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Judge OKs Westin funding, cites ‘public purpose’ in tax money as debt collateral

Westin_Jackson_rgbBy TED CARTER

Hinds Chancery Judge William Singletary on Tuesday approved allowing $10 million of Jackson tax money to help backstop the debt for a $60 million Westin hotel planned for downtown.

In giving a nod to a contribution agreement that pledged the public money, Singletary rejected local developer Don Hewitt’s argument that Mississippi Constitution prohibits using public money for private purposes. In this instance, Singletary said, the bonds carry an urban redevelopment designation and serve a “public purpose” by providing Jackson’s Central Business District with sorely needed revitalization.

“Urban renewal is impossible without the assistance of private enterprise,” he wrote in the 3-page ruling. “Involvement of a private entity does not negate the public purpose.”

Hewitt hopes to take part in future development of a convention center hotel in downtown Jackson and worries that the Westin will diminish demand for another hotel.

He argued in a hearing earlier this month that a pledge of tax money as collateral for $30 million in bonds for the Westin put the Hinds County Board of Supervisors and the Jackson Redevelopment Authority at odds with a long ago state Supreme Court ruling and a string of opinions from Mississippi attorneys general.

In the 1944 ruling noted by Hewitt, the high court cited the constitutional provision against using public money for private purposes in letting Jackson out of a well-drilling deal with a private gas company.

As part of the Westin funding agreement, Hinds County is pledging $20 million of state money for the 204-room hotel planned for 315 Tombigbee St. Legislators approved the $20 million in backing during the recent 2015 session.

Singletary cited the Legislature’s action as further evidence of the Westin’s “public” purpose, though Hewitt’s challenge did not address the Hinds County pledge. It instead focused on the financial support for the project from the City of Jackson and the Jackson Redevelopment Authority.

Meanwhile, the Jackson Redevelopment Authority has issued a Request for Proposals for a 300-room convention center hotel. The RFP promises JRA help with financing the hotel but other than a pledge of sales tax rebates over a 15-year period, the RFP does not detail specific assistance.

Hewitt has argued from the start that building the Westin will kill the need market for another downtown hotel.

Whether private developers agree will be known in coming weeks as the June 30 deadline for submitting RFPs nears.

A further ruling on public financial involvement in private projects is expected in a case before the Mississippi Supreme Court that challenges the City of Hattiesburg’s use of public money to back the debt for a private sewage system. A Chancery Court judge ruled in Groundworx vs. Hattiesburg that the state constitution forbids using general fund tax dollars as collateral for a privately built and owned water and sewer plant.

 

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