A tax increment financing plan was accepted by the Starkville Board of Aldermen Tuesday night as part of the upcoming Garan Manufacturing Redevelopment Project.
The project would see Columbus-based development firm Castle Properties renovate the lot currently holding the Garan Manufacturing building on Highway 12 into a 90,000-square-foot retail center.
Garan announced last month its intention to build a new building and move into the Northstar Industrial Park outside of Starkville.
At Tuesday's meeting, Chris Gouras, a representative of Castle Properties, told Aldermen Garan is planning to move in roughly one year.
Two retailers have already announced plans to move in to the proposed center. Aldi, a German-based grocery store chain, and TJ Maxx both have expressed interest in the project, with both having been considering entering Starkville for years, Gouras said.
Gouras said other retailers were in serious talks to enter the retail center but were not yet ready to publicly announce their intentions.
Combined, Gouras said Aldi and TJ Maxx will fill roughly half of the retail center's space, roughly 45,000 square feet.
The project is expected to cost $20 million.
Initially, a plan was presented to city and county officials last month, but an agreement could not be reached at the time. Since then, the deal has been reworked by all parties, particularly the TIF included to be offered to developers.
Originally, $3.4 million was to be offered in TIF bonds, but the new deal lowered that number to $3 million. Additionally, the city initially was pledging 100% of sales tax to reimburse the development costs, but that number has been dropped to 75%.
The bonds will last for 15 years.
Ward 2 Alderwoman Sandra Sistrunk said the idea behind lowering the amount of pledged sales taxes was to avoid giving away too much tax money that was already being accounted for.
"All of those will not be new taxes," Sistrunk said. "Some of those will be, probably, walking down the street from some other business, and so we wanted to, to the extent possible, give us some margin in there that we were not using taxes that were currently collecting toward a new TIF."
The bond, Gouras said, is at least three years away from being issued, as Garan must relocate and the new retail center must be constructed.
Ward 5 Alderman Hamp Beatty was the most critical board member regarding the TIF plan. He said incentivizing businesses to come to Starkville was giving them unfair advantages compared to the existing businesses in the city.
Following discussion, Alderman approved the TIF plan to be issued at a later date with a vote of 5-2. Vice Mayor Roy A. Perkins of Ward 6 joined Beatty in voting against the TIF.
For more on Tuesday night's meeting, read Wednesday's Starkville Daily News.