Developer says he prefers sell option, and he will respond to whatever state decides to do
The District at Eastover, a proposed $150-million mixed-use development at the Old Blind School property in Jackson, may have new life.
Just before lawmakers took a session break in early April, Gov. Haley Barbour vetoed a bill that would have authorized the Department of Finance and Administration to sell the property to a developer. Barbour said he wanted the state to at least have the option to lease the land for development.
Lawmakers passed a new bill that meets that criterion just before the session ended April 23. The new legislation gives the state the option to sell or lease the property for development. The bill was scheduled to hit Barbour’s desk late last week. Multiple attempts to reach Barbour’s staff for comment in the middle of tornado recovery operations last week were unsuccessful.
Ted Duckworth, president and CEO of Duckworth Realty in Jackson, submitted a proposal related to the old legislation that would have called for him to lease the land from the state and build and operate the District at Eastover.
Negotiations between Duckworth and Secretary of State Delbert Hosemann, who has to approve any land deal the state enters, broke down over lease terms late last year.
Duckworth said then that he could only pursue the project if he could buy the property.
Last week, Duckworth said he still prefers a sell option, but didn’t rule out responding to the state’s request for proposals related to the new legislation if and when one is issued.
“The purchase is the preferred route for us, but we haven’t seen what the RFP is going to look like,” Duckworth said. “So it’s kind of hard to say, but we know this is not an automatic for us. Whatever RFP they put out, we’ll respond to it.”
Hosemann said he had not seen the final version of the bill lawmakers passed, but said he wasn’t married to either a sell or a lease.
“I think that makes sense (sale/lease option),” he said. “I thought Gov. Barbour made sense in his veto message when he said the maximum value ought to be obtained from it. I think this whole process at looking at the land is designed to maximize the rate of return to the taxpayer. If leasing it produces more money, then I’m in favor of that. If a sell produces more money, that’s fine, too.”
Hosemann’s office has started taking inventory of state lands to determine what the state’s using and what it’s not, and what might be available for development. He expects to have a fairly comprehensive list to give to lawmakers when the 2011 session starts in January
“I think we’re going to find a number of different parcels (that are available),” Hosemann said.
Hosemann gave a reporter a history lesson when asked if the long-term return to the taxpayer would be maximized by selling the land or leasing it.
“We have 62 counties that have 16th Section Lands,” he said. “The ones north of the Chickasaw Cession, from Columbus to Tunica, sold their 16th Section Lands in the early 1800s. When I tell you we’re now making $77 million annually, it comes from only 70 percent of the (available) 16th Section lands.”
About 20 years ago, Hosemann said, those counties sued the state saying they were losing money because they had sold all their land and students in those school districts were suffering.
“So now, the state paid $12 million in lieu payments two years ago to the districts,” Hosemann continued. “As the revenues have gone up the last two years, the lieu payments have gone up in northern counties like Lee and DeSoto.
“So when I look back on it, we could have sold 16th Section land every year since 1817, and we would have had nothing to show for it. I must admit knowing now that we’re getting $77 million a year in revenues and we own over a billion dollars’ worth of timber, it’s hard to say that we should sell it all. I try to take a longer-term view of this. Would it be better off taking the money now and spending it, or are we better off holding onto that property for a long time? It’s a difficult decision, particularly when the state is in a budget crisis. We need to look for every single dollar, but we don’t need to be myopic about it and just look right here in front of us.”
If Duckworth ends up winning the right to develop the property, the District at Eastover will look a lot like it did when the design was first unveiled. It will feature a mix of retail and residential space, a hotel and a movie theater.
“Ultimately it’s going to be market-driven,” Duckworth said. “Some retailers are looking at their options, not all of them, but certainly more than there were a year ago. The concept has not changed substantially. The tenants are not lined up at this point, but the design of the project is still pretty much intact. We don’t have any plans to change it.”
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