CULLMAN, Ala. – The City of Cullman and Cullman County have approved a performance-based incentive package for a new shopping center expected to bring national retailers to Cullman, with officials projecting the development could generate approximately $29.7 million for local governments, schools and volunteer fire departments over the next decade.
The package includes a sales-tax revenue share of up to $5 million, improvements to Swafford Road and an additional incentive of up to $250,000 tied to construction materials purchased locally.
Unlike an upfront payment to the developer, the primary incentives are tied to economic activity generated by the project.
“This development is an investment in Cullman and in our community’s future,” Cullman Mayor Woody Jacobs said. “Bringing national tenants to Cullman gives our residents more choices and more reasons to shop here at home. Keeping those dollars in our community strengthens our local economy, creates jobs, and generates additional tax revenue that can be reinvested in our schools, communities, infrastructure, and public services.”
Under the largest portion of the agreement, the developer will be eligible to receive up to $5 million through a share of sales-tax revenue generated by qualifying new retail stores at the development during a 10-year period.
Approximately 60% of that revenue share will come from the City of Cullman and 40% from Cullman County.
The provision is specifically limited to new retail activity.
Retailers already operating in Cullman would not qualify for the incentive if they simply relocate an existing store to the new shopping center. Restaurant sales are also excluded from the revenue-sharing program.
Cullman County Commission Chairman Jeff Clemons said the project reflects cooperation between the city and county in recruiting new investment.
“This is a great example of what can happen when the City and County work together toward a common goal,” Clemons said. “This development represents a significant investment in our community and will create new opportunities for residents while strengthening Cullman County’s retail and economic base.”
The package also includes improvements to Swafford Road, which officials said will address existing infrastructure needs while preparing the surrounding area for additional development.
“Swafford Road needs attention, and this development gives us an opportunity to make an investment in that roadway while bringing new businesses and private investment to Cullman,” Jacobs said. “We are looking at how this project can improve the surrounding area and benefit our community.”
A third component is intended to encourage the developer to purchase construction materials from Cullman County businesses.
The developer may receive an amount equal to 50% of the sales tax paid on qualifying construction materials purchased within Cullman County, with the incentive capped at $250,000 during a 10-year period.
Cullman City Council President Kim Hall said the structure was intended to spread the economic benefits of the project beyond the businesses that eventually occupy the shopping center.
“These incentives are designed to encourage new investment and make sure our community benefits from the project throughout the development process,” Hall said. “We want to see new businesses come to Cullman, we want to see our local businesses benefit from the construction, and we want to make improvements to infrastructure that our community needs.”
Hall emphasized that the developer must generate the qualifying activity before receiving the corresponding incentives.
“The incentives are tied to new businesses, new sales, new tax revenue, local construction spending, and improvements to our infrastructure,” Hall said. “If the development does not generate the activity, the developer does not receive the corresponding incentive.”
According to estimates released Tuesday, the development is projected to generate approximately $7.2 million for Cullman County Schools and $5.8 million for Cullman City Schools over 10 years.
The projections also include approximately $2.5 million for Cullman County municipalities other than the City of Cullman and approximately $314,000 for Cullman County volunteer fire departments.
When projected revenue to general funds is included, officials estimate the development will generate approximately $29.7 million over 10 years for local schools, municipalities, volunteer fire departments and Cullman County.
City and county officials said a major objective of the development is capturing retail spending that currently leaves Cullman County when residents travel elsewhere for stores, restaurants and services that are not available locally.
Specific tenants have not yet been announced.
Construction is expected to move forward following approval of the incentive package. Additional information regarding retailers, the construction schedule and an anticipated opening date is expected to be released as the project progresses.
