August 6, 2014 10:29:54 AM
After two days of lobbying, Golden Triangle Development LINK CEO Joe Max Higgins secured a combined $10 million commitment from Starkville and Oktibbeha County that will develop a new industrial park and could add more than 1,000 jobs in the next decade.
Starkville aldermen on Tuesday committed $5 million toward the Innovation District -- a 300-plus acre industrial park near the Highway 25 and Highway 182 bypass -- with a 6-1 vote after county supervisors approved a similar $5 million resolution of support Monday.
Only Vice Mayor Roy A. Perkins, who routinely lobbies against all tax increases, voted against the matter.
The LINK will now develop a memorandum of understanding between the city, county, Oktibbeha County Economic Development Association, Starkville Electric Department, 4-County Electric Power Association and other key players in the development to fully outline responsibilities.
The action by the two governing boards does not immediately issue their respective $5 million bonds -- that is tentatively scheduled later this fall -- but a process identifying underwriters, bond attorneys and other procedural matters is expected to begin either in tandem with the memorandum of understanding or shortly thereafter.
Starkville is expected to spread its debt service -- about $400,000 annually -- across 20 years, and a 2-mill property tax increase is expected to follow once the city issues its bonds. A similar financing package is expected from the county.
After running the numbers at the board table, officials said the tax increase roughly translates to an additional $20 annually for every $100,000 of home value.
LINK officials developed plans for the new industrial park as a way for Oktibbeha County to enter the world of industrial enticement in a meaningful way. The county's lack of shovel-ready sites already cost the area one chance at enticing an automobile parts manufacturer to the region, Higgins told both supervisors and aldermen, because large-scale industries that provide numerous blue-collar jobs have no place to locate.
The site's 326 acres in west Starkville are currently under option by the LINK, and purchasing processes, due-diligence studies and infrastructure improvements now have funding source with the city's and county's actions this week.
Combined, the parcels are expected to yield more than 1 million square feet of future industrial capacity.
Numerous Starkville business leaders spoke in favor of the bond issuance during a public comment session two hours before the board broached the LINK's request, and Ward 1 Alderman Ben Carver later acknowledged their support of a tax increase even though some of the property owners would be the ones to face the brunt of its effects.
He acknowledged an additional tax increase would be hard for some to swallow after coupling the move with increasing payments for Starkville's new city hall and a possible $2.55 million property purchase that would move Starkville Police Department and the city's municipal court system to Cadence Bank.
Supervisors brought up similar fiscal worries Monday, specifically identifying 2015's state-mandated school consolidation as another source of a future tax hike.
New industrial developments, Higgins countered, could help alleviate property tax burdens on homeowners in the county and provide a massive influx of new funding streams for city and school district coffers.
A $50 million project similar to the one Starkville could not compete for and subsequently lost, Higgins said after a short bout with arithmetic, would yield the city an additional $165,000 from tax payments. While an abatement could delay those collections about 10 years, school taxes cannot be waived. That same investment would produce about $400,000 at the current millage rate for education.
City officials seemed stunned at the potential impact.
"What you're saying is that one project could get the school district back the same amount of money as we're paying now?" asked Ward 5 Alderman Scott Maynard.
"Let me tell you, it's real," Higgins replied, tempering the board by saying a $50 million project must come to fruition first.
For Starkville to collect the same amount of taxes in new residential projects, the city would require 250 new $200,000 homes.
"These numbers seem almost foreign to us because we've never had a large-scale, industrial capital investment like that before," Mayor Parker Wiseman said. "We talk about development in terms of houses and strip malls. (The potential industrial developments are) a different class, all together."
Like their county counterparts, aldermen quizzed Higgins about electrical capacity at the proposed park and Cornerstone Park, a mostly vacant industrial park south of the Miss. Highway 25 and Miss. Highway 12 bypass.
Cornerstone falls within 4-County Electric Power Association's service area, while the Innovation District is located within both 4-County and Starkville Electric Department's zone. SED can provide at least 10 megawatts to its portion of the new park, and General Manager Terry Kemp said Monday that amount could easily increase to about 20 megawatts.
4-County, however, can only provide about 2 megawatts to both Cornerstone and its portion of the new industrial park. To increase its capacity, Lynn Timbrook, the company's manager of engineering, said it purchased property near Cornerstone for a new substation that will power both industrial sites.
Timbrook declined to say when the substation would come online, but Higgins has repeatedly identified 2017 as a targeted year for the increase in power at Cornerstone.
"We asked the question in the early days if Starkville could wait until 2017. We can get you in the game quicker," he said in reference to the Innovation District.
While the new industrial park will set a standard for quality projects -- both visually appealing buildings and significant advanced manufacturing -- the LINK will reserve Cornerstone for "shade-and-shelter" businesses that simply need a metal building and care not for design standards, Higgins said.
"This is an expensive business, but the rewards are great when you win," he said before the board approved its resolution of support. "You are rolling the bones. This is a chance at having the ability to win."
Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch
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