The Lowndes County Board of Supervisors on Monday morning approved a contract establishing about $3 million in economic incentives for Hull Group to begin rehabilitating Leigh Mall.
The agreement must be approved by Columbus City Council, and then sent on to the Mississippi Development Authority and Department of Revenue for review, according to Golden Triangle Development LINK CEO Joe Max Higgins.
“This is a good thing, this is a no-brainer for the county and the city, to see improvements in that property,” said Board of Supervisors President Trip Hairston. “If we end up giving them the full amount of the tax rebates, I think we’ve done ourselves a service by having that mall renovated.”
Under the terms of the agreement, the Alabama-based Hull Group will pay taxes on the mall at its current assessed value, Higgins explained. The ad valorem value of any additions made will be repaid to the company, along with 75 percent of the net sales tax collected on non-grocery sales.
In the event of a grocery store locating in the space, 50 percent of the sales tax generated by grocery sales will go back to the company. The incentives will not include school tax collections.
The arrangement will last until the Hull Group recovers the approximately $3.125 million cost of engineering work to “flip the building inside-out” and of demolishing the Sears Automotive building on the southwest corner of the lot, or for 15 years, Higgins said.
“It’s performance-based,” Higgins said. “If they make progress, it rewards them, and it gives them a cap. In a perfect world, they’d do this in five years and be done, but they wanted the 15 years. … If they don’t make progress and don’t succeed, then they don’t get the reward.”
The Hull Group purchased the mall at auction for $3.5 million in October 2019.
John Mulherin, vice president for government relations at the Hull Group, told The Dispatch the $3 million recovery was necessary to make the project economically viable.
“The reason for the incentive is that it is an extraordinary expense to flip it inside-out,” he said. “The rent you can expect on those outward-facing shops could not cover the expense. But for that incentive Lowndes County talked about (Monday), we wouldn’t be able to do this kind of work and transform the property. It doesn’t make economic sense to do it without being able to (recover) that.”
The money will largely go to engineering and design, the cost of demolition and of reworking the parking lots, Mulherin said.
The work will be done in phases, Mulherin said, but subsequent phases will be on the company’s dime.
“The second phase will be working to get tenants in,” he said. “A lot of tenants there now will go to the outside. Phase three will be putting on a new roof, which we’ll really be doing simultaneously with the first phase. We just separated it out because we didn’t want the city and county paying for that because we’re going to have to put a roof on it anyway.”
The fourth, and final, phase, will be outparcels, he said.
“We will have a tremendous outparcel opportunity,” he said. “We think there are at least three, if not four, outparcel opportunities up front. That’s tenant-specific and driven by market demand, we can’t just say we’re going to bring X, Y, Z here.”
Mulherin said by the time everything is said and done, Hull will have made “in the neighborhood of a $20 million investment.”
Mulherin said that he wasn’t sure when “visible” work would start at the mall specifically.
“Getting the plans completed is job one, and I really don’t know when they will be finished,” he said. “… I think by this fall you will certainly see the transformation of the building, but that’s if you can get glass and air conditioners. The lead times are like eight months out now, it’s incredible.”
The board voted unanimously in favor of the incentive packages.
The city council is supposed to take up the matter tonight.
Brian Jones is the local government reporter for Columbus and Lowndes County.
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