Business representatives questioned New Albany’s support of commerce during a Sewer Board meeting on Thursday.
Lainey Habeeb, of Commercial Kentucky, and Amy Cordova, of PMR Co., petitioned the board to adjust a tap-in fee of $27,000 for Five Guys Burgers and Fries, a restaurant chain that is scheduled to open two locations in Floyd County.
The board previously approved a tap-in for Five Guys at 2221State St., which is within the city limits. The second location along Charlestown Road is just outside New Albany boundaries, making the fee nearly double the amount of the State Street location.
Habeeb and Cordova — who represent 15 investors who own three strip malls along Charlestown Road including the location where Five Guys is scheduled to lease — said the amount could result in losing the tenant.
“We’re just looking for help,” Habeeb said, though the board ruled they could not lower the fee or allow for an extended payment based on city and state regulations.
Habeeb argued Five Guys would not use the amount of sewage reserved. However, the fee is based on capacity, not usage, and differs depending on the size of a building, type of establishment and other factors such as the amount of seating.
Due to state parameters, the board must reserve a certain capacity at the sewer plant for every tap-in approved, regardless of how much of that amount is actually utilized.
“We’re obligated to follow those rates,” Lee Buchanan, attorney for the board said. “We have no authority to change those rates.”
Habeeb argued jobs and tax revenue would leave the area if Five Guys reneges on opening at the Charlestown Road location.
“We’re all going to lose if they leave,” she said.
But board members including Bill Utz said the city actually gets none of the revenue, since the location would be in the county.
Habeeb said they were looking for any solution that would keep Five Burgers in Floyd County. She suggested they could show the amount of usage over a period of a year to possibly have the tap-in fee adjusted down the road.
Utz said the amount would not change since it’s based on capacity and not usage.
Utz suggested the investors combine funding or borrow money to assist Five Burgers in paying the fee and working out their payment schedule.
“There is a certain cost in doing business,” he said.
Habeeb responded that investors have already extended finances for construction, legal and overhead fees.
Board President Ron Carroll said the city has its own financial woes to worry about.
“We’re freezing our budget at 2007 levels — people aren’t even going to get raises,” he said.
Cordova said there are several empty buildings along Charlestown Road where businesses used to be located. She added the tap-in fee is four times the amount Five Guys would have to pay in Alabama, Florida and even Louisville, which would encourage the business to locate to other places besides New Albany and Floyd County.
Board member Elizabeth Coyle said the other locations mentioned have issues with the Environmental Protection Agency, and the board would not set precedence and risk problems with the EPA.
Sewer credits
• The board issues sewer credits, which are interchangeable with gallons used daily, to businesses, organizations and residential developers and also charges a tap-in fee for getting on the city’s system. The board has a credit limit — Bill Utz described the gallons available as being “like gold” due to the amount that can be purchased. Tap-in fees are required before an entity can begin discharging into the city’s sewer system.
Floyd County
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