HORN LAKE — There were large obstacles to be overcome in doing the groundwork to prepare for DeSoto Commons, a multi-use commercial development that could eventually represent an investment of $500 to $750 million.
A third of the property in the proposed development along Interstate 55 was either in the flood plain or floodway. High voltage electric transmission lines and sanitary sewer lines had to be relocated. Expensive new traffic arteries were needed. And there were 13 parcels of land that had to be obtained for the 440-acre development that meant dealing with 55 to 60 property owners.
“The land deals were costly and hard to put together, and a third of the development was under water,” said Scott Rightnowar, vice president of leasing and development for Parkwood Properties, the developer of DeSoto Commons. “This project would have been cost prohibitive without the public/private partnership.”
The assistance of the City of Horn Lake and DeSoto County was considered a critical element in putting together a project that is expected to create thousands of jobs and millions in tax revenues.
Horn Lake Mayor Mike Thomas said when Parkway Properties first approached the city, there was a lot of excitement — but there was also concern. The city is located only five miles from the city limits of Memphis, Tenn., and saw huge growth in the 1990s as Memphis urban sprawl spread to Horn Lake. About 1,000 homes were added in the city between 1984 and 1989, and the city had difficulties keeping up with the infrastructure demands of rapid growth.
“The positive growth was clouded by greater demand for services,” Thomas said. “By 1989 the city had severe financial difficulties. We wanted to maintain growth but keep property taxes at the same rate.”
In order to do that, the city decided to rely more on sales tax revenues rather than property tax revenues to fund growth. They used a Tax Increment Financing (TIF) bond to fund infrastructure development for a shopping center, and that was successful in helping greatly increase the city’s sales tax revenues.
When it came time to consider the DeSoto Commons project, Mayor Thomas said the city had learned how much it could benefit from extra sales taxes generated by new retail developments. And DeSoto Commons would also include office, residences, warehouses, and entertainment businesses. But in order to not impact the city’s bond capacity, the city used a Special Assessment Tax to fund infrastructure development.
“That doesn’t count against us in bond capacity,” Thomas explained.
“The Special Assessment Bond provided us an opportunity to do something we wouldn’t otherwise have been able to do,” Rightnowar said. “It was a great opportunity not just for the city, but for us. There was no way we could have pulled this off without the city and county. There costs were so prohibitive that this property would have gone undeveloped.”
Rightnowar said his company was attracted to Horn Lake for the development because of the rapid population growth and the resulting increase in retail sales. A Wal-Mart SuperCenter in the area, for example, has the highest sales of any Wal-Mart in the country.
Rightnowar said that kind of statistic gets retailers’ attention.
Parkway Properties thinks enough of the support it has gotten from the city and county providing infrastructure development that it even lists the city and county as partners in promotional materials. Besides helping fund infrastructure, the mayor provided help in obtaining wetlands permits needed to allow the project to happen.
Thomas said that besides employment and tax revenue from the project, it is also eliminating a major eyesore. He said a 350-unit trailer complex at the site of DeSoto Crossing used “to make developers cringe” when they were taken on a tour of the city.
DeSoto Commons is working to land a regional mall. The master plan also calls for restaurants, hotels, offices, flex space, theaters, a child care facility and multi-family residential housing.
About 84,000 people live within a three-mile radius of the project, with that number expected to climb to more than 122,000 by 2004. The five-mile radius population is 130,000 in 2000, and is expected to climb to 169,000 by 2004. The average household income in a five-mile radius is $50,000.
For more information about DeSoto Commons, visit the Web site www.desotocommons.com.
Contact MBJ staff writer Becky Gillette at firstname.lastname@example.org or (228) 872-3457.