Provisions of the Gulf Opportunity Zone Act (GO Zone) have been used to aid the development of a wide array of projects throughout Mississippi as the state rebuilds from the destruction of Hurricane Katrina. These projects have provided jobs, homes, retail shopping and a variety of products and services.
A list of approved projects for GO Zone bond allocation released by the Mississippi Development Authority reveals multiple housing, manufacturing, health facilities, retail, hotels, food services and distribution projects. A number of projects are located in multiple counties. Coastal counties, the hardest hit by the storm, are not the only areas taking advantage of the legislation. There are projects in Madison, Warren, Lamar, Jones, Hinds, Forest, Rankin, Lowndes, Adams, Greene, Stone and Lauderdale counties.
The whole state is benefiting from the incentives, but the importance of the GO Zone legislation to the Coast’s recovery cannot be over emphasized, said Brian Sanderson, president of the Gulf Coast Business Council. The act’s provisions for accelerated depreciation and tax incentives have been helpful.
“In addition to helping those who lost businesses, the legislation has encouraged much needed capital from others outside the area to invest in the rebuilding of the Coast,” he said.
He points to businesses all around the Coast that have utilized the act’s incentives such as a new retail center on busy Cowan Road just north of Pass Road that used 50% GO Zone financing. Another is an $8-million outpatient imaging center being built near Ocean Springs Hospital that is also financed through the act. A group of approximately 20 Coast doctors joined forces as Physicians, LLC, to build the 26,000-square-foot, two-story Ocean Springs Imaging Center, which they plan to lease to Singing River Hospital System.
Chris Chain, owner of Renovations of Mississippi, is based in Columbus but works with historical projects all over the state. He calls the incentives an intricate part of trying to get back and rebuild.
“Most projects I’m dealing with will all use some GO Zone incentives,” he says. “These projects can take low interest funds instead of the accelerated depreciation or 50% depreciation on equipment. I have to use the total package for most people I’ve worked with.”
The GO Zone is one piece of the puzzle along with façade grants, low-interest commercial loans, Mississippi Department of Archives & History grants and new markets tax credits. “It all comes together into the whole package,” he said. “It will hurt when this stuff goes away in 2008.”
He is hopeful the 26% tax incentive for historical properties will be extended by Congress.
“We really need to keep it going. We need to get this message to Sen. Thad Cochran,” he said. “It is crucial to the Coast, and we’re running out of time. It took so long to get cleaned up ,and local governments had to make code and zoning changes before rebuilding could begin.”
Chain points to a good example of renovating an old building for a new use. He is working with the Intervest Corporation of Madison on renovating the old Pascagoula High School, built in 1938-39, to be used for elderly housing. It’s a $6.5-million project. Two buildings in the complex won’t qualify for another six years, but the main buildings qualify now.
“It’s a great project, one of the best things that can be done with these buildings,” he said. “We’re trying to make this project go and need the extensions.”
The old Vaughn, Kramer and Hancock buildings in downtown Gulfport are also prime prospects for renovation using GO Zone incentives. “It’s a no-brainer to use these old buildings, especially with the need for housing,” Chain says. “The old Hancock Building has 16,000 square feet and would be good for mixed use — offices, restaurants and apartments.”
A long time advocate of preserving historic buildings, he says the structures offer more space and usefulness while maintaining their charm. “Why tear them down and build something new?” he wonders.
Contact MBJ contributing writer Lynn Lofton at firstname.lastname@example.org.