Lebanon is considering an economic stimulus for the K-Mart place

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April 21 (Reuters) – Western Plaza, which was formerly home to Kmart, has remained largely undeveloped since the retailer left the site in 2019. On Tuesday, the city approved a measure aimed at resolving this deadlock.

During the regularly scheduled meeting of the Lebanese City Council, an ordinance was passed by a 5-1 vote to push ahead with an economic stimulus package to attract a prominent company to the square.

“I’ve been working with the owners of the K-Mart mall since December 2019,” said Sarah Haston, Lebanon‘s director of economic and community development. “We asked them to redevelop the entire center rather than rent it out to their initial offerings.”

Haston didn’t specify which companies she was referring to, but said the city is looking at five national tenants who are soft goods retailers. She also pointed out that these retailers’ projected sales tax revenue would be about $1.4 million per year.

Though there’s no confirmation of which companies will be attracted to the location, the mayor alluded to exploratory talks with Target during the meeting.

“Unfortunately, there will never be a target there,” said Lebanese Mayor Rick Bell.

Target has website restrictions. The property must belong to the company. The building must be of a certain size, and the mall must not also have a Dollar General.

Still, Haston said she felt Lebanon was in the driver’s seat and didn’t think the regulation was revealing too much.

“Lebanon is at a point where we can influence the lineup and we’re trying to do that with a small stimulus package, most of which is fee waivers,” Haston said.

At first reading, the package would waive fees related to development issues such as building permits, site plan reviews, stormwater inspections and grading. It can change until it passes a second reading.

Lebanese City Councilor Tick Bryan requested that the measure be postponed until a working session could be held to discuss the matter in more depth. It failed, however, by a vote of 4-2, and Councilwoman Camille Burdine joined Bryan for it.

Lebanese City Councilor Jeni Lind Brinkman cited her reasons for rejecting the postponement and said that she believed now was the time to take the step.

“For the people in my community, this is their gateway to the city,” Brinkman said, noting that he insisted on filling the space with a reputable retailer.

The ordinance provides $200,000 from the city’s Tourism and Economic Development Fund, which was set up on January 1, 2020, when Lebanon implemented an increased hotel/motel tax.

The hotel/motel tax is 4%, down from the previous 2%. The increased amount will go to the tourism and business development fund, with the other half going to the city’s general fund. Lebanon’s Finance Director Stuart Lawson said there is about $540,000 in the Tourism and Economic Development Fund.

Bell said tourism is a priority of his administration. He pointed to payments of $100,000 made to the Farm Bureau Expo Center.

Originally, the city agreed to pay the convention center $100,000 per year. Before the establishment of the Tourism and Economic Development Fund, these monies came from the general fund. Since the introduction of the new tax, it now comes from the Tourism and Economic Development Fund.

In addition to Brinkman, Councilors Joey Carmack, Fred Burton, Chris Crowell and Bryan approved the measure.

“This is an opportunity we must seize now,” Carmack said Wednesday. “I look forward to working with (Bell) and (Haston) to make this a reality. It is the right decision for our city.”

Crowell added: “It’s a bespoke approach. We want to use it to attract retailers that we might not otherwise get. There are other cities that have these resources. This allows us to be more competitive with them.”

Although the city council approved the measure, several hoteliers from across Lebanon who are responsible for paying the occupancy tax opposed the regulation without at least further discussion.

“The discussion of spending hundreds of thousands of dollars in just one week seems short of breath,” said Krishna Patel, whose family owns three hotels in the city. “I don’t think there’s enough time to get our point across even in a working session, and I don’t think the city is budgeting and planning how the funds will be used.”

Patel indicated that he and his colleagues were frustrated by what he described as a lack of initiative from the city.

“When the tax went up, some of that should go to tourism,” Patel said. “There have been no new tourism initiatives since the survey. The mayor spoke of $100,000 being spent at the exhibition center, but that’s actually an agreement the city of Lebanon made back in 2015, before the tax increase. When the 2% increase went into effect, we as stakeholders wanted to make sure it fed back into tourism.”

Patel wants there to be more emphasis on attracting and developing small businesses in the city, rather than courting national companies.

“All of these are public companies,” Patel said. “All of their profits go to Wall Street and its shareholders.

“(The city) already spent $100,000 to get a Publix (on Hwy 109) and now they want to get a national policy that has a total net worth of $100 billion… not a million, a billion with a B .”

Patel mentioned that he doesn’t understand why the incentive to open a business in a thriving center like Lebanon isn’t attractive enough.

“The city wants to shell out $200,000 to commercially develop this mall, but realistically the mayor actually said that the developers should pay,” Patel said. “Developers should pay to come to Lebanon. Middle Tennessee is hot. Lebanon is hot. If they want to come, they should step on the plate. Why would cities need to use money from their funds to reward and give? a handout?”

In Patel’s view, an ideal expansion of incentives should be distributed in stages to small, medium and large companies. It’s something he would like to see discussed in the working session.

The city has scheduled a working session next week to discuss the ordinance and how to proceed. Until the second reading of the ordinance, which could take place as early as May 3, the city council can still change it.

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