JUNE 14, 2007
CITY COUNCIL WORK SESSION
1705 MAIN STREET
DAPHNE, AL
6:30 P.M.

COUNCIL MEMBERS PRESENT: Bailey Yelding, Cathy Barnette; John Lake; Greg Burnam; Ron Scott; August Palumbo.

ABSENT: Regina Landry

Also present: David Cohen, City Clerk; Rebecca Hayes, Assistant City Clerk; Mayor Fred Small; Jay Ross, City Attorney; Kim Briley, Finance Director; Kenny Hanak, Fire Chief; Capt. Joey Holasz, Fire Department; Melvin McCarley, Interim Public Works Director.

Mr. Allen Cox, Timber Creek Development, stated that he has for the last eight (8) or nine (9) months been discussing with the State of Alabama, Baldwin County officials, the City of Spanish Fort, some people with the City of Daphne, Mobile Infirmary Health Systems and several other parties concerning the Highway 13 extension. It is his understanding that it is important to Baldwin County officials that the north-south corridor on Highway 13 be completed and funded in a timely manner. The interchange on the north side of the interstate will all be on Timber Creek property, that is approximately 150 acres that was zoned B-2 by
the Council in the last 12–18 months, and has already been annexed into the city, so all of this is in the City of Daphne.

What they have been trying to do is work out how it would best benefit Baldwin County, the City of Daphne and Timber Creek, and then some other parties showed up. They reached a conclusion today, Timber Creek made a proposal to the Baldwin County Commission about four (4) weeks ago and what they basically proposed was that this interchange would be constructed on Timber Creek property, and there would be a service road, and that Timber Creek would donate the land, which is worth easily between $1½ -2 million for the service road, and put up $4.3 million in cash, which is more than the county is going to spend. There are some reasons for that, the 130 acres, once the interchange is completed, will be the most valuable parcel of land left in Baldwin County. The most recent land sell in that area was 2.2 acres between the Holiday Inn Express and Bassett Furniture, it closed about two weeks ago at over $19.00 a foot, or $800,000 per acre.

They have an opportunity, they think, to bring a big plus to Baldwin County and the City of Daphne, and that is the Infirmary Health Care Systems. They have a written agreement with them where they are going to purchase approximately 100 acres of this land, and Mr. Cox has had two (2) meetings with Mayor Small and Mr. Burnam, and Mr. Burnam has been to another 25 meetings he has had with various people around the state so that somebody would have an idea of what they are trying to do. It is a big deal for the Infirmary to come here, that they would take 100 acres, when there current facility in Mobile only has 67 acres of land, so this allows them room for a major medical complex over time. He thinks that Daphne is one of the two largest cities in the state of Alabama that doesn’t have it’s own signature hospital within the city limits.

The way that Timber Creek feels about it is that they did not ask for this interchange issue to come up, the State of Alabama showed up here two years ago to meet and made clear that it was coming, and the County and Daphne, truthfully, will benefit most from it, because once the north-south corridor is created there will be other developments and revenues generated to the city by this being done, and their choice is either to let the I-10 interchange come and fight it in some way saying that it is destroying 30–40 acres of their land and that they cannot build houses within “X” miles of it etc. But they think that the Infirmary is the perfect answer. First of all, it will take a number of years for it to occur. They will still have to go through Timber Creek Architecture and City of Daphne Planning, and he thinks that they can work with them long term. The way that it works out now, the service road and the interchange exits dead end on Timber Creek property, there will be no thorough traffic, there will not be retail traffic or anything else going through there. They have cut 60%-70% of the traffic out of it today.

He wanted to get it out on the table that Cypress Equities, the other parties referred to earlier, is the one that came to him, who is building the Spanish Fort Town Center, about eight (8) months ago and said they understood that he was the guy to get this done, and he worked for them for eight (8) months and they didn’t accept the final bottom line bill, so they are not involved any longer. So, the service road going from Highway 181 all the way to their development is not going to happen, it is going to dead end on Timber Creek property.

There will be a written agreement with the county that no one else will have access to that road without Timber Creek permission for ten (10) years, so it effectively nullifies, because as soon as the hospital builds their building in front of the service road it is over.

He thinks it is an extremely good deal for Baldwin County, particularly to get the north-south corridor, because it affects Fairhope, Daphne and lot of people going east and west. He thinks that Daphne and Baldwin County are both benefiting for the possibility of a major health center being located here. It will be the signature building development coming into Baldwin County from the west, so when you cross the interstate the Infirmary will be there along the interstate. Again, this is not something that will happen in the next few years, it will take three and a half years (3½) to get this project completed. It is 18 months of environmental permits, engineering, then they have to bid it out and then they will have to construct.

One of the reasons for it coming to a head now is this is a $20 million investment by the State of Alabama, and Montgomery could take it somewhere else, and then nothing will happen, and the county will have spent $10 million dollars already for nothing. So there are some time  constraints for this, and the county publicly this afternoon accepted Timber Creeks’s proposal, and Timber Creek is prepared to put the money up and go forward, and the county has asked them to have their attorney get with the county’s attorney and get an agreement signed.

Now, where the City of Daphne is involved is that it is a minimum of $5.3 million that it is costing Timber Creek, now they took the risk and went ahead and did this without consulting with the City of Daphne, and they are asking for no commitment from anyone from the City of Daphne in advance, because they really just knew that if they tried to involve everyone in those 25 meetings nothing would have gotten done, so they, as a private enterprise, made a commitment, and they met with the Infirmary and the Infirmary agreed to pay 20% of the price to bring the service road and the interchange access to the property, which is $1,000,075.

Now, they are asking the City of Daphne to do this also. Timber Creek will eat 60% of it, and truthfully, they have given the Infirmary a real estate deal of about 60 cents on the dollar to get them here, so he feels that Timber Creek has done their part. He said that a decision will not need to be made now, they do not need the money for about 18 months, and there is time for him to come back and meet with Council again. He wanted Council to hear his side of the story before it was in the paper Sunday.

Mr. Cox stated that the State of Alabama has agreed to make a four (4) lane overpass, instead of the two originally planned, and that they are spending an extra $1 million to make it a four (4) lane overpass, which helps Daphne, and they just recently agreed to make it four (4) lanes. It is a $20 million construction project for that interchange.

The next time Mr. Cox comes before Council he will have signed agreements with the Infirmary and the County, and he will have someone from the Infirmary with him so that he can relate to Council their level of commitment, the Infirmary has made up their minds that this is where they want to come. He pointed out that the Mayor had brought up some good questions like when are they going to build, what happens if they don’t, and again he said that they have agreements with the Infirmary where they have to start within a certain time frame, and build a certain building or Timber Creek can buy the property back at what they paid for it.

Timber Creek is not going to let the property sit for 10 years, and they are not going to let it be non-medical. There are agreements in place to protect Timber Creek and Daphne.

Council asked questions of Mr. Cox regarding the service road, the interchange and Daphne’s share in the cost.