorem taxes that are expected to save the company close to $11.5 million. The state has put together a similar package that would provide $3.8 million in abatements.
Altogether, the roadwork, cash incentives and tax abatements will translate to more than $24 million Wal-Mart could save on its $135 million capital investment in Mobile County — an investment the commission and City Council believe will pay off when the company begins paying an estimated $19,250,000 in annual salaries when it reaches full operation by 2020.
According to Carl, he’s spoken with officials as far away as the United Kingdom who are envious of the position Mobile County is in because the Port and the infrastructure that has been built around it.
“They said, “you’re now on the ledger of all the companies coming out of the Far East,’” he said. “Which kind of opened my eyes to where we go from here as far as other distributors. We’re talking China, Singapore and those countries that ship everything to the west coast. Now they can ship it to Mobile, Alabama.”
However, Mobile still competes with other Port cities on the eastern seaboard and along the Gulf Coast. In this case specifically, Wal-Mart had also considered Savannah, Ga. That competition has led many governing bodies — including the Mobile City Council — to discuss the details of any incentive package in executive sessions until they’re ready to be approved.
As for Carl, he said Mobile currently has an advantage because of its infrastructure location and because it still has the capability to increase the amount of volume moving through the Port from various industries.
“When you’re looking at Houston and Savannah, you’re looking at volume issues. When you’re looking at New Orleans, you’re looking a moving something 22 miles up the Mississippi River,” Carl said. “Here, the stars just lined up. We’re three miles from open water. It’s a friendly community as far as hiring qualified staff. We’re hot right now, so we gotta take advantage of it.”
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