The Decatur Daily, Ala., Eric Fleischauer column: Sweetwater price tag is misleading

Mar 30, 2008 (The Decatur Daily - McClatchy-Tribune Information Services via COMTEX) -- -- Making a case against the city's proposed incentive package for Bass Pro and Sweetwater development is easy, but don't be too quick to conclude it is a bad deal.

The cons:

For the price of luring Bass Pro and Sweetwater to Decatur, the city could give every man, woman and child $945. Or, stated more painfully, the $52 million deal with Bass Pro equates to every Decatur citizen over the age of 18 -- including those who do not own fishing poles -- paying $1,300 to lure the store here.

The deal is unfair to other retailers. What could Wiley Outdoor Sports do with $52 million? Bass Pro will get a $32 million building on a $2.5 million tract of land for free.

The deal creates a windfall for property owners along Alabama 20. The jump in land values -- more than 1,000 percent for some tracts -- would in large part be a gift from taxpayers who are watching their own property values slide backward.

Time to tell Bass Pro to pack its tackle box and leave, right?

Not so fast.

Measure of an investment

The measure of a good investment is not whether it unfairly benefits someone else, but whether it provides an acceptable return to the investor. Here, the investor is the city of Decatur, using funds supplied by its taxpayers.

The first question, of course, is the amount of the investment. Looked at carefully, it is a lot less than the $52 million price tag.

Start with the biggest chunk, $36 million in bonds with a principal amount of $32 million.

The money to repay these bonds would come from Decatur sales-tax revenue, but only the revenue generated by Bass Pro.

Unless the city pledges the sales tax, Bass Pro will not come.

The city would not get the money if Bass Pro did not locate here.

So the $36 million is not properly considered a cost to the city.

That takes the price tag down to $16 million.

Of this amount, about $2 million would go to much-needed alterations of Alabama 20. Any development on Alabama 20 would require such renovations, so we're down to $14 million.

Another $2 million is designated toward rerouting a Tennessee Valley Authority power line that, if not moved, precludes development at the southwest corner of Interstate 65 and Alabama 20.

It bisects the property diagonally, preventing development of the land most visible from I-65.

Close to $5 million is earmarked for stormwater drainage facilities, underground electric lines and extension of water, sewer, gas, telephone and cable. Many of these expenditures would be necessary to attract any significant commercial development.

After whittling from the $52 million amount that the city probably would end up paying to spur any significant commercial development on Alabama 20, the economic incentive package is closer to $7 million, about $127 from every Decatur resident.

Would attracting Bass Pro, a hotel and a convention center trigger development that would add $7 million to the city's coffers? That is the question for the City Council.

Contact Eric Fleischauer at eric@decaturdaily.com.

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