STARKVILLE — All that’s apparently keeping Miskelly Furniture from opening a location in the old Vowell’s Marketplace is whether the city and county will abate a developer’s property taxes.
Roy Oswalt, through his company 44 Properties, purchased the property on Highway 12 after the grocery store closed in November 2021.
Renovations divided it into three retail spaces, with Ace Hardware and Starkville’s second Dollar Tree signing leases for the two smaller spaces, attorney Julie Brown, who was representing Oswalt, told Starkville aldermen at their Tuesday evening meeting.
Miskelly, a furniture store based in Pearl, is interested in the 35,000 square-foot anchor space but needs a lower rent point to sign the dotted line, Brown said.
“They could have gone to Oxford, Tupelo or Columbus. But they picked Starkville,” she said. “But, of course, they’re like everybody else. They’ve got a budget, and they need to make it work.”
If the city and county agree to abate the property taxes for the development for 10 years — costs Brown said Oswalt would otherwise pass on to the tenants — Miskelly will sign a five-year lease with the option to extend it for 10 more, and the long vacant site could be occupied by summer.
“That would bring the rent down to where Miskelly would be very happy to come in here,” she said.
The three stores combined, Brown said, would employ 20 or more.
Under a relatively new city ordinance, aldermen can approve property tax abatements for up to 10 years if owners invest $500,000 or 50% of the value, whichever is greatest, for improving a commercial property. A certain amount must also go toward facade and landscaping.
Brown said the development’s value sat at $3.8 million and Oswalt had invested about $3.5 million.
The county doesn’t have an ordinance, but state law allows supervisors to approve tax abatements. Brown intends to appear before the supervisors in March.
As it sits, she said it would generate $88,000 in property taxes — $32,000 for the county, $18,000 for the city and the rest for Starkville-Oktibbeha Consolidated School District — but school taxes would be exempt from abatement.
The property value will likely double once tenants are operating, Brown said, meaning $100,000 in property tax loss between the city and county per year, if abated.
Still, Brown posited sales tax would more than make up for the loss, with the furniture store alone projecting $4 million in annual sales.
Aldermen weren’t totally convinced Tuesday, instead tabling the matter and requesting Brown provide projected sales information for the other two stores.
Ward 3 Alderman Jeffrey Rupp, during discussion, floated the idea of abating the value of the improvements and continuing to collect $18,000 a year, similar to how Columbus handles abatements.
He also warned of sales cannibalism, which would impact the overall benefit of the development’s sales tax revenue.
“I want to be cautious on how much sales tax it’s going to generate because if you’re going to Ace Hardware, does that mean you’re not going to East Mississippi Lumber?” he asked. “Does that mean you’re not going to Lowe’s? Is that creating new tax dollars? I think it will with Miskelly. I think (that’s) a great get.”
Likewise, Ward 5 Alderman Hamp Beatty and Ward 1 Alderwoman Kim Moreland, serving her first meeting on the board, advised caution.
“I’m for getting them here, but I don’t want to give more than we have to to get them here,” Moreland said.
Ward 2 Alderwoman Sandra Sistrunk said she supported either a seven- or 10-year abatement of the full amount, pointing to the board approving on Tuesday’s consent agenda a 10-year abatement for “Project Squeeze,” a $9.5 million industrial expansion also expected to create 20 jobs.
“In that case, the benefit is the jobs,” she said. “In this case, we’re being asked to give an abatement to bring some life back to a building that’s sat empty since November 2021 and will likely sit empty for a lot longer if this … center portion falls vacant. Because it’s a difficult size to fill. It’s too small for a Hobby Lobby and too big for a smaller business looking for a space.”
Originally, Corner Market planned to locate in the old Vowell’s but backed out last year. Brown said Tuesday it was because renovations, particularly the HVAC system, weren’t complete in a suitable time frame.
Zack Plair is the managing editor for The Dispatch.
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