CottonMill project hits another snag (Update)

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Published: December 8,2009

Tags: construction, education, real estate

The 107-year-old E.E. Cooley Building, right across from the campus of Mississippi State University, started out as a cotton mill and currently houses MSU’s physical plant.

The 107-year-old E.E. Cooley Building, right across from the campus of Mississippi State University, started out as a cotton mill and currently houses MSU’s physical plant.

Mississippi State officials will not comment on $176-million deal moving forward

 

The 107-year-old E.E. Cooley Building right across from the campus of Mississippi State University started out as a cotton mill and currently houses MSU’s physical plant.

There are bigger plans for the building, but they will move forward without one of the developers of the CottonMill Marketplace, a proposed $176-million mixed-use development with the Cooley building as its anchor. The project would transform the Cooley Building into a conference center and office space. The development would also include a hotel and retail space.

Comvest Properties of Biloxi had partnered with Nicholas Properties of Ridgeland to develop CottonMill. That changed about two weeks ago, when Nicholas bought out Comvest’s share.

Brooks Holstein, managing member of Comvest, said in an e-mailed statement that he had “chosen to withdraw from the project in order for my company to pursue other opportunities, which are more in keeping with our core expertise and asset class.”

Holstein did not return a message left on his cell phone seeking further comment.

Mark Nicholas, of Nicholas Properties, said Comvest would continue to help his company line up tenants for the retail portion of the development.

One of the tenants in the office portion of Cooley would be Mississippi State. Nicholas said he and the school are currently exchanging proposals over the terms of that agreement and over terms for the sale of 12 acres across from MSU’s campus that includes Cooley. The College Board has authorized MSU to sell the land.

Mississippi State got the all clear from the College Board to sell the land over a year ago, and Nicholas has been trying to get the project off the ground for two years, but an agreement between the two has been hard to come by. A public entity entering into a partnership with a private one can be tricky to navigate, but Nicholas is confident a deal is close.

“We are still in negotiations with the university, and we hope to finalize those relatively soon,” Nicholas said. “With a project of this magnitude, it takes time. I think by the end of the first quarter we’ll have everything in place. Construction would start, we hope, by the middle of next year.”

MSU spokesman Kyle Steward had not returned multiple messages seeking comment by the time the Mississippi Business Journal went to press Thursday afternoon.

Once construction starts, Phase I, which would include the conference center, office space, the hotel and a parking deck, would take between 18 and 24 months and cost around $70 million.

Nicholas hopes the project would have a transformative effect on Starkville. The Cooley Building sits on an area that serves as a defacto front door to the MSU campus, yet has remained undeveloped and prone to blight. The land behind the development was once home to a movie theater and a Burger King, but both have since closed as most new development in Starkville has occurred on the West side of town.

“(Mississippi State) is the only Southeastern Conference school that doesn’t have a conference center,” Nicholas said. “It’s really going to help them.”

Because the Cooley Building was placed on the National Register of Historic Places in the 1970s, it qualifies for historic tax credits. Those combined with tax increment financing (TIF) bonds the City of Starkville has already approved and $22 million in federal new-market tax credits and private money will finance the project.

“Never again will we be able to align all the incentives that we’ve been able to with this project,” Nicholas said. “This is a one-time shot.”

Not including construction jobs, Nicholas estimates that between 500 and 600 jobs will arise from CottonMill once the entire project has been completed.

“It will have a huge economic impact on this region,” Nicholas said.

 

Initial story:

STARKVILLE — One of the developers of the Cotton Mill Marketplace, a $176-million mixed-use development in Starkville, has pulled out of the project.

In an agreement finalized last week, Comvest Properties of Biloxi transferred sole ownership of Cotton Mill to Nicholas Properties of Ridgeland. The two companies had partnered on the project until the split.

Representatives from Comvest and Nicholas did not immediately return phone calls seeking comment.

The centerpiece of Cotton Mill is the E.E. Cooley Building, which sits directly across from the Mississippi State University (MSU) campus. The building currently houses MSU’s physical plant. The school owns the building, but under the project’s plans, would sell it to the developers. In 2008, the College Board authorized the school to sell 12 acres on Highway 12, which would include the Cooley building, for $6 million.

As part of the deal, MSU would have to be a tenant in a portion of the Cooley building, plus make an annual contribution toward the facility’s operating costs. Finalizing that deal has been the primary obstacle preventing Cotton Mill from getting underway.

Financing for the project would come from the private sector, TIF bonds issued by the City of Starkville and historical and new market tax credits. Tax credits would pay for about $22 million of the project’s total cost.

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