By JACK WEATHERLY
Biloxi has turned a corner in its long recovery from Hurricane Katrina, the recession and the BP oil spill.
It has begun negotiating tougher deals in its economic rebuilding.
Its first contract under new guidelines calls for construction of a 100-room hotel that will employ 45.
In some cases, the city had been giving 100 percent exemption from property taxes for up to seven years on commercial construction, according to David Nichols, chief administrative officer for the city.
Mayor Andrew “Fofo” Gilich said, “We need to tie it jobs and we don’t need to be giving up 100 percent of the property tax,” according to Nichols.
The mayor looks at the gap, the “but-for,” without which a project would not have come about.
In the test case for the new standards, which were approved about 90 days ago, the city sold about 1.75 acres for $1.02 million where a five- or six-story Hilton Garden Inn will be erected.
The developer, Shivam of America, agreed to pay 50 percent of property taxes for five years and to create 45 jobs within two years.
If the jobs are not created in that period, the previous two years’ taxes will be paid in full.
Nichols emphasized that the incentives need to be applied for before the business gets started. “We feel like if your bank’s willing to finance you, you don’t need . . . a tax break.”
In some cases, existing businesses that had rebuilt after Katrina and were back in operation would ask the city for help on their taxes, Nichols said. And in some cases were granted the seven-year, 100 percent exemption, he said.
“The mayor said no more of that,” Nichols said. “We’re not in the business of subsidizing to be subsidizing so people can make more profit.”
Hari Patel, co-owner of the Biloxi-based development company, said construction on the Garden Inn should start in mid-September, with completion in early 2018. The Garden Inn is the first project for the company, which he formed with Sam Bhakta. Patel has built four other hotels in Mississippi – two in Hattiesburg, one in Ridgeland and one in Jackson.
Nichols said that “restaurant row” on Beachfront Boulevard was wiped out by Katrina in 2005, which consisted on chain drive-throughs and the like, has been replaced by five “brand-spanking new” eateries, including The Reef, Shaggy’s and Beach Bums, all owned by Gulf Coast developers.
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