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Nicholas: Cotton Mill project is still on track

March 19, 2012

By CARL SMITH

The Oktibbeha County Board of Supervisors voted 3-2 Monday to enter into an interlocal agreement with the city of Starkville and adopt the town’s 2006 redevelopment plan following public discussion on the Cotton Mill Conference Center and Hotel at Mississippi State University tax increment financing plan.
After the board’s decision, Cotton Mill developer Mark Nicholas said his group is close to finalizing the project’s financing and he hopes to “turn dirt” by the middle of the year.
The two-phase development will bring a conference center and office space to MSU’s Cooley Building, provide a 150-room hotel and construct retail and residential units along Highway 12. Nicholas said construction should last 18 months.
“The conference center is the most important piece because it will become the economic driver for the city of Starkville and Oktibbeha County,” he said. “It will bring thousands of people into the city on a per-year basis, and they spend money.”
Many city and county representatives said the development could serve as an important economic accelerant in Oktibbeha County. Nicholas said few areas of the U.S. are attempting developments of such large magnitude.
“We’ve made great headway and have had great support from the university, state and local banks. Our plans are complete, we’re finalizing and we’re continuing to push. We’ve had a lot of hurdles, but we’ve cleared every hurdle that has come in front of us and will continue to keep pushing to make sure this development happens,” he said. “Economic development is like water — it floats the boats. When you bring economic development to a community, those dollars fund everything; everyone benefits.”
During the discussion, Nicholas, the board of supervisors, Starkville Mayor Parker Wiseman, Butler Snow Attorney Lucien L. Bourgeois and Jones Walker Attorney Randall Wall addressed various public questions involving the TIF agreement and how money would be spent. The plan would help finance up to $8.5 million in reimbursements to the developer for infrastructure improvements. The county would waive 95 percent of ad valorem taxes while leaving school taxes untouched.
Some members of the public expressed concerns over the TIF agreement, saying it was a tax increase. Wall said the bonds will not be issued until the expenditures are made and the tax base is there for payment. Payments would be made from the new taxes generated, not current ad valorem streams, Nicholas said. Bourgeois said the first phase of development could add $3.5-4 million in new tax streams for the county. Both attorneys said there is no risk to the county in regard to repaying the bonds.
“TIF projects have developed to reduce risk, not to increase it. If this was like the old days, the developers would ask for the (street improvements) first,” Wall said. “TIFs became popular to decrease the risks on both sides.”
Both attorneys and Nicholas would repeatedly tell a small number of public participants the TIF agreement is not a tax increase.
Although TIF funding represents what District 2 Supervisor Orlando Trainer calls “thinking outside of the box,” the mechanism itself is not new to Oktibbeha County. Supervisors reminded the public of a similar measure used for developing the Middleton Court Shopping Center a few years ago.
“It’s highly unlikely over the next 20- to 30-year development cycle you will see anything of the magnitude of this project,” Starkville Mayor Parker Wiseman said during the public discussion. “The state views this project as important because it’s willing to invest $12 million in state aid. The only reason the state puts money in like that is because it believes it is significant.”
One member of the audience in favor of the development said the project and its financing represents an ideological choice of whether residents want Starkville to grow or remain a small town and asked supervisors to look forward instead of backward.
Another against the financing package said she believes TIFs are dangerous because they do not require voter approval, divert tax revenue and lack transparency.
Jennifer Gregory, Greater Starkville Development Partnership vice president for tourism, said the city currently turns down almost every medium-sized conference request from the state tourism office because of a lack of conference space. Gregory was present during Monday’s meeting and spoke in favor of both the TIF plan and the Cotton Mill development on behalf of the GSDP.
“So many of our communities have convention centers that are quite successful. Not only are we missing on these opportunities, but we’re also missing out on opportunities to showcase our community,” Gregory said. “Having a convention center would be beneficial to the local tourism industry and specifically to the 2 percent food, beverage and hotel tax collections. When we talk to employment recruiters for our industries that are recruiting specialized engineers, it’s hard for us to explain why Starkville is so great; when they get there, they understand. (The development) provides another opportunity to bring educated professionals to our community.”
Gregory said she believes the success of the Cotton Mill project will provide economic development traction in the community which will bring in other influential endeavors.
“This project could be the tipping point for other major projects. We’ve heard from major developers outside of Starkville that say they’re waiting to see what happens with the Cotton Mill development before investing in Starkville. I think the county today sent a message it’s willing to provide incentives to bring in developments,” she said. “I think it’s imperative the whole community work together to try to make this project happen. We’re counting on the success of this project in order to take us even further.”
After a local developer said his own conference center development plans were in limbo until the Cotton Mill project is finalized, District 1 Supervisor John Montgomery said he was all for increasing the tax base, but he has a moral obligation to keep the playing field level.
Before a motion was made, Trainer said the board should continue public discussions and exercise its due diligence.
“The size and scope of the project have changed since the beginning,” Trainer said. “I’m not of the opinion to throw the whole thing in the ditch, but rather I’d like to start again at square one and get an understanding of how everything would.”
Board President Marvell Howard said he was amazed anyone could be hesitant about supporting a project which could create jobs and increase ad valorem values at virtually no risk.
After a motion was made, the vote passed with Howard, District 4 Supervisor Daniel Jackson and District 5 Supervisor Joe Williams in favor and Montgomery and Trainer against.
“I couldn’t see how (one would be against the Cotton Mill project) given what a positive impact it’ll have on the city, county and university if it takes place,” Howard said following the meeting. “I think what has happened is since the first inception of this project we’ve had a hospital bond issue that’s passed, the city schools have passed a bond issue and the project has taken some time to get off the ground. I think those factors play a role (in the public’s perception).”

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