A stalled $3 million tax incentive deal for the former Leigh Mall and the missing sales data it hinges on has the Golden Triangle Development LINK and Hull Property Group blaming each other for who is responsible.
John Mulherin, vice president of government relations at Hull Group, claims the company was never obligated to obtain tenants’ sales data, while Golden Triangle Development LINK CEO Joe Max Higgins believes the company was both responsible for obtaining the data and aware that was the case.
The two have argued their points this week in emailed letters shared with Columbus City Council members, Lowndes County supervisors and members of the media.
In a Wednesday letter, Higgins said the tax rebate agreement between Hull Group, the city and the county seems like “a giant waste of time.” Mulherin responded Thursday with a letter addressing each paragraph from Higgins, mostly with pointed rebuttals. While Higgins apologized in his letter for its length, Mulherin dismissed it.
“You could have called me or anyone else here to raise and discuss the concerns you have,” he wrote. “Or, you could skip that step and send a letter with a generally false premise to 35 addressees. You should never apologize for showing who you are.”
Higgins said Friday that request comes after months of unresponsiveness on Hull Group’s part.
“When (Mulherin) … said it would be nice to get a phone call, it would be equally as nice to get a text response or a goddamn email,” he told The Dispatch.
Hull Group struck the deal with the city and the county in 2022. The LINK advised the parties involved in the deal, suggesting it follow a structure outlined in the Mississippi Regional Economic Development Act.
Under the deal, Hull Group would pay taxes based on the assessed value of the shopping center, renamed Columbus Place, before renovation. The ad valorem value of any additions would then be repaid to the company, along with 75% on any increase in sales tax collected on non-grocery sales, to cover the costs of property improvements, including flipping the old mall inside-out.
The arrangement was intended to last until the Hull Group recovered the approximately $3.125 million cost of engineering work or for 15 years.
But calculating that increase requires establishing a baseline sales tax using the amount of sales tax each business generated. That information is held by the Mississippi Department of Revenue and can only be released without authorization from each mall tenant.
Mulherin said the company never had a legal obligation to obtain the releases because none of the contractual documents specifically assigned Hull Group that responsibility. On top of that, retailers are reluctant to disclose sales data, he said, so without a lease agreement that requires it, there’s little the group can do.
“Frankly, we have no privity with the state of Mississippi and the DOR, so it’s pretty difficult for us to try and insert ourselves,” he said. “There are other avenues – whether it be the county, whether it be the city, whether it be the economic development team. It’s just not our place to put ourselves in their roles.”
Higgins said it would be unreasonable for the city, county or LINK to obtain the data when Hull Group is the entity with tenants.
“But at the end of the day, as between Hull and the City and County, Hull is (in) the best position and has the most to gain from securing the data to establish the baseline for sales taxes… because without it, the sales tax portion of the incentives cannot be determined,” he said.
City Attorney Jeff Turnage on Friday confirmed to The Dispatch that the city also understood that Hull Group would be responsible for obtaining the releases from retailers but offered support for the company’s plans at Columbus Place.
“The city should be grateful for the investment (Hull Group) has made,” Turnage said. “… If a new or amended agreement can be reached, I will be pleased to provide counsel to the city about its terms.”
A new deal?
On Friday afternoon, Higgins emailed a reply to Mulherin’s Thursday letter, responding in kind paragraph-by-paragraph. At this point, he wrote, establishing a baseline of sales tax revenue is “now impossible due to the passage of time.” Without that, the company is unable to receive any of the tax incentives.
“Until (they) do what we tell them to do, they’re not going to give you the money because there’s no mechanism to get money,” he said. “… They’ve got an incentive package worth $3 million plus that they had 15-years to draw against that at their current pace, they’re drawing about an average of $5,000 a year. They can’t generate from this agreement any meaningful revenue.”
In his letter, Mulherin said there are “several ways” to address having the tenant’s sales data “transmitted directly to the respective municipality.” While he would not elaborate what those might entail, he said there could at least be a city solution.
“All sales tax runs through the city, and it’s yet to be determined – because again, this is a unique situation – how that shall be gathered, but it has to be done,” Mulherin told The Dispatch. “One of the options is (for it) to be done through the city. The city is the one who collects it, so there could be a city solution.”
Higgins believes there’s a way forward as well, but not with the current deal. The “appropriate” way out, he said, is for the company to recognize it cannot live up to the agreement. Instead he suggested a different deal – one sent to the company as an alternate proposal two months ago.
“I think we need to take … that property, and we need to say anything that’s new construction in this – restaurant, out parcels, even a grocery store that’s built in the parking lot, not as part of the mall – you get the same deal,” he told The Dispatch. “Except you get 50% of that sales tax and 50% of that ad valorem tax for the city and the county.”
But if Hull Group wants to continue the back-and-forth, Higgins said he’s ready for that. Regardless of the deal, the company will have to gather that information, he said.
“They hit? We hit them again,” he said. “I’m willing to have the discussion as long as anybody wants to have it. Because here’s what I’m going to tell you, in the interim, they’re not going to get any money because they can’t document it.”
McRae is a general assignment and education reporter for The Dispatch.
You can help your community
Quality, in-depth journalism is essential to a healthy community. The Dispatch brings you the most complete reporting and insightful commentary in the Golden Triangle, but we need your help to continue our efforts. In the past week, our reporters have posted 39 articles to cdispatch.com. Please consider subscribing to our website for only $2.30 per week to help support local journalism and our community.
You can help your community
Quality, in-depth journalism is essential to a healthy community. The Dispatch brings you the most complete reporting and insightful commentary in the Golden Triangle, but we need your help to continue our efforts. In the past week, our reporters have posted 39 articles to cdispatch.com. Please consider subscribing to our website for only $2.30 per week to help support local journalism and our community.
