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Flowood retail center gets extra time to qualify for sales tax rebates


A Louisiana real estate developer has received a four-year extension to qualify for $48.7 million in Mississippi sales tax rebates by completing a retail center on Lakeland Drive in Flowood.

The rebate for the $165 million Pinelands Lifestyle Center would come from a defunct state incentives program for new retail centers that offered Mississippi-themed amenities. Legislators declined to renew the retail incentives in the 2014 session and let them expire on June 30 of that year. Pinelands Center developer Freedom Real Estate Investors, however, received a certificate earlier that month for the $48.7 million in rebates administered by the Mississippi Development Authority.

The catch was that Freedom Real Estate would have 24 months to complete the Pinelands Center planned for 130 acres owned by Jackson Municipal Airport Authority. Freedom principal Ron Harvey Jr. of Slidell, La., did not gain a lease approval from the Airport Authority until mid December 2015.

With a tentative lease agreement in hand, Harvey persuaded MDA Executive Director Glenn McCullough Jr.  to give him four more years to complete the retail project. “This project did receive an extension for 48 months from the original expiration date on the certificate. That extends the project to June 2020,” MDA spokesman Jeff Rent said. “The extension was granted on Jan. 11, 2016.”

This extension is apparently the first agreed to by the MDA. Rent said last week he knew of none that had been granted but Monday clarified that the MDA did grant Pinelands Center the extra 48 months.

The debate over whether to kill the incentives for tourism-themed retail centers brought a lot of gripes from lawmakers. They questioned the approximately $155 million in lost sales tax money the rebates represented and the appropriateness of subsidizing businesses to compete against un-subsidized ones. Opponents also questioned the quality of the mostly low-paying jobs the centers would provide.

The tourism-incentives law, which legislators expanded in 2013 to cover shopping centers, rebates 80 percent of sales taxes collected at a qualified retail center over 10 years, or until collections reach 30 percent of the construction costs.

Pinelands was one of five retail centers to qualify for the rebates. The others are Outlets of Mississippi in Pearl, which opened three years ago; expansion of Renaissance at Colony Park in Ridgeland; the Outlet Shops of the Mid-South in Southaven; and Gulf Coast Galleria in D’Iberville.

Freedom’s Harvey agreed to pay the Airport Authority $25,000 for a 270-day option to lease the 130 acres at Airport Road and Lakeland Drive. The amount of the lease payments won’t be determined until completion of a pair of appraisals of the property.

For the Airport Authority, the lease would be a welcomed source of income for a municipal airport that has struggled to offset the loss of Southwest Airlines in June 2014. The airport has several hundred more acres it wants to market for commercial development.

The Pines Lifestyle Center deal would mark a good start to that effort, according to Airport Executive Director Carl Newman, who emphasized the deal’s value in his State of the Airport address earlier this month.

“Our most recent land development initiative with Freedom Realty, on airport property, speaks to the exponential economic impact of land development and revenue to our economy,” he said.

The retail center could be a boost to Flowood’s coffers as well. Newman is not entirely sure whether the sales tax collections would go to Flowood or Jackson. He said it would go to Flowood if the land on which the center is to be built is land the airport bought after it received a state charter in the early 1960s to build the airport in Rankin County. “I suspect that is the case,” Newman said in an interview Monday.

The developer won’t pay property taxes on the 130 acres since the Airport Authority owns the land. However, the Authority will gain the equivalent of those taxes by including those sums in the developer’s lease payment, Newman said.

Charles Theus, a retail site locator who is working with Freedom Real Estate on the Pinelands Center, said the sales tax dollars will go to Flowood.

Calls to Flowood Mayor Gary Rhoads were not returned.

Theus said the project is in its engineering phase and construction is expected to start later this year. “One of the stores wants to open at the end of the year,” he said in an interview Monday.

The store lineup is not fully set, Theus said. “We can say we have a major retailer as an anchor,” he added, indicating that with the construction extension in hand, Freedom can begin marketing its retail center in earnest.

More immediately, “we’re moving forward with the commitments we have,” he said, citing restaurants as well as the anchor store.

Without the sales tax rebate, it is unlikely Freedom would have continued to pursue the retail development, according to Theus. “Anyone doing a project of this magnitude and size would not go forward without the award,” he said.

Theus said his research shows the Lakeland Drive-Airport Road location has a strong traffic count and good entrances and exits on the property.

An intangible value of the site is the public perception of Flowood as a safe place to shop, Theus said.

“We want to give something enhances the city,” he said. “The streets must be laid out in a way that makes sense for public safety and must be aesthetically pleasing.”


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About Ted Carter

One comment

  1. So the taxpayers are building another retail center? And we are going to call that capitalism? Hey, I’ve got an idea. How about you Louisiana boys take your great capitalistic enterprise, build it and see if you can pay off the debt for the building the way I pay off my house: With your income. God, I can’t believe people actually complain about a single mom getting $30 a month in food stamps when we just give rich (out of state) people hundreds of millions of dollars in the name of “economic development.” Anybody see a campaign contribution in the future for some of those responsible? Or maybe a sweet little consulting contract for a completely unqualified brother-in-law?

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