Council - Special Meeting

You guys ready? Good evening. It is 5.30. I am now calling this meeting to order. Please stand for our invocation and remain standing for the Pledge of Allegiance. Let us pray. Heavenly Father, we ask for wisdom and guidance as we conduct the business of our city. Help us make decisions that serve the citizens of Northport with fairness, integrity, and respect. Amen. Attention, salute, pledge. I pledge allegiance.

Ms. Tubbs, roll call, please. Pro Tem Washington? Here. Councillor Smith? Here. Councillor Conger? Here. Councillor Higdon?

Here.

President Dykes? Here. Presentations, we have none tonight. Number six, approval of the agenda. Is there anyone that would like to make a motion to approve the agenda for our June 11th, 2026 council meeting as printed?

So moved. Second.

That is a motion by Councillor Higdon and a second by Pro Tem Washington. Are there any questions or comments? Hearing none, Ms. Tubbs.

Voting with pro tem Washington. Yes. Yes.

Yes. Yes.

Yes. Visitors to address the council, we have none. We have no unfinished business, new business. We do have one public hearing. I would like to remind everyone that during public comments, we encourage you to share ideas or items of concern. There is a three-minute limit. Please remember to direct all of your comments to this council as a whole and not to anyone as an individual. 10B1, Mr. Ray.

Thank you, Madam President. We are here tonight to consider a resolution you have before you and to conduct a public hearing regarding that. It is a resolution that authorizes a project development agreement for a Big Mike Steakhouse in Northport. It's between the city, Sukarnochi Investments, I had to ask how to say that, and Winship LLC, who is the developer. Representatives of the company and the developer are here today if you have questions. I'll give you an overview of the development agreement and be able to ask questions before we turn it over to the council and the public. So this agreement is before you under Amendment 772, which authorizes economic development incentives. As you know, we've done that before. The amendment requires that the public be notified Notice was published, the public was clearly notified and they are here. Under the proposed development agreement, the city would purchase a newly constructed commercial building of around 6,700 square feet that would be to be constructed by the developer, Winship LLC, and then enter into a lease agreement with the company, Big Mike's, the company that operates the Big Mike's franchise. That lease would be for 20 years. And then the city anticipates issuing debt to finance the purchase of the building and the land and certain equipment necessary and related to the functioning of the steakhouse. The total amount would not exceed the principal amount of $4.8 million. Under the terms that are all set forth in the project development agreement, the city would anticipate that the debt related to this project, which is called the project indebtedness under the contract, would be paid from three sources of revenue. First, 5% monthly rent would be paid by Big Mike's in the amount of 5% of the project's gross revenues and sales on the project. The city would also agree to allocate 2% of the 3% sales tax that it receives already. And then the agreement contemplates the creation of a cooperative district, which... if the cooperative district were adopted by the city with subsequent proceedings it contemplates the assessment of a two percent cooperative district fee that would uh would be applied on transactions that occurred on that property alone and that money would also be pledged towards the repayment of the project indebtedness the The term is for 20 years. The idea as proposed is that this revenue would pay back the project indebtedness. And in the event the project indebtedness were paid off before the 20 year term, Big Mike's would still have the obligation to continue to operate, but their monthly rent would be reduced to zero because the debt would have been paid under that scenario. After the end of 20 years, Big Mike's would have the option to purchase the building for $100, provided the project indebtedness has been fully satisfied and paid for. The purpose of this project, like other economic development projects throughout the city, is the economic development of the city, the increasing of its tax revenues, increased employment opportunities for citizens, and honestly, to achieve the economic development goals and objectives of the city. Under, as I mentioned earlier, under the development agreement and under Amendment 772, the city is required to give public notice, which it did. It has satisfied that. Ultimately, the resolution before you, the key consideration under Amendment 772, the key finding that you have to determine is to determine and declare that the expenditure of public funds in accordance in connection with the entering into the development agreement and the things of value to be provided to the company and the developer for the purposes set forth in the development agreement will serve a valid and sufficient public purpose, not withstanding any incidental benefit accruing to the company or the developer or any other private person entity or entities. That is the fundamental legal requirement that you have to determine in connection with approval under Amendment 772. The resolution that you have prepared, if the council does approve it, it anticipates and authorizes the mayor to execute all the documents that are attached, which includes a purchase agreement with Winship, the developer for $4.8 million, the amount of the purchase price of both the land and the equipment as contemplated by the agreement. It also authorizes the mayor to enter into a lease with Big Mike's for the 20-year term on the terms I've discussed here. It also does authorize the city attorney's office to pursue validation of this arrangement. And all of that would be authorized through this resolution. To be clear though, the city's obligation, the consideration of the city's entering into $4.8 million in debt, that would have to come back before the city for ultimate approval. It doesn't authorize anyone to sign any bond documents or debt documents. That would be a matter that comes before the council in the future. So that's a general overview. As I mentioned, we have representatives of the company, representatives of the developer, and of course, city attorney's offices here. Well, I'm happy to answer any questions that you have.

Thank you. Before we get started, I'm going to turn the floor over to Mayor Phillips. He has requested to speak before we have the public hearing. So Mr. Phillips, the floor is yours.

Thank you, President Dykes. I want to take a few minutes, and bear with me, please. Over the course of this, I've talked to several people and it was indicated to me and spoken to me that the more information that was shared, the better people would feel. And I took that to heart and I really believe that is true. So I'm gonna take a few minutes and share a little information, not about the deal, but about how we got to this point. Because I think it's important to know every bit of information as we move forward. Several months ago, I entered into some talks with the folks from Big Mike's and they indicated that they had an interest to move to Northport. So we began to talk and we began to move that along. And this has been going on for several, several months. Now, why would I be interested in Big Mike's? Northport is in a unique situation, and I'm going to ask again to bear with me on some facts and figures as I go through here. Over the last, since 2020, our growth rate has been almost null, around 1 to 1.2% in growth. Our revenues have have flatlined to the point we still have a modest increase, but most of that increase, or at least a good bit of that increase, is probably inflationary, meaning that we're not getting any new businesses, we're not getting any new transactions, and the rise that we see in receipts could and probably are affected by inflation. I have the numbers, and... We have a rise over the last few years in tax receipts of a little over 200,000 a year. And in a city our size, that's why we'll take any increase, any increase is good. We need to do better because on the expenditure side, our expenditures are always going to go up. Your expenditures at home are going up just like the city's does. So we have to find or need to find a way to jumpstart our economy in growth. Now, back during the election, a lot of you were involved in the election, and you told us that you wanted better roads, better infrastructure, better places to eat, better activities, better shopping. Those were the things you wanted. Also, schools. That's a big list. Economic growth is driven by schools and healthcare. And we're behind in all of those. I just want to be very clear. But that's what drives economic growth. But bear with me right here for a minute, please. Roads. We currently have three road projects in various stages and two more on the drawing boards that are being talked about. Two new roads being added in and three Road projects. We heard you. Thanks to Ms. Tubbs, she has those moving along and working very well. We've secured right-of-way money for Fifth Street or right-of-way in the right-of-way phase for Fifth Street. We have acquired or secured right-of-way money for Lurley and Wallace, and that will be starting giving the proper time that it falls along. Infrastructure. But I want to give credit where credit's due. Councilor Conger here came in and she has gone after and has been a champion of repairing the metal pipe situations that we have across the city. And we have several metal pipe failures and problems that we have. And her along with the council, they have found a way or have decided to address this, and that infrastructure will be addressed soon in the future thanks to their hard work. Schools. Washington and Councilman Higdon are working on some things. I'm not going to, and I don't think it would be proper for me to get into the weeds today on that, but schools are being looked into, not negotiating, but talks are being had about ways that we can help our schools. And I'm not talking about, and while I don't mean to minimize any help that we give the schools, I'm not talking about helping the counselor stock her room. We have to help our schools in a big way. That's how cities grow. All these people have their projects that are going on. Everyone here is working and they have their different things and I'm just trying to help them along. We have retail projects underway that are in a negotiation stage that will bring never before type shops and retail markets to Northport. Northport is ready to grow. We can't grow if we're not competitive. Being competitive means selling your city, selling yourself, believing in yourself. And we're trying to do that. And that's what we're here tonight. Why incentives? Why do you offer incentives? Well, the numbers that I have right here on growth rate, and you can look at them, a lot of things have been posted by people on social media that were taken straight off of the internet. So I took my numbers straight off the internet. So if those that are being posted are right, then mine must be right too. But if you take those numbers, our growth rates are at 1.1, 1.2%. Our revenue streams are flatline. We're not growing. People say, why incentives? Well, we've been sitting here for the last five years, and the type things that we need to do are not just falling in our lap. They're falling in other people's lap. Right now, the north end of the state is seeing double-digit growth rates. Double-digit growth rates. because they are pursuing and challenging people to come to their city and partner with them. And it's working. We have to get outside the box and go retrieve the businesses that will make our city better. incentives. Does that mean that everybody that asks for an incentive gets one? No. Ms. Tubbs and I met with