Developer seeks assistance for project
A retail developer is considering a Brookhaven site for a newstore and is seeking city and county assistance with theproject.
Chris Gouras Jr., associate consultant with Urban PlanningConsultants in Vicksburg, discussed aspects of a Tax IncrementFinancing, or TIF, plan Tuesday night during a meeting with theboard of aldermen. Gouras is working with Ergon Properties on thedevelopment that is targeted for an overall 26-acre site west ofI-55 off Brookway Boulevard.
Chandler Russ, Brookhaven-Lincoln County Chamber of Commerceexecutive vice-president, said representatives were not at libertyto identify the store in question. Despite that confidentiality,rumors have been rampant in recent weeks that Home Depot could becoming to the city.
Russ urged city officials and others to use discretion indiscussing the project.
“This is still a deal in progress,” Russ said.
Under the TIF plan, Gouras said any or all of the increase incity and county property taxes from the development could bepledged to service debt on an $825,000 bond issue to provideinfrastructure to the site. Increased city sales tax revenue couldalso be used for debt service.
Mayor Bob Massengill pointed out that the bond issue would notcost citizens any more in taxes. He said the debt service would bepaid from increased property taxes and sales tax from thedevelopment.
“We’re not raising taxes in any way at all,” Massengillsaid.
Gouras said Ergon Properties is on tight margin with thedevelopment and it will not be feasible without city and countyassistance through the TIF process.
While the infrastructure improvements would be able to serve the26-acre site, Gouras said the concept is for the company to develop11 acres for the store and the remaining 15 acres would beavailable for out parcel development. He said it is likely outparcel development would be compatible with a home improvementsstore.
The store would total 120,000 to 130,000 square feet, Gourassaid. The total investment would be around $14 million.
Gouras said the store would employ 75-100 employee and have anannual payroll of around $2 million. Retail sales are predicted tobe around $15 million in the first year and $19 million in thesecond and third years.
Current property taxes generated from the site total $5,211 forthe city, county and the school district. Estimated property taxesfrom the 11-acre developed site were forecast at around $148,000,Gouras said.
Gouras said the value of the developed site was expected to bearound $4 million in real property and $3.5 million in personalproperty. He said school taxes from the property can not be pledgedtoward bond issue debt service.
A 10-year bond issue for the $825,000 project would require$105,000 a year in projected debt service, Gouras said. Of that,$79,000 could come from property taxes and the rest from $195,000in expected sales taxes that would come to the city because of thestore.
A 15-year bond issue would require about $80,000 a year in debtservice. With $79,000 coming from property taxes, the amount neededfrom sales tax would be almost nothing, Gouras said.
Gouras said the projections would depend on how much the countyis willing to participate in the project. He said developers wereplanning to meet with supervisors Tuesday morning and meet againwith city officials Tuesday night.
Jim Defoe, with Ergon Properties, said the store could get underconstruction by the end of the year, possibly in November. Thattime schedule would have the store completed in late 2005 and goingon the tax rolls in 2006, with the first property taxes coming in2007, Gouras said.
Gouras said bond issue action would not have to be approveduntil late next year. Next Tuesday’s appearance before the boardwould be to schedule public hearings on a city redevelopment planand a proposed financing plan, which are early steps in the TIFprocess.
Project discussions got a positive reception from cityofficials. Alderman at large Les Bumgarner said the store would bea tremendous asset that could lead to bigger and better things forthe city.
“I see it as a win-win situation,” Bumgarner said.
Russ also touted potential positive results from thedevelopment.
“It’s really an opportunity for Brookhaven and Lincoln County toexpand its retail and commercial sector,” Russ said.