By Trent Moore
The Cullman Times
Editor’s Note: City of Cullman officials entered into a new era of economic growth with a deal to give Cullman Shopping Center new life.
A $10 million deal to renovate and expand the Cullman Shopping Center was announced in 2013, along with the city’s first-ever tax sharing agreement to make the project a reality.
Delaware-based Merchants Retail Partners, under the limited liability company MRP Cullman, recently purchased the shopping center from the Morgan family in an approximate $10 million deal. The terms of the agreement reportedly include the purchase of the development, paying off existing creditors and tackling some deferred maintenance to immediately improve the function and look of the facility.
The company plans to fully renovate and restore the existing retail space, then expand the development with new construction on the back side behind Food World. Merchants Retail Partners is also eyeing some new, outparcel restaurants as part of the project.
The U.S. Highway 31 development is currently anchored by major tenants Belk, JC Penney, Books-A-Million and the recently-shuttered Food World.
Developer Bill Leitner, a Birmingham native handing the deal from MRP’s Birmingham office, said his company has a handful of national tenants in talks for the development, with some already locked in to lease agreements. He would not disclose any potential companies due to pending confidentiality agreements. According to Cullman Economic Development Agency statistics, the project could create approximately 600 full- and part-time jobs.
“We’re working with three-to-six national anchor tenants and our vision for Cullman Shopping Center is to do a comprehensive redevelopment of the center and give it a new look and feel,” Leitner told The Times in a previous interview. “Our vision is for this development to anchor downtown and the north-of-downtown corridor. We’re bringing forth a broadened merchandise mix, and that’s a key component.”
CEDA retail recruiter Susie Hood Ashley said the project could play a key role in keeping downtown alive by revitalizing the almost-50-year-old development.
“I’m very pleased that he decided to redevelop the existing center, as opposed to building a new center that would essentially strip the tenants and potentially leave a huge eyesore in our downtown we’ve worked so hard to revitalize,” she said. “This will keep the synergy moving and I think this will be a very integral part of trying to pull some life back towards the center of town.”
Merchants Retail Partners has opened several large-scale developments across the southeast, including the Tiger Town retail development in Opelika. Tiger Town is anchored by big box tenants such as Bed Bath and Beyond, Dick’s Sporting Goods, Kohl’s and Target.
To get the project off the ground the city council approved its first-ever retail tax sharing agreement with MRP.
Under the deal, businesses in the development will still pay sales tax, though the city will pay back some of those funds for a set period of time. One half of the net sales taxes received by the city from new businesses locating in Cullman Shopping Center will be returned for the first three years; one half of the net sales tax received from businesses existing in Cullman Shopping Center will be returned during the first seven years; and the property taxes received during the first 10 years will be returned.
The deal only affects city sales tax (1.75 percent) and does not include education taxes.
Current estimates show those amounts would total approximately $276,000 paid back in existing half-sales tax the first three years, with as much as $800,000 produced (and split) in the subsequent seven years from new development.
As part of the city’s 10-year tax-sharing agreement MRP would also be obligated to invest at least another $10 million to expand and add new, national retail tenants and restaurants.
City officials say the deal could promote local economic and industrial development, increase employment and increase the tax base by retaining existing retail and attracting new businesses.
“It’s important to see the overall project as a positive, not only for the city, but for the area,” city council president Garlan Gudger, Jr. said. “This is a project that could attract 120,000 people, and when there’s approximately 80,000 in the Cullman area, that means there are a lot of people from outside our area coming in, shopping and helping support this community.”
Ashley noted MRP has proven itself a viable developer and she believes the project could be a major catalyst for Cullman.
“This has been in the works a long time, since Mr. Morgan and Mr. Leitner approached us in November, 2010,” she said. “All parties have worked diligently, made several presentations, and different drafts of the agreement have been reviewed as it evolved. We’ve done our due diligence, and he has proven to be very credible and credit-worthy. I can only hope the council comes to a decision and it's the best decision for Cullman, whatever they see as the best for Cullman.”
Trent Moore can be reached by e-mail at firstname.lastname@example.org, or by telephone at 734-2131, ext. 220.