Two more malls approved for tax money to expand
Published: July 15,2014
Tags: Andrew Mattiace, economic development, H.C. Bailey Cos., mall, Mattiace Properties Inc., Mississippi Development Authority, Mississippi Legislature, Pete Alman, Pinelands Lifestyle Center, Renaissance at Colony Park, retail, Ron Harvey
FLOWOOD and RIDGELAND — Mississippi taxpayers could help pay for two more malls that squeezed in approvals before a law allowing sales tax subsidies expired June 30
The Mississippi Development Authority approved applications in June for $29.6 million in tax money to expand Renaissance at Colony Park in Ridgeland and $48.8 million to build Pinelands Lifestyle Center in Flowood. That brings to five the number of qualified malls.
It’s unclear if either development will be built, at least at the scale required to obtain subsidies. If they are, it could push the subsidy tab across the state to $233 million for the one year the tourism-promotion law covered shopping centers with Mississippi-themed amenities.
The rapidly mounting costs of the incentive originally aimed at one mall in Pearl helps explain why lawmakers declined to extend it earlier this year. Though defenders said the subsidies increase jobs and tourism, most outside economists pan them as moving around pre-existing economic activity while generating low-paying jobs with few spinoff benefits. Critics of Mississippi’s failure to fully fund its public school formula pointed to the mall subsidy with particular disdain.
Projects were automatically approved if they met certain guidelines. The state rebates 80 percent of sales taxes collected at a development for 10 years, up to 30 percent of development costs.
The law requires that developers spend at least $50 million on a retail center with at least 50 tenants and 300,000 square feet, as part of a development worth at least $100 million. To achieve the subsidy, developers also have to spend at least $1 million on Mississippi art, historical markers or audio visual equipment used to showcase the state’s artists, or offer space to MDA for tourism promotion for at least 10 years.
“There is a good possibility we won’t ever qualify,” developer Andrew Mattiace said yesterday of expansion plans at Renaissance, which opened in 2008 in a joint venture between Mattiace Properties Inc. and H.C. Bailey Cos. “The question is whether we’re ever going to attempt to build something that big.”
The application approved by MDA shows a $98.7 million development eligible for up to $29.6 million in sales tax rebates. Developers would add 330,000 square feet of retail space, more than doubling the existing size of the mall.
A second phase of Renaissance has always been planned, but Pinelands would be an entirely new shopping center, spearheaded by Ron Harvey, who leads Freedom Real Estate of Slidell, Louisiana. He told MDA he plans to buy property facing busy Lakeland Boulevard in Flowood from property owners who developed the Pinelands residential subdivisions and construct 750,000 square feet of space, including stores, theaters and a hotel.
It’s unclear if Flowood, which hosts four large shopping centers flanking the corners of Lakeland Boulevard and Old Fannin Road, could support so much additional development. The application approved by MDA shows a $162.5 million investment, which would be eligible for up to $48.8 million in sales tax breaks.
Harvey could not be reached for comment yesterday. Real estate agent Pete Alman, who’s trying to sell the land, declined comment.
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