Oktibbeha County supervisors and Starkville aldermen paved the way for a new Academy Sports retail store last week, approving a $1.5 million-maximum, 15-year tax increment financing plan for the development.
The TIF will help fund public infrastructure improvements in the between Sweet Peppers Deli and Hollywood Premier Cinema, where RM Development I LLC will locate the estimated $8 million project on about 11.3 acres.
An access road connecting Academy Sports and Hollywood Boulevard is expected to be constructed.
Using a 5.5 percent interest rate, the TIF bond is forecast to require up to $150,547 in annual debt service, a TIF proposal prepared by the Jackson-based consulting firm Gouras and Associates states.
For debt payments, Starkville will pledge all of the ad valorem revenue generated from the construction and half of the sales taxes earned once the 62,000-square-foot Academy Sports begins operations. Oktibbeha County will pitch in 50 percent of the property tax revenue it collects off the combined parcels.
Gouras’ report states the development will generate $138,000 in additional real and personal property taxes. Specifically, the city stands to earn an additional $21,000, while taxes collected by the county ($50,000) and Starkville-Oktibbeha Consolidated School District ($66,000) are also estimated to increase drastically.
It also forecasts the project to collect $16 million in annual sales taxes, which should provide Starkville with a yearly $207,200 rebate.
Construction efforts are expected to assign 120 jobs over the undisclosed build time, which should in turn provide an estimated payroll of about $3.2 million.
The overall project itself is expected to create 140 new jobs, Gouras’ report states.
No opposition emerged in either the city’s or county’s public hearings on the TIF. Both aldermen and supervisors approved the measure with little discussion last week.
TIF projects help fund infrastructure improvements – including water, sewer, drainage, roadways, sidewalks, surface parking, signalization and other physical changes to an undeveloped area – and cover architecture, engineering, legal and other soft fees.
The financing mechanism has been recently used to help make improvements with the Cotton Mill Marketplace, Middleton Court shopping center, Mill at MSU development and the Parker-McGill car dealership.
In January, aldermen approved a 100 percent ad valorem, 25 percent sales tax pledge for a $1.5 million TIF to Multisite Starkville, the project’s previous developer, saying further sales tax pledges could hurt the city’s finances.
After LINK Chief Executive Officer Joe Max Higgins said the project was in limbo since the city’s offer came in $300,000 shy of what the developer sought for the then-$11 million plan, aldermen increased the city’s sales tax pledge to 33 percent.
It is not known when the change in developers came after the winter TIF hearings.
Officials with Gouras and Associates and the LINK did not forecast when the project would break ground.
Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch
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