To remedy what Mayor Toby Barker called a “Tale of Two Hattiesburgs” – with certain areas like midtown and the U.S. 98 corridor thriving, while other areas still need attention – Barker took the opportunity during a Monday evening work session of the Hattiesburg City Council to propose a new revitalization program with the Southern Mississippi Planning & Development District aimed at commercial redevelopment east of Interstate 59.
“The District at Midtown is the largest retail development that we’ve seen on the east side of the interstate in some time, and it certainly shows the purchasing power potential east of 59,” he said. “We now regularly hear of new development opportunities in between (Mississippi) 49 and 31st Avenue, which is a good thing.
“But what our administration wants – and what I believe this council wants – is that kind of momentum throughout the city.”
The program, which council members are expected to research over the next few weeks, would entail a combination of retail sales tax reimbursements and ad valorem reimbursements aimed at redeveloping and filling vacant properties and blighted buildings. Through a “Tri-Party Agreement” between the SMPDD, the city and developers, the city would rebate a portion of new sales tax collected on specific sites back to developers.
City officials would choose a particular area of the city, along with a certain percentage for rebate.
“So if the state collects 7 percent sales tax, and of that 7 percent the city gets back 18 and a half percent, the developer would then be granted a certain percentage of the city’s 18 and a half percent of the original 7 percent,” Barker said. “So we want to be able to market this as another retail development tool to spur more development east of Highway 49.
“In wards 1 and 4 east of 49, we might offer, say, 35 percent of the city’s sales tax diversion. In wards 2 and 5, where the challenges for development are greater, we might offer 50 percent.”
The process would begin by a developer expressing interest to city officials in the redevelopment of a blighted or vacant building, at which point the developer would submit an application for the reimbursement program. Once the application is approved by SMPDD and city officials, the Tri-Party Agreement would then be brought before city council members.
If approved, the developer would then enter into a program agreement with SMPDD before beginning redevelopment of the building. After the construction is complete and a Certificate of Occupancy has been received, the developer would then submit their verified project costs to SMPDD and would begin to receive annual reimbursement grants after one calendar year of operation.
“So after that calendar year, they will send that sales tax to the Mississippi Department of Revenue, who will send 18 and a half percent back to the city’s general fund,” said Lindsay Ward, Senior Project Manager for SMPDD. “So whatever that agreed-upon percentage is, it will be channeled back through SMPDD – we would be the conduit that they would then get that reimbursement grant for.”
Allison Beasley, Economic Workforce Development Division Director for SMPDD, said the program has been recently launched in Gautier and Biloxi and has helped draw in developers and new retail sales tax to those areas.
“We had some buildings that had been vacant for quite some time, one of them for many years,” she said. “So this can help bring in retail sales tax in areas that developers might not otherwise choose to be there. So it’s an incentive, by all means.”
Ward 4 Councilwoman Mary Dryden said she objected to the proposal that her ward would receive a lesser rebate amount than some of the other wards.
“We’re dealing with old buildings, and it’s more expensive to repair them than it is to do new construction,” she said. “And that causes an economic hindrance in itself – I think it should be the same (in all wards).