Outlet Mall Developers Seek Tax Incentives
Developers of a proposed outlet mall in southwest Charlotte want the city and county to pitch in up to $6 million for streets and utilities. The request goes before the city council Monday night and will be in the Mecklenburg County Commission's hands Tuesday. WFAE's Julie Rose explains:
The city and county are increasingly being hit up by developers for what's called a "tax increment grant."
Here's how it works: Tanger Factory Outlet Centers and Simon Property Group expect to spend about $8.5 million on roads, stop lights and utility lines for a new outlet mall, office building and 120-room hotel in the Steele Creek area. They want the city and county to cover $6 million of that by giving the developer a 45 percent discount on its property taxes over the next ten years.
So what happens if the project doesn't pan out as planned? Say the hotel or office building never gets off the ground? Do the city and county still have to pay the full $6 million?
Mecklenburg County Economic Development Director John Allen says the risk is all on the developers.
"They'll only get back 45 percent of the taxes that they pay," says Allen. "If they don't build very much and 45 percent of the taxes over that 10-year period only equals $3 million, then that's all they get."
Tax increment grants are a relatively new form of economic incentive for Charlotte. Typically relocating and new companies go after economic incentives tied to the number of jobs they plan to create.
Allen says Tanger and Simon are not pursuing that route for the outlet mall.