Judge still must OK revenue sharing deal between city and AIG Baker
Friday, September 10, 2004
By RYAN DEZEMBER
Staff Reporter
ORANGE BEACH -- The City Council on Thursday morning approved designs for The Wharf, a mixed-use development planned for more than 220 acres on the southern shore of the Intracoastal Waterway.
The Wharf will have twice as much retail space as the Eastern Shore Centre being constructed in Spanish Fort and have about 200 more condo units than all four of the 300-foot towers planned for Gulf-front Turquoise Place combined.
Proposed by AIG Baker Shopping Center Properties, The Wharf will straddle the southern landing of the Foley Beach Express toll bridge. It will have more than 1 million square feet of retail and more than 1,000 condominium units. Other features include a three-story hotel, office space, 228-slip marina and an amphitheater, according to the plans.
By contrast, the much-talked-about Eastern Shore Centre being built along Interstate 10 has about 500,000 square feet of retail space planned. And developer Larry Wireman's controversial four-tower Turquoise Place condominium project that will more than double Orange Beach's 140-foot building height limit will include only 882 units.
The council in a special meeting voted 5-1 to rezone the property AIG Baker had collected for the project, from agricultural and residential zoning uses to a planned unit development.
Councilman Brett Holk cast the lone dissenting vote, citing concerns about increased traffic and the size of the condominium structures planned for the development's waterfront.
"I do believe they're not giving us enough to deviate from our ordinances," Holk said.
Councilman Jerry Davidson on Tuesday evening had voted along with Holk to delay the vote that was originally set for the council's regular weekly meeting. On Thursday, he too said he had concerns about the size of two condo buildings, which will be 500 and 680 feet long and up to 142 feet tall in places, but ended up voting in favor of the project that he has supported from the onset.
"I mean, this is first class," Davidson said before the vote. "I just hate to see that kind of wall of condos running along the canal."
Councilwoman Iris Ethridge said she supported the larger structures because of their dual function, combining two lower levels of retail space topped with several stories of condos.
"They're getting more use out of the land by using the same footprint for retail and for condos," she said.
With the approved plans, The Wharf moves closer to AIG Baker executives' aim to open the first phase of the development in summer 2005. Already the Birmingham firm has an agreement with Orange Beach in which AIG Baker can recoup up to $25 million in sales and lodgings tax generated by The Wharf.
In exchange, Orange Beach will receive an estimated $40 million in public improvements that include several parking decks, public roads and a half-mile-long boardwalk along the Intracoastal Waterway.
According to the deal:
Four years after AIG Baker receives building permits, Orange Beach will start rebating half of the annual sales and lodgings taxes created by The Wharf. The company, however, may choose to initiate the deal sooner.
The maximum annual payment required of the city is $2.86 million, which represents the $25 million principal plus 8 percent interest amortized over 15 years.
Payments to the developer of whichever is less -- $2.86 million or half of the sales and lodgings tax created by The Wharf -- will continue until either 15 years has elapsed or the repayments to AIG Baker reach $25 million plus whatever interest has accrued.
The handover to the city of public improvements at The Wharf will be marked by either Orange Beach's repayment of the $25 million debt or the passing of 15 years.
If AIG Baker invests less than $25 million for the improvements, the city's debt will be readjusted to reflect the lower value.
"We're not going to borrow $25 million, we're not ever writing (AIG Baker CEO Alex Baker) a check for $25 million," Mayor Steve Russo said Tuesday at a public hearing on the project's plans. "If he gets to that $25 million mark, it's because his (sales) projections are correct.
"If his projections are wrong and it doesn't reach that level then the city is not obligated to make up the difference."
The legality of the partnership is being tested through a validation suit that the city has filed against itself. In name, the City Council is suing the residents of Orange Beach, but for the most part, the city is suing itself over the deal in order to assure that others will not be able to file suit once money begins changing hands.
Presiding Baldwin County Circuit Court Judge James Reid, who in February OK'd the city's partnership with owners of the Foley Beach Express toll bridge, will hold a hearing on the deal at 1 p.m. Sept. 17 in the Baldwin County Courthouse in Bay Minette.
The district attorney's office will represent the citizens of Orange Beach by questioning the legality of each part of the agreement. The city's legal team will explain and defend the agreement.
Validation proceedings are open to the public and Orange Beach citizens may, after being sworn in, testify before the judge.
Source: Mobile Register