The plan to build a movie theater, hotels, offices and retail stores along Alcovy Road in Covington, known as Covington Towne Center and Project Kitchen Sink, has been shut down.

The Covington City Council received word on Jan. 29 that The Foxfield Company, developer of the project, decided to take the project to another county.

“Overall, we just could not come to final terms as far as the performance criteria and building the roads,” Covington Mayor Ronnie Johnston said. “It [the project] ended up being a pretty complicated thing because the city was involved, the county was involved.”

Ralph Staffins, President of the Covington-Newton County Chamber of Commerce said, "The Chamber is disappointed that it’s not going through. It’s a project we worked on for over a year."

The site sits off of Alcovy Road and backs up to the Covington Municipal Airport. Some of the land was owned privately, but owners had already agreed to sell their property for the development. In November, the city agreed to sell 99.7 acres it owned to The Foxfield Company for $1.52 million. That amount would have gone toward the $2.9 million in infrastructure improvement feeds required by the developer, according to the contract.

Another $1.4 million would have been needed to pay for roads, and the utility infrastructure. Johnston said the city and county had been discussing an intergovernmental agreement, with the county paying for the construction of road into the high-end retail development and the city paying for the installation of water, sewer and gas lines.

“We actually never made it to the part where we sat down with the county to work out an agreement on the infrastructure,” Johnston said. “We couldn’t reach terms that were comfortable for all parties. It’s [been] quite a balancing act. Part of the challenge of this, what made it so unique is the city and county had not had this type of retail opportunity [since I’ve been mayor]. That’s where it became very difficult.”

According to the Covington-Newton County Chamber of Commerce Board of Directors, the developer, Harry Kitchen, CEO of Foxfield, originally said he would invest $200 million in the project. The chamber estimated that local governments would receive $1,316,545 per year in property and sales tax revenues, while the Newton County School System would receive $1,856,875. The project was expected to take 10 years to “build out.” (See article in The Covington News at http://www.covnews.com/archives/200076/.)

Newton County District 5 Commissioner Levie Maddox said he had been impressed with the hard work the Chamber and Economic Development professionals invested in “attempting to bring new retail and hotels to our Community. I also believe the City and County were going to be great in partnering with private development on this project. This partnership should show the community and developers that the leadership is willing to roll up its sleeves and encourage prosperity through development growth and new jobs.

“Our County has a definitive need for retail, hotels, restaurants, plus all of the jobs that come with those businesses,” he said.

But not everyone was disappointed with the developer’s decision to pull out of the project. Council Member Chris Smith, Post 1 East, said, “I didn’t have a good feeling about the project from day one. It was a horrible deal for Covington.”

After a year of negotiations, the developer made the commitment to build a hotel and two office buildings at a cost of approximately $32 million. Later, Smith said, the developer reduced the amount he was willing to invest to $8 million.

“The City received a letter from the developer’s attorney on January 12 in which the developer asked for certain changes to the agreement,” said Covington City Manager Leigh Anne Knight. “The city and the county were to split the infrastructure, which was estimated at $5.8 million, making each entity responsible for $2.9 million.

“One of the changes to the contract requested by the developer was to make the city solely liable to him for the full $5.8 million, requiring the City to pay for the all of the infrastructure if for some reason the County were to later elect not to proceed with its portion,” she said. “As this was not the three party structure envisioned in the contract, the consensus of the council was not to agree to this change.”

Council discussed the letter on January 18 about “how to address the changes and a consensus was reached to hold the developer to the initial investment commitment of $32 million in a modified form,” Knight said.

She said the modification released Foxfield from developing specific types of buildings, such as the office buildings and hotels reference in the original contract, instead allowing a broad range of commercial development.

Otherwise, she said, Foxfield would be expected to proceed as outlined in the contract.

Smith said that after hearing the decision of the council, the developer “sent a termination contract to our attorney saying he was not going to be making that investment.

“I do support retail and commercial growth in our community, but I just felt like the timing and location of the property was not in the best interest of our stakeholders in the city or the county,” Smith said.

Smith said the acreage had been zoned heavy industrial, which he believes better suits the land, which is near the airport. “We’re fixing to build an airport terminal that can be seen and accessed from the property.”

Johnston had high praise for the Foxfield’s president Kitchen. “He is a great guy, and the effort was there, but everything just didn’t line up. We were fortunate to work with him.

"We’re going to keep working various other retail projects, as well as many industrial projects," said Staffins. "We’re going to keep working as hard as we have been working to try to locate future retail development in Covington and Newton County."

Like Staffins, Johnston said there were other retail and industrial developments interested in coming to the community.

“Now it’s back to the drawing board,” Johnston said. “We’re still very optimistic about the community; bringing in more jobs and investments.”