SuperCenter gaurantees tax revenue increase
Plans for the Wal-Mart SuperCenter groundbreaking continue forward with more details being released about what happens after it opens.
One of the biggest things the city is undertaking is the leasing of the old building from Greenwood Towers, L.P.
The building contains 54,962 square feet in usable space.
The city will lease the building for $16,671.80 per month, an amount being offset by sales tax, according to Richard Hartley, the city’s attorney.
That equals $200,052 per year until Jan. 1, 2017.
&uot;Wal-Mart is guaranteeing an increase in sales taxes of $300,000 a year,&uot; Hartley said.
&uot;If they don’t get to the $300,000, they have to pay us cash.&uot;
Despite what some in the public say, this was the city’s plan.
&uot;Obviously, the purpose of that was to cover the rental of the dark store (old Wal-Mart),&uot; Hartley said.
&uot;It is a very important point to remember because the net result to the city is zero, if not plus.&uot;
So how long does the city wait before those increased sales taxes roll in?
According to Hartley, the city will not begin paying the rent for three months after opening, which allows for tax collections.
&uot;There is a three month period of time where we have to wait for sales taxes to catch up because they are paid like a month and 20 days in arrears,&uot; he said.
&uot;We have a three month period of time where we don’t have to pay any rent.
Hopefully, way before then we’ll have the developer and the sub-subtenants in place so that once Wal-Mart moves out they can begin to make alterations necessary to the dark store to get that up and running as soon as possible.&uot;
For months, speculation has centered on a movie theater going into the old building.
However, Hartley said the building will not house only a theater, but other businesses as well, but there are some restrictions.
&uot;Obviously, there can’t be a business that competes directly with Wal-Mart unless the size of the business is very small, based on the store’s square footage,&uot; Hartley said.
In essence this means that the city can’t go out and recruit stores like K-mart or Target into the city.
He said one thing people shouldn’t worry about is that the city will have an empty commercial building on its hands.
&uot;The first thing the mayor is trying to do to put in there is a movie theater,&uot; he said. &uot;That has nothing to do with whether or not there is a Wal-Mart here or not.&uot;
Hartley said the old store would not simply sit there.
&uot;The city is going to sub-sublease the property to other tenants who will pay the rent to the Cooperative Development Authority,&uot; he said. &uot;The authority would then assume the payment of the prime lesser.&uot;
The attorney said the city is approaching the deal with two things in mind.
&uot;First is the increase in sales tax which is guranteed by Wal-Mart,&uot; he said. &uot;Secondly, the city will have rent coming in from the sub-subtenants of the facility.&uot;
Hartley said it is only a matter of time before developers begin showing plans for the old store.
&uot;There are other tenants, in fact, two or three developers I know, who have contacted the mayor about developing the property,&uot; he said.
&uot;I don’t think the vision is that the store itself will be one store. It is going to be divided up.
A part of it hopefully will be a movie theater and then in front of the movie theater will be like a mini-mall so that you might have a central hallway with smaller shops on either side leading to the movie theater that would be in the back.&uot;
These other stores, Hartley said, are not in direct competition with Wal-Mart, and have shown in sales studies that they do very well in cities the size of Greenville.
There are already developers that I’m aware who would like to do that and have tenants who are not necessarily in direct competition with Wal-Mart, but who do well in other cities the size of Greenville.&uot;
Also, Hartley refuted rumors that the city is already paying rent on the old building.
&uot;Nothing is going to happen until the Wal-Mart SuperCenter is completed and open for business,&uot; he said.
&uot;We have no obligation until then in terms of subleasing the facility and paying the rent.
Wal-Mart has all the responsibility until they open they the new store.&uot;
Finally, another rumor floating about that Hartley stopped was one pertaining to the city’s borrowing power because it is connected to the lease.
&uot;A lease is an off balance sheet proposition and according to bond lawyers, signing a lease has not effect on it,&uot; he said.
Michael Hoffman, president of Southeast Capital Investments did not return calls for this article.