When the City of Hoover announced its plan for the proposed Riverwalk Village development almost a year ago, on June 28, 2023, it was touted as a win-win for taxpayers and the developer.
In a series of resolutions passed in November 2023, the city agreed to two separate leases with Healthcare Resources, the project developer. According to business records, Robert Simon is the project’s registered agent and signatory.
In the first lease with the city, they agreed to rent out a floor of office space. In a second lease with the Hoover Healthcare Authority, founded in 2022 and funded entirely out of the city’s general budget, the City agreed to rent out the rest of the building.
Both leases were approved by the city council in November 2023, with the initial pre-payment of $3,000,000 due immediately. While Mayor Frank Bracoto testified that he had not read the lease agreements, he estimated the total rent and incentives for the project, as laid out in the two lease agreements, to be around $40,000,000 without these additional costs.
City Council president John Lyda testified earlier this month that “in terms of dollars,” the incentive package included in the deal was “one of the largest that we’ve ever approved.” At the council meeting in November Alan Paquette testified that the final deal was “a quarter of the incentive package” the city started with.
Since then, the City Council has needed to adopt two budget amendments to address the project’s escalating costs: one amendment was for $500,000 additional money purportedly to cover legal fees to defend against opposition to the proposed Certificate of Need that is the cornerstone of the facility and the other to increase the building’s monthly operating expenses.
At last week’s Council Work Session, Hoover’s Chief Financial Officer, Jennifer Cornett, acknowledged that the new resolution was necessary because the city had signed the original lease without a comprehensive understanding of all the associated costs. This admission underscores some of the questions raised during testimony at the CON hearing.
“At the time that we signed that agreement, we didn’t know the amount of the monthly operating expenses that would be the City’s portion,” Cornett said in a video provided by The Hoover Channel.
She noted that the budget amendment would authorize a monthly expense of approximately $27,000. These payments result from the project being a triple net lease, in which the city assumes all operating costs for the building and its maintenance.
Cornett was asked about the city’s plan to move employees to the facility, but she didn’t know who would be moved or when. For now, despite the growing costs and uncertainty on the pending Certificate of Need, the building remains empty.
*This story was originally published on 1819 News by the same author.
