Tuscaloosa Eyes Selling Dozens of Properties To Address Two-Pronged Cash Crunch

The city of Tuscaloosa is looking at selling a fair number of its properties, ranging from vacant lots to historic properties and major developments, including the old Benjamin Barnes YMCA, the McAbee Center, and the Phelps Center.

The discussions come as the city faces a cash crunch on two fronts, both sides of which are too large to tackle in detail in this report.

The first major problem is the roughly $15 million the city is "losing" this fiscal year alone to the way online sales tax is collected and distributed in the state. The Simplified Sellers Use Tax (SSUT) issue is significant enough that Tuscaloosa Mayor Walt Maddox has requested and obtained permission from the city council to sue the state of Alabama over it. 

The second is the pending conversion of the retirement plans of Tuscaloosa's police and fire departments from their existing structure to the coveted Retirement Systems of Alabama - one of the most expensive propositions in the city's recent history, which is expected to require $8.5 million annually.

City officials recently traveled to New York to meet with two major credit rating agencies, Fitch and Moody's. They reaffirmed Tuscaloosa's AAA rating from Fitch and Moody's Aa1 rating, but also warned that the RSA conversion would require $4 million in annual budget cuts for each of the next three years if the city wants to meet its promised implementation date in October 2026.

In a Tuesday meeting of the city council's properties committee, Chief Operations Officer Brendan Moore presented a list of 30 prime properties to sell from the over 500 pieces of real estate the city owns. None of the parcels contain critical infrastructure or would limit the future growth of essential assets, such as the Tuscaloosa National Airport.

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"Mayor Maddox has encouraged us to go through the full portfolio and look at items that aren't necessarily critical for operations that maybe we could dispose of, get back on the tax rolls and provide private sector opportunity, which I think would be a fantastic idea," Moore said.

The properties presented include the Phelps Center near Lake Tuscaloosa, the McAbee Center off Loop Road, the Old Jail building on 6th Street, the AA Building on Jack Warner Parkway and more.

"The more property we can sell, although it's one-time funding, it certainly can help us in the interim," Maddox said last week. "And getting them on the tax rolls where they're constantly making sales tax and property tax is in our interest."

Maddox said proposals will be presented over the next year to sell properties of interest, and he asked the council to consider them seriously so that necessary revenue doesn't have to come from cutting existing jobs or programs.

For instance, a request from Maude Whatley Health Services to convert the old Benjamin Barnes YMCA into a new clinic is off the table due to uncertain federal funding, and the city is again considering selling the property.

The old Tuscaloosa Fire Rescue Administration building, located at the corner of Greensboro Avenue and Investigator Dornell Cousette Street, may be sold, and Moore said it recently appraised for $3.3 million.

Perhaps the biggest potential for impact comes from the McAbee and Phelps Centers, which Maddox and Moore said are a drain on city finances every year, to the tune of more than $800,000 combined.

"What's our deficit at Phelps? It's over $400,000 a year, and you have very few members. That doesn't mean it doesn't get used, but our operating deficit, which we fund for PARA, is roughly $400,000," Maddox said. "At McAbee, it's $450,000 and again, relatively few members. That doesn't mean they're not valuable. I'm not trying to say that."

Still, Maddox suggested that the city relocate any programs or features currently at the McAbee Center and move them to the expanding Belk Center at Bowers Park, just a few miles away down Loop and Hargrove Roads. McAbee and possibly the Phelps Center near Lake Tuscaloosa could then be sold for private development or explored for public-private partnerships - some alternative arrangement to mitigate the city's losses.

"As we have to come to the reality of reducing $15 million a year out of our budget to meet SSUT, these are the type of decisions we're looking at internally to maximize our resources so we can continue to invest in public safety and those other things," Maddox said.

UPDATE: In a call after this story was published, City Councilman Norman Crow said he could not envision a future where the city sells the Phelps Center, predicting that any deals regarding that property would be additive, and its core function as an activity center would remain.

Crow said that could include a restaurant near the lake shore or a venue for private events -- some revenue-generating use that does not see the entire center sold.

He also added that any deal regarding any of these properties would only come after months of discussion and none are imminent.

To see all 27 properties Moore presented for consideration, scroll through the gallery below, and for more coverage of City Hall and other news in West Alabama, stay connected to the Tuscaloosa Thread.