Hattiesburg possibly increasing TIF bonds for District at Midtown project

Hattiesburg possibly increasing TIF bonds for District at Midtown project

HATTIESBURG, MS (WDAM) - The city of Hattiesburg may be increasing the amount of money it spends on the District at Midtown to help get the project started.

Kim Bradley, president of the Hattiesburg City Council, said the city always intended to help reimburse developer Rob Tatum for the project through a Tax Increment Financing District (TIF).

However, after Tatum was not fully approved for funding through a program with the Mississippi Development Authority (MDA), he came back to the council looking to offset the cost.

"We want to revisit that," Bradley said. "He wants to ask us: could we increase the refundable amount from $6 million to $9 million? It's incentive for him to come in and do all the ground work. The roads, the sewer, the water, all of that infrastructure that becomes property of the city. He does it, and we're reimbursing him for it through the tax increment financing, the TIF bonds."

While Bradley said he would prefer the funding come from the MDA or other state resources, he said the project is too important for future development in Hattiesburg for the council to not consider other funding options to make it happen.

"I hope that we as a community are able to go back to the MDA and continue to argue the point that we feel that this meets the criteria because we need all of it," Bradley said. "We need the meeting rooms. We need the restaurants. We need the hotel. That's what makes the entire package work. I hope that it can be worked out, but should it not, this is why we're revisiting the TIF district. This right here is just so big. You're just redeveloping the midtown of Hattiesburg, and you're going to create something that's going to be beneficial to the university, to the Hattiesburg Clinic, to the hospital where all of these people are employed, where students are going to school. If we get the ability to rebuild, to revitalize that area, it's just going to mean all the world to the future of Hattiesburg."

Chad Newell, president of the Area Development Partnership, agrees the District at Midtown, which will include a 100-room boutique hotel, retail and restaurant space, will immediately benefit Hattiesburg and also spur future growth.

"Once we get this one going, we see this as a large domino, and it's really a puzzle there in the midtown area," Newell said. "This is going to be a key anchor. You'll have a game day hotel. This will be the first Indigo Hotel in the state of Mississippi. I mean, they are usually in larger metro-areas. They are in New Orleans and Nashville and Atlanta, and so it's fabulous to have the Indigo as an anchor. But then, it's really just a walkable, bikable, mixed-use development, so it really provides what we call connectivity in the midtown area and provides a sense of place and just enhances the quality of life. So it's going to be great for the entire region because it's a regional draw. So it's not just about midtown. Folks will come in from throughout our retail-trade area to shop and dine there, and certainly people will come from around the country when they come in and visit and stay in the hotel."

Newell said business incentives like TIF Districts are essential to keep Hattiesburg competitive with other areas across the country.

"The city and the county have been very aggressive in crafting incentives like this tax increment financing district that really encourages development like The District at Midtown," he said. "The city and the county have overlaid the entire midtown area with a tax increment financing district, and so that district really goes from 31st Avenue to U.S. 49 and then south to the medical complex there. Any large development that comes in would have an ability to tap these various incentives. So these are just great tools in the toolbox that help stimulate development, and without them, quite frankly, deals like this wouldn't be able to move forward. It wouldn't be economically feasible. So we're pumped. We think it's really going to propel Hattiesburg and be a good next step in the midtown area."

The council will hold a public hearing on June 20 at 4 p.m. to get input from the community about increase the TIF bonds. Bradley said if it is approved, it will be the first time the city uses sales tax to repay TIF bonds.

"We receive 17 cents of every dollar that we collect in sales tax that's rebated back to the city," Bradley said. "That 17 cents of the dollar would go back to Rob Tatum out of the hotel and the two restaurants. Had the MDA participated, it would've been 80 percent of what they collected out of those three entities would have been rebated back to him up to 15 percent of his investment, $20 million, over a 15-year period."

Newell said, "These deals are very complicated. They take a private-public partnership to pull them off, so you have to have a willing developer like Rob (Tatum) and his team. You have to have the hotel on board and the various retailers and restaurants, but then it really takes the public pulling together, making sure that the funds are there to provide the funding for various infrastructure improvements that can help stimulate the development and really help get it launched and moving forward."