A proposed new Walmart in Ladonia is setting up a potential fight over sales tax revenue between Phenix City and Russell County in which the city holds the upper hand.
The public process began cloaked in secrecy Tuesday as the Phenix City council started the annexation process of nearly 13.5 acres on U.S. 80 near Woodland Drive. The land, owned by Will Fred Chambers, is currently just outside of the Phenix City city limits.
If Phenix City annexes the property as Chambers has requested — and a vote will likely come early next month — the city would collect the sales tax revenue of any business that locates on the land, shutting the county out.
When the property came up at Tuesday’s city council meeting, all Phenix City officials would say was it was a potential big-box retailer. Phenix City officials, including City Manager Wallace Hunter, declined to identify the potential business citing confidentially agreements associated with economic development deals.
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They were not as bashful at Wednesday’s Russell County Commission meeting.
County Attorney Kenneth Funderburk and Commissioner Tillman Pugh, who represents the Ladonia area, both identified Walmart as the interested retailer.
After the potential retailer was revealed in the commission meeting, city officials refused to elaborate.“I am not going to get into that game,” said Phenix City Mayor Eddie Lowe. “ They know more than I do.”
Contacted Wednesday, Hunter again declined to identify the retailer that Phenix City was talking to.“It could kill the deal,” Hunter said. “Any time you have a confidentiality agreement, you don’t talk about it.”
Asked if it was Walmart, Hunter responded, “I have no comment on that.”
What Phenix City does have is the infrastructure to accommodate a large retailer.
The city Utility Department has water and sewer lines on the front and back side of the proposed property, Mayor Eddie Lowe said.
“We are trying to grow Phenix City and we have put the infrastructure in place to do that,” Lowe said.James S. McGill, director of Special Projects for the Phenix City-Russell County Chamber of Commerce, told the county commission Wednesday that the county did not have the infrastructure in place to service the proposed site. The city has its own internal economic development department and does not use the chamber as the primary industrial and business recruiter.
It leaves Russell County with few good options.
“The city has for years opposed changes to any rules that would allow the county to get any part of the sales tax” on property in the city limits, Funderburk told the commission.
On Funderburk’s recommendation, the commission voted to hire the Montgomery law firm of Webb & Eley to explore if the county could incorporate outside the city limits, thus keeping the city from annexing.
Though the vote was 7-0, it appears to be a long shot as Commissioner Ronnie Reed noted.
“It is not going to solve the problem, but I am voting yes,” Reed said.
Funderburk told the commission this was “the only way to keep the city from being able to leap frog or lasso” land in the county.
Pugh is concerned that the development of that site will cause issues for the residents of Ladonia, a growing area about 5 miles west of downtown Columbus.
“I am concerned about the negative impact of a Walmart in my neighborhood,” Pugh told the commission. “It is going to add to the traffic. It’s going to get bad.”
Several commissioners pointed to the irony that the county would likely have to put up red lights into the development because the road into the land would be outside the city limits.
“I just know they are going to ask for a red light at the intersection,” Pugh said.
More that two years ago when the current Phenix City Council was swept into office in a vote that took out all of the existing council members, one of its first actions was to put an annexation moratorium in place. But that resolution had an out if an annexation made economic sense.
“That moratorium meant residential,” said Russell County Commissioner Gentry Lee. “Residential costs governments money, commercial makes the government money.”
The city did recently annex a dentist office on Summerville Road.
Bentonville, Ark.-based Wal-Mart Stores Inc., which already has a heavy presence in the Columbus-Phenix City market, is in the process of adding a 158,583-square-foot supercenter on Victory Drive in south Columbus, with construction projected to start this summer and opening in the summer of 2016.
Also on the way are Walmart Neighborhood Markets — which are full-line grocery stores — on Manchester Expressway and Blackmon Road in Columbus. Both of those are about 42,000 square feet, with construction projected to start this summer as well. The Manchester Expressway store should open in summer 2016, while the Blackmon Road location is expected to open this coming winter.
The supercenter and neighborhood markets all will have gas stations and additional retail and restaurant tenants situated around them, which is typical for Walmart developments.
The retailer already operates a supercenter and Sam’s Club on Whittlesey Boulevard, supercenters on Airport Thruway and Gateway Road, and a non-supercenter on Buena Vista Road — all in Columbus. It also a supercenter on U.S. Highway 280 in Phenix City.