FORT PAYNE, Ala. — Mayor Larry Chesser signed an agreement this week on behalf of the city of Fort Payne that will generate an estimated $8-12 million per year in taxable retail sales in the city. The Fort Payne City Council authorized Chesser Tuesday night to enter an agreement with commercial development company, Second Street Plaza, LLC, (SSP) to re-develop the former K-Mart building and surrounding property near the Fort Payne South exit off of I-59.
What is still being called “the old K-Mart building” will soon become “The Crossroads at Fort Payne.” According to the agreement, the 80,000 sq ft building will be divided to accommodate four separate retail businesses. The agreement requires the property be occupied by new businesses only, not allowing relocation of existing Fort Payne businesses to the retail space.
The Crossroads at Fort Payne is expected to generate significant tax revenues for the city and the redevelopment of the property ensures that the key commercial retail space will no longer sit empty or deteriorate beyond repair. According to the agreement, SSP will develop the property and cover all the initial costs of construction and renovation on the front end. In return the Mississippi company will require an eventual “city assistance” or payment via shared taxes of roughly $2 million. Accordingly, once construction is completed and tenants are in place, the city of Fort Payne will split retail sales tax revenues with SSP (excluding tax dollars earmarked for local schools)—each receiving 3 percent—until the $2 million in city assistance is paid back to SSP as tax revenues are generated over time.
SSP has developed a number of properties in Alabama similar to the K-mart building with successful projects in Leeds, Pell City and Scottsboro. A second phase of the project will begin after the four retail spaces are filled, with construction of an additional 15,000-20,000 sq ft of retail space in the currently empty grassy patch of land within the property that lies opposite Huddle House restaurant.
The total estimated cost of the development is $5 million to $10 million, several times the cost of the proposed $2 million in city assistance Fort Payne will eventually begin paying out to SSP when the development is fully operational and generating tax revenues. Even at the onset while tax dollars are being split between the city and the developer, The Crossroads at Fort Payne is still expected to generate well over $100,000 in tax revenues until the $2 million is repaid to SSP at which time the city will begin taking in the full estimated $200,000 with no further financial obligations to the developer.
