Alabaster OKs incentives for Ulta Beauty store
By NEAL WAGNER / Managing Editor
ALABASTER – A new Ulta Beauty store in Alabaster’s South Promenade shopping center came one step closer to reality on Feb. 23, as the City Council approved an incentives package for the store’s developer.
During the meeting, the council voted unanimously to approve an incentives package valued at up to $516,000 over the next five years. The vote came after a public hearing on the matter, during which no residents spoke for or against the incentives.
Ulta Beauty, which currently has stores in Hoover’s Patton Creek shopping center, off U.S. 280 in Brook Highland and in Tuscaloosa, is preparing to open a location in the former maurices location between Dicks Sporting Goods and Best Buy.
The Highway 31/11 LLC development company, which owns the Dicks Sporting Goods property, also owns the former maurices property. The developer is preparing to expand the existing building on the property “by about two-and-a-half times,” making it a 70-foot-wide by 145-foot-deep building, Alabaster City Manager George Henry said previously.
Through the proposed incentives package, Highway 31/11 LLC will receive a rebate on a portion of the sales taxes Ulta generates over $15,000 per year for the first five years the store is open.
Based on average yearly sales tax submissions for similar stores in the area, and because the Ulta store will be considered a redevelopment, the developer will not receive any tax rebates on the first $15,000 in sales taxes Ulta generates each year.
“Since this is a 10 year deal, after the first five years 100 percent of sales tax will come to city,” Henry wrote in an email. “Therefore over the incentive period the city is forecast to receive significantly more in new tax revenue than is going out as incentive.”
After Alabaster receives $15,000 in sales taxes from the store each year, the developer will be rebated 90 percent of sales taxes the store generates in its first three years, 80 percent in the store’s fourth year and 75 percent in the store’s fifth year up to a total value of $516,000. The city’s penny sales tax earmarked for schools is not included in the tax rebates.
The Ulta store is predicted to generate about $120,000 in sales taxes per year.
If Ulta or a similar-sized business does not occupy the building for at least 10 years, Highway 31/11 LLC will be required to repay all sales tax rebates.