McGowin Developers Get $1.2 million in Sales Tax in First 10 Months


McGowin Park has been a popular place with shopper since its first stores opened a year ago, but the jury is still out on whether government tax breaks given to the Chattanooga based company to develop the project were a good idea.

Paul Wesch is the City’s Finance Director and is diplomatic about the deal, refusing to criticize it.

“You know this was done before the current administration,” Wesch said.

The agreement called for developers to keep 28-percent of all city sales tax revenue collected at McGowin Park for 20 years.

In the first ten months at McGowin Park – June 2015 thru March 2016 – the city’s 5-percent sales tax generated more than 3.7 million-dollars. The City, however, kept only 72-percent of that, with 28-percent, or more than a million dollars, going to the developer.

Many stores at McGowin have only been open a few months and there are still vacancies, so the checks going to the developer will continue to rise.

“You know we know it’s going to get into the range in the multiple millions of dollars a year in rebates,” said Wesch.

Still isn’t the city is up almost three million in sales tax from a year-or-so ago when McGowin Park was just a bunch of trees?Not necessarily. Take Costco. It is a unique store to the area and is McGowin’s main draw. But since it’s been open, tax revenue collected at its major competitor two miles away is down.

“Costco’s has had a negative impact on Sam’s,” Wesch said.

Sam’s has seen a 10-15 percent reduction, according to a city spokesperson.  Remember the city keeps its entire 5-percent tax at Springdale Mall where Sam’s is, but is giving up 28-percent of what it collects at McGowin. Additionally, two major stores, Best Buy and Old Navy have shutdown at Springdale and relocated to McGowin where the City keeps less of the tax. Ross moved from the Festival Center and several other stores at McGowin Park have multiple locations in the city.

Tax revenues are down too at Bel Air Mall since McGowin Park opened, although Wesch says that has more to do with new ownership, a major overhaul of tenants, and renovation of the property.

The City could vote by the end of the month on a deal with Bel Air Mall that could provide a maximum of $7.5 million over 15 years. That’s far less than the 30, 40, or 50 million-dollars developers of McGowin Park could realize in the next 20 years.

Mobile County is also contributing as part of the McGowin deal. It collects one-percent sales tax with 30-percent of that at McGowin going back to the developer. In the first ten months of the complex, that has amounted to 225-thousand dollars.

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