Getting OK on buildout money will not be an easy task
Developers of the Farish Street Entertainment District have changed their leasing strategy to include paying for the buildouts of the clubs and shops they have restored along the first block of the former business and nightlife hub of Jackson’s African-American community.
Watkins Development, which has a 45-year lease with the Jackson Redevelopment Authority for two blocks of Farish Street, expects that doing the tenant buildouts will get the project completed sooner. But the development company must clear a pair of major hurdles — gaining Jackson City Council and Jackson Redevelopment Authority approval of $8 million in Urban Renewal Bonds.
Watkins Development sustained a set back when the Jackson City Council declined to make Farish Street, which has already been designated an urban renewal area, eligible for the bonds. Council action would not have constituted approval of the bond issue but would have cleared the way for a later vote on it. Now the council wants a review from the planning commission before taking a vote.
Councilman Kenneth Stokes said the city has not thoroughly examined the financial health of Watkins Development, the company behind restoration of the historic King Edward Hotel in downtown Jackson.
“No way in the world is a bank going to lend anybody $8 million without a thorough audit,” Stokes said, and suggested the city’s due diligence should be no different.
Watkins Development has submitted financial information to the Jackson Redevelop-ment Authority that will be reviewed today (Nov. 21) by the authority’s finance committee. The authority’s full board is to consider the bond request at a 10 a.m. meeting Wednesday at the authority’s office, 200 S. President St. If approved, the bond authorization would face a vote of the City Council.
Last Tuesday’s council delay added to the time pressures David Watkins, president & CEO of Watkins Development, is facing. Watkins said in an interview outside the council chambers that he intends to apply for a Gulf Opportunity Bond allocation, a move he said would save the project about $600,000 by allowing Watkins to sell bonds with tax exempt interest.
The plan is to convert the Gulf Opportunity Bonds to Urban Renewal Bonds that would be backed first by Watkins Development and the Redevelopment Authority’s Farish Street properties and secondly by the City of Jackson, Watkins said.
Though gaining an $8 million Gulf Opportunity Bond, or GO-Zone, allocation would save the developers significant money, Watkins may be too late in applying. Applications have been submitted for all but $70.1 million of the state’s GO-Zone allocation and an application from a developer of the city’s planned convention headquarters hotel is pending for that remaining amount, according to the Mississippi Development Authority. The MDA administers the federal post-Katrina recovery bond program for the state. The program expires Dec. 31 and requires that all bonds allocated through the program be sold by then or be voided.