By TED CARTER
A mix of private-sector money, federal new market tax credits, historic preservation tax credits and a hefty contribution from the State of Mississippi make up the bulk of funding for the $22 million technology and innovation center scheduled to open next year in Vicksburg’s former Mississippi Hardware building.
The $22 million represents $12 million in a combination of new market tax credits, historic tax credits and other private funds, as well as $5 million in state economic development money. The remainder is expected to come from federal and regional grants, according to Dr. Jeffrey Holland, president of the Warren County Board of Supervisors and a leader in the effort to create the Thad Cochran Center for Technology and Innovation.
An annual contribution of $300,000 from the City of Vicksburg is designated for operating costs.
“The $22 million is for a complete rehab and restoration of the building, counting the parking lot and equipment in the building,” said Holland, who also retired as director of the U.S Army Engineer Research and Development Center, or ERDC.
Tax credits are expected to cover “well over 50 percent” of the total cost, he said.
Holland conceived the Cochran Center as a way to transfer innovations developed at the ERDC and Vicksburg’s Army Corps of Engineers regional headquarters to commercial use. He further sees the Cochran Center as a way to prepare Mississippi businesses of small and medium size for doing contract work with ERDC and the Corps of Engineers.
Holland said he and his partners got a hugely positive response when they pitched state government economic development leaders. “The state found that investing in this concept was a very attractive one for workforce development and for future opportunities for growing the economy of the state,” he said.
The state contribution is from $2.5 million in BP oil-spill recovery money and an equal amount forthcoming from state bond bill money,
“We’re expecting another $5 million” in state contributions, Holland added.
The 10-year commitment of $300,000 yearly from Vicksburg to help cover operations showed city leaders had sufficient faith in the project to invest heavily in it, Holland said.
“That was a critical cog in this thing,” Holland said. “I can’t envision the State being as supportive as it has been if the City had not jumped in. It showed the locals were serious about investing.”
Vicksburg expects repayment of its contributions to come from tenant lease payments over the 10 years.
Holland said he envisions the Cochran Center to be financially independent after its first 10 years.
As developer and owner of the 60,000 square-foot Mississippi Hardware building, Tim Cantwell and his 1622 Washington Street LLC are taking on the job of securing the federal and state historic preservation tax credits and the federal new tax market credits, both of which he has had experience with in converting historic properties around the country to residential and commercial uses.
Cantwell’s plan is to turn ownership of the four-floor building over to the Warren/Vicksburg Economic Development Foundation.
“In real round numbers,” Cantwell said, “you’ve got 25 percent of this as historic tax credits, 25 percent new market credits, 25 percent State of Mississippi” and the remainder from miscellaneous sources that include grants from public-private entities such as the Delta Regional Authority. The historic and new market credits present the private sector contributions, he said.
New market tax credits come from the Treasury Department and are administered through nationwide Community Development Entities created specifically to handle credit allocations. The credits, which developers sell to investors for around 75 cents on the dollar, create private investment in low-income localities across the nation. Individual and corporate investors buy the tax credits and apply them toward their federal income taxes.
With federal historic tax credits, property owners who do substantial fixups on their historic buildings can defray 20 percent of their costs through the preservation credits. Mississippi’s preservation credits can be combined with federal credits and allow for owners of historic properties to offset an additional 25 percent of rehab costs.
Meanwhile, countering the cvoid-19 pandemic has diverted both the Mississippi Legislature and Congress from routine work and could cause “some slippage in funds arrival,” Holland said in mid April.
“On the flip side, the need to stimulate the economy will likely result in increases to new market tax credit funding, which might actually accelerate the project’s vitality,” he added.
At worst, Holland said, the project may have to extend some timelines. “This is my best crystal ball at present,” he noted.
Developer Cantwell said the government has not yet set the amount of new market credits that will be distributed this year nor which CDEs will get them. But, he added, “I think we are very bullish” on securing the newly allocated credits in sufficient amounts.
Mayor George Flaggs said Monday he expects the City will maintain its $300,000 annual funding pledge, though he can’t determine specifics until city officials get a better fix on lost sales tax collections and other revenue losses caused by the pandemic.
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