JACKSON, Miss. – Developers are rushing to stake a claim to Mississippi’s tourism tax development incentives, even as lawmakers must decide whether to extend the tax credits.
The Mississippi Development Agency has now awarded up to $155 million in potential subsidies for three malls since the sales tax rebate program was widened last year to include “cultural retail attractions.”
Under the terms of the law, which was expanded to cover shopping centres in 2013, the state will return 80 per cent of sales taxes collected at a development over 10 years, until the total collected reaches 30 per cent of the construction price.
If lawmakers don’t act to extend the tax credits, they will run out on July 1. House Bill 1233, sponsored by Rep. Rita Martinson, R-Madison, would extend the program by three more years. After a lawmaker questioned the bill last week, it was moved to the bottom of the House calendar. Thursday’s deadline for House consideration could pass before lawmakers get to it.
Martinson said she thinks incentives have been helpful, but said there’s some sentiment to let the lures run out.
“We might even think about letting it go,” she said. “It might be at the point to sit back and see what we’ve done.”
Many economists voice doubts about subsidizing retail development. Good Jobs First, a non-profit group that is skeptical of business subsidies, is particularly critical of giving money to retailers, saying they don’t pay well or create spinoff jobs.
“Building new retail space doesn’t grow the economy, it just moves sales and lousy jobs around,” the group writes.
The first retail development to qualify for the widened incentives was Pearl’s Outlets of Mississippi, where Spectrum Capital could get up to $24 million of its $80 million investment back. That mall opened in November.
Since then, Memphis developers have won certification for the proposed Outlet Shops of the Mid-South in Southaven, which could get $34 million of its $113 million construction cost.
Now, the third and largest development has been certified. CBL & Associates has been approved for up to $96.3 million of a projected $321 million investment for the Gulf Coast Galleria, which it hopes to build in D’Iberville.
MDA has also certified developers of a proposed Westin hotel in downtown Jackson to collect up to $15.7 million from their proposed $52.3 million investment. Hotels, museums and other tourist attractions were already eligible for the rebates before last year, but may not reach the 30 per cent ceiling. Jackson’s King Edward Hotel had only collected $1 million of up to $19.5 million by the middle of 2013.
Through mid-2013, the program had paid out only $20.8 million. Of that, almost 75 per cent went to another stage of the Pearl development including a Bass Pro Shops store and the Trustmark Park baseball stadium.
Online: House Bill 1233: http://bit.ly/1iRt595
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