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State’s chief site selector: Search starts for new tax HQ

Though proximity to the state’s new Data Center off Lakeland Drive could weigh heavily in the site selection, the only certainty for the new home of the  Mississippi Department of Revenue is that it will be housed in a state-owned building or built on vacant land the state owns.

In either instance, the site must be within the Jackson city limits and total costs must not exceed $39 million.

Those are the orders state legislators gave the Department of Finance and Administration in sending the department on a $3 million mission to select a site by Oct. 1.

“We are going to start a whole new process,” said Kevin Upchurch, executive director of the Department of Finance and Administration, or DFA, an agency that serves as the state’s property manager.

That means it’s back to the starting line for a process that so far has involved more than a year of looking and evaluation of sites. Revenue Commissioner Ed Morgan has been leading that search.

“We started with all the state-owned property. Then we put the word out we’re looking… for any and all properties” that could provide 190,000 to 200,000 square feet or accommodate a building of that size, Morgan said.

A sampling of where Morgan looked: Metrocenter Mall, the former WorldCom headquarters, Capital Towers, Regions Plaza and facilities and parcels in Rankin County. “We looked at everything,” he said. “We’ve been doing it for a year-and-a-half. We’ve talked to everybody who had something to put on the table.”

Two state-owned parcels received the most attention, though no one is calling them the top choices at this point.

One is an approximate 10-acre parcel along the north side of Lakeland Drive that abuts the lot on which the state’s Workers’ Compensation Commission office sits and extends east nearly to Ridgewood Road.

The other is a parcel to the north that extends east from near the I-55 Frontage Road along Eastover Drive to Ridgewood Road. It is already home to the Mississippi Library Commission and a number of other state agencies as well as Mississippi Public Broadcasting headquarters.

What both vacant sites have in common — and makes them so enticing — is close proximity to the State Data Center situated between Lakeland Drive and Eastover Drive.

The closer the revenue headquarters is to the Data Center the more speed and efficiency will be achieved in telecommunications and data transmission operations, said Kathy Waterbury, Revenue Department spokeswoman.

“We need to be closer to the Mother Ship. It enhances our telecommunications all around,” she said.

That’s important, Waterbury added, when you process 100,000 automobile tags a year and 900,000 vehicle titles, in addition to millions of tax returns.

Morgan said the analysis “brought to us” rated the Lakeland Drive parcel next to the Workers’ Comp headquarters the highest. But like Upchurch, he emphasized that at the moment “there is no specific location” ranked as a top choice.

Absent a new home close to the Data Center, just being in Jackson – and within the Capitol Complex range — will increase data processing speeds ten-fold, according to Waterbury. The fiber-optic capacity is much greater within the Capitol Complex ring than in Raymond, she said.  “We’ll go from plus-minutes to plus-seconds” in processing speeds.

Upchurch said he would look closely at everything Tax Commissioner Morgan has evaluated.

He said that since he’s just been brought into the loop and must answer to a lot of people, including the governor, he wants to start fresh and look “in every nook and cranny.”

“We might find a diamond in the rough” among existing state-owned buildings, Upchurch said.

Upchurch and Morgan say that intangibles such as the boost the Central Business District would get by moving the Revenue Department and its 500 employees downtown can’t be considered until the operational factors are carefully weighed. “First, you have to define what the needs of the Department of Revenue are,” Upchurch said.

If all else is equal, “those are the intangible tie-breakers that make a difference,” Morgan said.

Kym Wiggins, spokeswoman for the Department of Finance and Administration, said buying a privately owned parcel or building would be out of the question unless the department received a “legislative intent” notice that would allow that.

She and Upchurch noted that the department has a policy study underway looking at whether it is more cost efficient for the state to do long-term lease deals with private developers rather than continue to build its own facilities. Some states have found it more beneficial to lease while others have concluded ownership is the best route to go, Upchurch said.

“Some have moved into the leasing world and now are trying to get back into the ownership world. It comes down to what is going to be the best fit.”

The private sector and Jackson city officials who want the tax dollars hope a shift to increased leasing will come at some point. The metro Jackson office market has 1.8 million square feet of vacant space that needs to be put to use, noted one commercial real estate professional.


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