Sales on the Riverchase Galleria campus in Hoover increased by $40 million between 2011 and 2014, new figures released this week by the city of Hoover show. That’s an 11 percent increase over the three-year period, from $375 million to $416 million. It’s also a sign that the Galleria is indeed healthy and that the $120 million or more spent on renovating and redeveloping the Galleria campus in recent years is paying off, Hoover Mayor Gary Ivey said.
Hoover officials are having to document sales tax revenues from the Galleria campus in order to award tax rebates to the company that redeveloped the mall in 2012 and 2013. Riverchase Anchor Acquisition will get a $600,000 sales tax rebate for 2014 as the first installment of a 10-year tax rebate deal approved by the Hoover City Council 3 ½ years ago. The Hoover City Council in October 2011 voted to give the company a tax rebate equal to 50 percent of extra sales tax revenues generated on the Galleria campus after the bulk of the redevelopment project was completed. The tax rebates were to begin 12 months after at least $60 million had been spent on the Galleria campus and the new Von Maur department store had opened. Those goals were accomplished in the fourth quarter of 2013, so Hoover officials tracked sales tax numbers for 2014 to figure the rebate amount for the first year. The rebates will continue for nine more years but cannot exceed a total of $25 million. If sales taxes remain the same as in 2014, the total 10-year rebate would total only $6 million.
Any businesses between Interstate 459 and John Hawkins Parkway, and U.S. 31 and Galleria Boulevard are counted as being on the Galleria campus, whether they are still owned by the developer or not. That includes everything in the mall itself and other businesses such as Costco, Home Depot, Earth Fare, Aveda Institute, Johnny Rockets, Stix, J. Alexander’s, Olive Garden and California Pizza Kitchen. In 2014, businesses on the Galleria campus generated $12.5 million in sales taxes for the city of Hoover, city records show. That’s up from $11.3 million in 2011. The city of Hoover collects 3 cents on every dollar spent. Ivey said the growth in retail sales at the Galleria is due both to the uptick in the economy and the investment that business owners have put into their properties there.
As of August of last year, the Galleria owners – Chicago-based General Growth Properties and Montgomery-based Jim Wilson & Associates — had spent more than $65 million to renovate the mall over the past few years, including $18 million for the Hyatt Regency Birmingham – The Wynfrey Hotel, said Robert Yeager, finance director of the city of Hoover. Their investment spurred at least another $52 million in other renovations and construction by other companies on the Galleria campus, including $33.6 million for the new Von Maur department store, roughly $9 million for renovations at Belk and $5 million for the Earth Fare store, Yeager said.The facelift on the mall is beautiful and should carry it another 20 years into the future, Ivey said.
“It’s just got a lot going on,” he said. “People are starting to come back.”
Also, if anyone was considering building another mall in another city in the Birmingham metro area, this remodeling work at the Galleria likely kept that from happening, Ivey said. He still “absolutely” believes the sales tax rebate for the Galleria was a good thing to do, he said. “Everything they’re getting back is part of new money,” he said. “It’s all part of the increase.” Had the investment in the Galleria property not been made, that increase in sales taxes likely would not have occurred, Ivey said. Anytime you can get people to invest more than $120 million in properties in your city and give them a tax rebate not to exceed $25 million, “that’s a pretty good trade,” Ivey said.
Article by John Anderson,
posted on AL.com March 05, 2015