OKTIBBEHA COUNTY – A developer is looking to build a Candlewood Suites off Highway 12 in Starkville but is asking for $1 million in tax rebates from the city and county to make it happen.
While aldermen approved a notice of intent in November for the city’s portion, Oktibbeha County supervisors Monday opted to take the matter “under advisement” while they look closer at the numbers. Supervisors plan to revisit the issue during a recess meeting Dec. 10, and aldermen will consider finalizing the agreement Dec. 17.
That timeline should keep the developer at the table, Golden Triangle Development LINK CEO Joe Max Higgins told the board of supervisors Monday.
“They want to get this done by the end of the year,” Higgins said.
The 85-room hotel would take about $10 million to build, Higgins said. It would sit on a vacant lot between Academy Sports and Hollywood Premier Cinema.
If built, it would knock a dent in what the LINK estimates is a 300-room shortage in Starkville’s hotel capacity. That is most notable on Mississippi State University football game days, Higgins said, but those are far from the only days hotels are full.
“I was at MSU last year, and we met with a prospect and they said they could not get rooms in Starkville and had to stay in Columbus,” he told the supervisors. “… Guys, it was spring break. But that year, they had a landscape architecture convention. … That’s stuff you don’t think about.”
Higgins said Candlewood’s location seeks to capitalize on proximity to Cornerstone Park, the city’s new baseball and softball complex on the west side of town that hosts tournaments through most of the year.
“We’re starting to tell industrial prospects, ‘If you know you’re going to be here a lot, don’t depend on that you can always get a room,’” Higgins said. “More and more of them are buying or leasing condos or apartments, so that when their executives come in, they know they’ve got a place to stay.”
The tax rebate, by the numbers
While the LINK specializes in industrial recruitment, Higgins said it provides technical support for retail projects upon request.
A representative for the Candlewood Suites developer contacted the LINK several months ago, Higgins said, and after several discussions, both parties agreed to pitch a Regional Economic Development Act agreement to the city and county. The LINK has recently facilitated such agreements with Columbus and Lowndes County for the Leigh Mall and Rural King projects on Highway 45 in Columbus.
To raise the $1 million for Candlewood Suites, Starkville would commit half its net new sales tax and all the net new property tax collections from the redevelopment for up to 12 years. The LINK is asking the county to dedicate all the net new property tax collections from its general fund millage toward the project over the same term.
The city, county and Mississippi Development Authority all must approve the rebate plan, Higgins said. Both the city and county would assess and collect the taxes, then kick back a percentage of those collections in the form of a rebate to the developer according to the terms of the agreement until the $1 million threshold is reached.
Once Candlewood Suites opens, the clock starts on the “performance-based” incentive.
“You agree on (an amount), and when they get to that number, they’re done,” Higgins said. “If they never get to that number and the time expires, sorry, so sorry.”
He also stressed the rebate would come from collections on new value. Both the city and county would continue to keep tax collections on the predevelopment value of the property.
Speaking to The Dispatch, Higgins estimated the city rebates would contribute $65,000 per year, while county rebates would come to roughly $39,000, based on expected tax collections at the site. At that rate, the $1 million would be met in a little less than 10 years.
But County Administrator Wayne Carpenter expressed concern about the county’s share.
Originally, Higgins said, the LINK hoped the city would agree to contribute 75% of sales tax collections at the site for up to 10 years. Instead, aldermen chose 50% and 12 years.
That reduced the city’s annual contribution to the rebate by about $9,000, Higgins told The Dispatch. If the agreement takes the 10 years the LINK expects, that could shift as much as $90,000 more of the burden to the county over that time to meet the developer’s $1 million request.
“The whole share got rearranged when the city went to 50%,” Carpenter said during the meeting, noting he wanted more time to analyze the numbers.
Higgins agreed with Carpenter but offered a slew of immediate tax benefits the county would receive even during the rebate term.
The county would fund its rebate through its general fund levy only, with its special levies – for things like roads and bridges, OCH Regional Medical Center and East Mississippi Community College – not included.
Higgins estimated the project would generate $21,000 more annually just for the roads and bridges levy, as well as about $15,000 more total for the other various special levies.
He said the hotel would generate more than $85,000 annually for Starkville-Oktibbeha Consolidated School District, which would also be exempt from the rebate agreement.
Zack Plair is the managing editor for The Dispatch.
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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 43 articles to cdispatch.com. Please consider subscribing to our website for only $2.30 per week to help support local journalism and our community.
