Paying for tenant buildouts should hasten Farish opening, its developer says

November 20, 2011

Economic Development

A need to speed up the opening of the Farish Street Entertainment District led Watkins Development to decide to do its own buildout of the clubs, restaurants and shops along the initial block of the long-planned project.

The new plan would allow the interior work and customizing of the spaces for tenants to begin right away rather than waiting for tenants to obtain financing to pay for the buildouts, said David Watkins, president & CEO of Watkins Development. The half dozen 15-year leases already signed, including ones for the B.B. King’s Blues Club, Zac Harmon’s Subway Lounge and Wet Willie’s frozen drink bar, will have to be renegotiated upward to reflect the buildout costs, Watkins said.

The recently signed tenants and prospective ones are pleased with the new lease arrangement, he said, noting it lets them avoid the upfront costs of the buildouts.

Watkins conceded his development group has been feeling pressure to get the project completed and the entertainment district opened. With approval of $8 million in Urban Renewal Bonds, the buildouts on the initial block from Amite Street to Griffith Street could be finished in six months, he said.

The restoration deal and its reliance on Urban Renewal Bonds and Historic Restoration Tax Credits and New Market Tax Credits make it incredibly complex, Watkins noted. But he added that with the outside pressure the project is under, “We can’t get it done fast enough.”

About $8 million has gone into the project so far, including a $4 million investment from the Mississippi Development Authority, according to Watkins. “We’ve put up $3.6 million of our own money.”

An additional $3 million or so from the City of Jackson has been used for water and sewer installations, lighting and other infrastructure, city officials say.

Watkins, meanwhile, is feeling more than outside pressure to complete the project and begin collecting lease payments. He began having to pay the Jackson Redevelopment Authority rent for the spaces in September.

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