During last Tuesday’s monthly meeting, the Springfield Board of Mayor and Alderman voted unanimously on a resolution to approve the Economic Impact Plan for a development on Watson Road, which was requested by the city’s Industrial Development Board.
The Economic Impact Plan is part and parcel of an agreement with the New Urban Development Corporation, a company that is set to build, develop, and lease to Chick-Fil-A a brand-new store to be located at the corner of Watson Road and Tom Austin Highway.
“Most of you know we’ve been in negotiations with Chick-Fil-A for about a year and a half,” City Manager Ryan Martin said. “It really just boiled down to finding the right place in the right location, and we were able to help them do that. And then it became a product of a good location but a bad site.”
Before construction on the Chick-Fil-A can begin, significant improvements will need to be done on the property, including stormwater work and drainage work, as well as grading on the site. As they have customarily done in new markets, Chick-Fil-A has asked for assistance from Springfield in this work.
To help pay for this, the city has come up with a TIF arrangement, which is a tax increment financing arrangement. After being approved by the Springfield Industrial Development Board, this economic plan was also approved by the Robertson County Commission at their July meeting.
Since the TIF arrangement is tax increment financing, it is essentially a loan that is paid back by the increment on property taxes. Based on their strategic planning, Martin noted that the city has placed a greater emphasis on incentives like a TIF. He noted that Greenbrier has done several of these, and this will be the first opportunity for Springfield.
“You take the base amount of the property taxes, so let’s just say for numbers sake $100 of property taxes paid on the property. Once they build a Chick-Fil-A it goes up to $500 for property tax. I’m oversimplifying, but that increment of $400 is used to pay off the proceeds of that note for the infrastructure advancement,” Martin said.
Because the TIF arrangement will only cover part of the incentive package, the city will be asking to approve at a later date a site grant worth $230,000. Along with the TIF arrangement, which is also $230,000, a grand total of $460,000 will go towards assisting with Chick-Fil-A.
“The site grant is something that’s kind of an added incentive to close up that deal because the TIF wouldn’t have made up the entire deficit that they needed,” Martin said. “It’s a very specific tool that can only be used for infrastructure, so with the amount of stormwater and other infrastructure upgrades that they’re doing to the site we’re able to kind of pull this lever.”
The estimated site upgrades will cost Chick-Fil-A roughly $800,000. While they initially wanted help with the entire amount, an agreement was settled at $460,000.
Springfield intends for the money to pay for this to come from its industrial development fund, after the city sold several pieces of property in the north industrial park over the last year. Martin noted that they have been looking into the resolutions from 1994 when that fund was first set up.
Tom Trent, an attorney with the law firm Bradley in Nashville, has been engaged to represent the Industrial Development Board for this process. He is also the counsel that helped orchestrate the other two TIFs that had previously been done in Robertson County.
“Because that fund is available for industrial development, we’re just trying to get to the definition of what industrial means, or if we need to come back and modify that to the economic development, where it can satisfy this purpose,” Martin said. “We’re working on that, and we’ll know later as we move forward, but this is the first step in that process.”
Development plans for the restaurant indicate a 5,000 square foot facility to be built. The estimated local option sales tax revenue is roughly $170,000. Many board members indicated the impact this will have locally, and that a $230,000 TIF arrangement will be paid back by the increment is a big deal.
“We started talking about this with our industrial development fund in 1994, getting big name restaurant firms that can bring about good paying jobs and progress to our city,” Alderman James Hubbard said. “I’ve got about 3,000 constituents and after this news leaked out, I received several phone calls asking me not to vote against this.”
“We have an entire county excited to see this coming, and we definitely hope for more to come in the future,” added Mayor Ann Schneider.
