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EARLIER: Simpsonville takes steps on outlet mall deals

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Horizon would get payroll tax break, finance tap-on fees

By Steve Doyle

The pond, fish and many trees are gone, and the dirt is moving furiously at the site of the Outlet Shoppes of Louisville on Buck Creek Road, and the Simpsonville City Commission on Wednesday was full of activity as well.

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Commissioners passed along for second reading three ordinances and approved other steps that would affect Horizon Group Property’s 350,000-square-foot outlet mall project, which is slated to be completed in late summer 2014.

Most prominent was an ordinance that would allow the city to offer a 5-year split of occupational tax revenue for any new business or industry that would bring significant job growth to the city.

The city splits occupational taxes 50-50 with the county, and the ordinance reviewed Wednesday allows for the city – at the discretion of the commission – to split its take over a 5-year period.

The commission also approved entering into a contract with Horizon to spread its sewer tap-on fees over a 5-year period and closing Proctor Lane and deeding that property to the landowners – Horizon and AKBD LLC.

Horizon officials have projected the mall would bring 1,000 jobs to the city and have an annual payroll of $30 million, and based on those numbers, the city would split $150,000 in annual revenue for the first five years, returning $360,000 to Horizon.

“They will pay the tax, and we would rebate it back to them,” Mayor Steve Eden said in a follow-up interview. He said those exact figures could change based on the actual numbers after the mall is fully operational.

City Administrator David Eaton stressed, however, that this ordinance was not written simply for Horizon’s project. The measure also is similar to steps taken by the city of Shelbyville. State incentives aren’t available for retail expansion.

“We had no vehicle in place for others, like industry,” he said. “All we had was property tax abatement. A lot of times through KBI [business incentive programs] at the state it was a matching situation. All we had was property tax, and now have occupational tax to attract new business.”

The ordinance specifies that to qualify for the occupational tax incentive a company must create a minimum of 100 new jobs and/or create a minimum annual payroll of $5 million. The incentive could be enacted at the suggestion of the mayor and with approval of the commission.

Similarly, the city had passed an ordinance earlier this year that allowed sewer tap-on fees for new businesses to be waived if that business was paying for construction of new sewer connections. City officials failed in their application for a Community Development Block Grant to pay for connecting its sewer system to Horizon’s property, which requires boring under Interstate 64 from behind the Pilot truck stop on Buck Creek Road.

That expense of boring under I-64 now falls to the city, and to help Horizon pay its tap-on fees, estimated at $360,000, the city would agree to spread them over 5 years.

“They have to pay the fee,” Eaton said. “What we did was spread it out for five years. We’ve done this before. We spread out the Whitney Young [substation] project over three years.”

The $360,000 is based on estimates provided by Horizon, which projects to use 15,000 gallons a day, or 450,000 a month. But, again, those numbers could change.
“Once they are established, per regular ordinance, we will have exact numbers,” Eaton said. “We re-evaluate and adjust. If they use more or less, then they pay more or less.

“We’ve done it this way for years. We only can take the company at its word. But if we find out they use more, we go after it.”

Proctor Lane is a small connecting road between Buck Creek (KY 1848) and Veechdale Road, which will be rerouted farther south and through the mall property. There are two vacant houses on the road, and the land along both sides is owned by Horizon or AKBD, a company owned by John Schnatter, founder and CEO of Papa John’s Pizza.

“Because they own property on both sides, we just turn it over,” Eaton said. “It’s like closing an alley.”

Those two houses are a stark symbol of the past in the face of the future being constructed at the site. Although no formal ground-breaking has occurred, Kelsey Construction of Shepherdsville, the subcontractor that will install the roads, water and sewer for the project, has been moving furiously to clear the area for the mall and the outlots that front it.

“I talked to the contractor today,” Eden said, “and those structures should be coming down next week.”