Pelham OKs Summer Classics tax breaksPublished 10:54pm Monday, July 15, 2013
By NEAL WAGNER / City Editor
The Pelham City Council voted unanimously during its July 15 meeting to approve tax breaks for a company preparing to move into the vacant former Moore Handley building on U.S. 31.
During the meeting, the council agreed to provide a total of about $217,500 in tax breaks to the Summer Classics furniture company, which likely will begin moving into the former Moore Handley building at the end of July.
According to the resolution passed by the council, Pelham leaders agreed to abate a total of about $120,000 worth of ad valorem property taxes over the next eight years, and agreed to abate a total of about $97,500 in construction-related sales and use taxes.
“This is something we tentatively approved a long time ago,” said Council President Rick Hayes, noting the city had to ensure the project was eligible under law to receive tax abatements. “It has passed the test to be approved.”
During the meeting, the council also voted to reduce the project’s purchase price by about $107,000 because of issues – such as electrical and heating, ventilation and air conditioning problems – Summer Classics discovered during its inspection of the former Moore Handley building.
During a May meeting, the council voted to purchase the 30-acre property from the HHH Acquisition company and sell 17 acres to Summer Classics.
Through the agreement, Pelham will loan Summer Classics $3.275 million to purchase the 17 acres. Summer Classics will make mortgage payments to the city to pay the amount back. A portion of the $3.275 million loan will be provided by Shelby County and the county’s Industrial Development Authority.
As a result of the resolution passed on July 15, the city will purchase the property from HHH for about $107,000 less than originally anticipated, and will reduce Summer Classics’ purchase price by the same amount.
“This is a reduction which would simply allow Summer Classics to use the ($107,000) to fix things that were broken,” Hayes said.
Summer Classics has until July 24 to inspect the building, and until July 31 to sign off on the deal to purchase the building.
Summer Classics is looking to eventually employ about 200 at the Pelham facility, which will consolidate several of the company’s current locations.