Starkville aldermen could approve a new incentive package for developer Mark Nicholas’ Cotton Mill hotel project Tuesday that would negate a previous tax increment financing pledge.
Documents provided for the 11:30 a.m., special-call meeting state Nicholas is seeking construction reimbursements through the Mississippi Tourism Project Initiative Act, which would offset infrastructure costs associated with his planned boutique hotel between the previously developed Cotton Mill Marketplace and Mark Castleberry’s Mill at MSU.
Once finalized, the Mississippi Development Authority-managed program would divert 80 percent of local sales tax collected from the project for up to 15 years and pay for MDA-approved expenses.
In 2014, Starkville approved an amended $8.5 million-maximum TIF package for the entire Cotton Mill Marketplace project, which included the shopping development, planned hotel and about 16.2 acres of future development.
Documents supporting the special-call meeting’s agenda state Nicholas “shall not pursue or apply for the sales tax rebate under the TIF plan to the city for the tourism project, or any additional sales tax rebates under the TIF plan.”
An estimate of how much sales tax is expected to be reallocated through the tourism program and an overall project estimate were not available in the city’s documentation.
A call to Nicholas went unreturned Monday.
Ward 2 Alderman Lisa Wynn, who called for the meeting along with Ward 1 Alderman Ben Carver, said his investment represents a $21 million investment and includes the hotel, a steakhouse and retail space, and would create about 120 post-construction jobs.
“It would create a great economic impact for our city,” Wynn said in an email to The Dispatch. “I am a huge supporter of healthy economic development projects that contribute to tax revenue and create jobs. I am prepared to raise my hand in support of this economic development measure.”
Project questions
Once headed toward foreclosure, Nicholas told aldermen in October his 2-acre parcel east of Cotton Mill Marketplace was back on track to becoming a 100-plus bed Holiday Inn within a year.
Property sales published in local media outlets and scheduled last year were eventually delayed, then Nicholas said the project was moving forward with a new financier and contractor.
It is unknown if the hotel project will remain under the Holiday Inn moniker or if it’s a different business.
A sign for Azlin’s Steakhouse was placed on a billboard listing Cotton Mill Marketplace businesses shortly after the development’s construction, but the restaurant never materialized in the shopping area.
The state tourism rebate program allows qualified tourism-related projects — theme, water, entertainment or outdoor adventure parks; educational centers and museums; convention centers; and others — to use a portion of the sales taxes generated from their developments for reimbursement of costs incurred during construction.
Those incentives are also available to full-service hotels with a minimum private investment of $15 million and a private investment of at least $200,000 per guest room or suite, with a minimum of 25 guest rooms or suites and guest amenities such as restaurants, spas and others as determined by MDA.
All projects seeking the tourism rebate must be certified by MDA. Once the total project costs have been established, 80 percent of eligible sales tax collections will be given as a rebate to the applicant for 15 years or until the applicant has recouped 30 percent of the total project.
At least three aldermen — Ward 3’s David Little, Ward 4’s Jason Walker and Ward 5’s Scott Maynard — were out of town Monday, and it is unknown if they will attend Tuesday’s meeting.
“I have concerns in discussing TIF and tax breaks when the full board is not available to hear those requests,” Maynard said.
Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch
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