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USDA loan program could help Pearl land Bandits

PEARL — Now that the Jackson Bandits have narrowed their site choices down to two — Jackson and Pearl — the Business and Industrial Loan Program could be a factor in their decision of whether to go to either Jackson or Pearl.

“We met with all the principals that were handling this project along with the mayor in Pearl to make sure they understood what all was involved in applying for our funds,” said Nick Walters, state director of rural development for the U.S. Department of Agriculture. “We have not heard back from them (the Bandits) yet to say they’re applying.”

But, Walters said, the loan program is a part of the discussion. The Pearl site was recently found to be eligible for the Business and Industrial Loan program, a federal program through the USDA in which the federal government guarantees 60% of the loan. It is up to whoever is doing the project to go to a lender to borrow the money. The program is available to developers, not city and county governments.

Said Pearl Mayor Jimmy Foster “We assisted them in obtaining the way to get that (guarantee). It is up to them to put in an application to a lender.”

Walters explained there was a question of whether or not Pearl would qualify to participate in the loan program. In order to participate, the proposed arena site must be a designated rural area. The site was found to qualify because of language in the U.S. Code and regulations. The language states that if the site in question is separated by a river or body of water and there is an open field or open country between the city in question that is not a park, then such a site could qualify for the program. The state USDA’s legal counsel confirmed that the Pearl site would qualify for a waiver.

Walters said the USDA doesn’t have a waiver to grant until they have an applicant, so the Bandits are deciding between site locations.

The Business and Industrial Loan Program can be used for working capital, site development, construction or to buy inventory, but it is set up to benefit a community, not an individual borrower, and a waiver must be granted in order for someone to participate in the program. Essentially, the state’s USDA gets the paperwork from the lender on the guarantee program.

“We still do our due-diligence to make sure we’re willing to back this up,” Walters said. “All our folks work hard to make sure the project to be funded is sound and make sure it’s going to work right.”

The state USDA has two different types of loan programs that fit what the city of Pearl is trying to do: direct and guaranteed. The guaranteed program is lender-driven. An institution makes the loan and the state’s USDA backs up to 90% of the loan — in the case of the Bandits, 60% of the loan. The direct program is where the state USDA makes the loan directly.

“We want to do everything we can to help the City of Pearl get this project and that’s not because we’re against Jackson,” Walters said. “But we know that rural development and the City of Jackson don’t have any common linkage. We want to do everything we can to help people who qualify for our programs, and the City of Jackson doesn’t qualify.”

Foster said if the Bandits chose to come to Pearl it would be not only great for the city but for the county as well.

“Obviously that would be something that would be at least a tourism draw to the county and with the amount of sales opportunities that are out there with restaurants, it would be a very positive thing,” he said.

But there is no deal in writing yet.

“We’re just waiting on them (the Bandits),” Foster said. “We’re doing things to try to make it as attractive as possible, and if they choose to come we’re ready to have them.”

Brad Ewing, general manager of the Jackson Bandits, said the final decision on the site has been a difficult one to make because of the good options they have been faced with and everyone’s enthusiasm and willingness to work on the project.

“I’ve thought more than once that we were pretty close (to making a decision), and it’s kind of become an inching along process with more detail attached to the whole process than what I expected,” he said. “When we think everyone’s done and happy, we’ll have a final deal.”

Ewing added that the reality of getting into the details and getting something together, along with the hockey season starting up, has required the Bandits to take their time.

“I think it’s important to recognize that a lot of people have put in a lot of time to put together the right package of elements to encourage them to select the site,” he said.

Contact MBJ staff writer Elizabeth Kirkland at ekirkland@msbusiness.com or (601) 364-1042.

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