The Andalusia City Council this week approved a partial sales tax rebate for up to six new, nationally-known retail tenants at the Covington Mall expected to generate 150 jobs and $18 million in annual retail sales.

Amendment 725 to the Constitution of Alabama 1901 authorizes certain municipalities in Covington County, including Andalusia, to participate in economic development. 

City Administrator John Thompson said a similar agreement was approved in early 2020, when the owners of the Covington Mall, LLC, brothers Michael and Shaun Jackson, were on the brink of making announcements about major retailers. However, those plans were postponed by the pandemic. 

“Their tenacity has paid off,” Thompson said. “They were in the final stages of lease negotiations, and this is the final piece of those negotiations.”

According to the agreement, the City will rebate 3 percent of the sales taxes collected for the largest retailers for five years, and 2 percent of the sales taxes collected by the smaller retailers for five years. The rebate will be payable to Covington Mall, LLC, to help offset its development cost in preparing for the retailers. Local sales taxes are 3.5 percent, and state law prohibits the abatement or rebate of the half-cent sales tax earmarked for education. 

Mayor Earl Johnson encouraged council members to support the agreement. 

“We are basically getting nothing in sales taxes from what we all know as the Covington Mall at this time,” he said. “This development will generate substantial sales taxes, increased ad valorem taxes and new business licenses.”

A formal announcement of the retailers planning to locate here is expected this summer.