August 17, 2019 9:59:07 PM
The Starkville Board of Aldermen will vote Tuesday on a tax increment finance plan for a retail shopping center development project at the intersection of Highway 12 and Industrial Park Road.
If the TIF plan is approved, the city would issue up to $3 million in bonds to reimburse the developer, Castle Properties, for the costs of certain infrastructure built at the retail center. Then it would repay the bonds with sales and property taxes generated at the center for up to 15 years.
Mark Castleberry, owner of Castle Properties, said the center would include a few restaurants in addition to stores and should create 150 to 200 new jobs.
"It would be a very fast return on the investment for the public dollars," Castleberry said.
The shopping center would be built in a couple years after Garan Manufacturing, the current occupant of the intersection, builds and moves into a new location at the North Star Industrial Park near Highways 82 and 389.
An ongoing civil lawsuit has challenged part of the rezoning of the park's property from commercial to manufacturing, but Garan is relocating to an area outside the scope of the suit, so the outcome will not interfere with the relocation, both Castleberry and Mayor Lynn Spruill said.
Under the TIF, Castleberry must build the development and show at least a year of sales tax performance before the city would issue the bonds, Spruill said, a process that would take at least three years. Once the bonds are issued, half the sales tax and all the city and county ad valorem tax generated at the center would go toward the bonds until they are repaid. Starkville-Oktibbeha Consolidated School District would receive all of its ad valorem millage from the development immediately.
The TIF bonds would only reimburse Castle Properties for costs associated with infrastructure such as roads, parking lots, sidewalks, storm water mitigation, water and sewer at the site. It would not refund the costs of the actual retail buildings.
Aldermen did not have a quorum and therefore was unable to vote on the TIF during a July 18 joint session with the Oktibbeha County Board of Supervisors and the Oktibbeha County Economic Development Authority. The county approved the TIF, but city approval is necessary for it to go forward.
Starkville's history with TIFs
Spruill said she is "extremely supportive" of the TIF and the project.
"I think it's well-needed in an area that is likely not to develop anytime in the near future," she said. "... I'm a big believer in TIFs if the numbers are right, and I believe the purpose for TIFs is redevelopment, which is what this is."
But Ward 5 Alderman Hamp Beatty takes issue with the job creation aspect of the pro-TIF argument. Industrial jobs like the ones at Garan provide living wages and benefits, while retail jobs can be lower-paying and part-time, so the two should not be seen as equal, he said.
Developers should "stand on their own," but they approach the city with tax incentives built into their business models because Starkville has a history of allowing TIFs, Beatty said.
"I guess I'm a dinosaur, but I remember days when businesses did or didn't do projects based on what the potential was to make a profit in that region," he said. "I just don't think the taxpayers necessarily owe any developers a tax incentive."
The board has approved TIFs in the past several years for projects including Middleton Court, the Cotton Mill Marketplace, Academy Sports, the Parker-McGill car dealership and another Castle Properties project, the Mill at MSU.
The board shot down a TIF request for Walmart Neighborhood Market on Highway 12 North in 2016 on the premise that the corporation could fund its own development, which it subsequently did.
Unlike Walmart, though, Castleberry said this development won't be built without the assurance of a TIF.
Ward 4 Alderman Jason Walker said he has voted both for and against TIFs in the past and said he looks at each one "on a case-by-case basis."
In 2016, he supported the Academy Sports and Parker-McGill TIFs because they created true public infrastructure that linked existing roadways. He did not support the Walmart TIF because it would have created a "road to nowhere" and because the development was going to happen anyway, he said at the time.
Ward 1 Alderman Ben Carver said he is "pro-TIF in this situation" and has routinely supported past TIFs as "big, smart developments."
He described TIFs as a tool to bring in developers that otherwise might not come to Starkville. Summer is a tough season for retail because most of the college student population is not around, but during the school year, sometimes as many as 100,000 people are in town at once for events such as Mississippi State University sports, Carver said.
Some of the possible tenants for the shopping center have been wanting to come to Starkville for years, Castleberry said.
"They won't come to the market unless they get the right location, the right synergy within the center and the right price," he said. "Some of the lease rates we've had to offer them to bring them into the market are below cost, but the city and the public will benefit greatly."
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