Jackson’s Watkins Development has reached a deal with the City of Meridian to transform a vacated Cowboy Maloney store into an $8.2 million police station.
The City is to put $2.1 million into the project and rent the building from Watkins for 20 years at an annual cost of $305,000, adjustable for inflation every five years. At the end of the 20 years a $100 payment to Watkins will give the City ownership.
The soon-to-be-converted Cowboy Maloney store on 22nd Avenue was formerly a super market.
Mayor Cheri Barry noted in a press statement that the lease-purchase arrangement frees the City from the risk of cost over-runs and gives a way to build what is being called the Meridian Law Enforcement Center without raising taxes.
The City will not have to issue bonds for the project, though the city’s Urban Renewal Authority will issue a pair of bonds: one for $2.35 million and another $2.1 million of short-term debt.
The $2.1 million the City is putting up for the project comes from drug seizure funds and will pay off the short-term bonds once the police department moves into the building. Together, the drug money and short-term bond transaction help leverage the deal to attract sufficient tax credits to make the deal work, the mayor’s office said in analysis of the finances.
Minneapolis-based U.S. Bank is to provide $2,325,100 to an investment fund from which Watkins Development will draw funds for the project. Citizens National Bank in Meridian is to contribute $1.24 million in return for state tax credits.
The City’s annual rent will go toward retiring the project’s debt.