Ellington

Read the resolution (PDF, 344 KB)

Jackson City Council members will vote on a resolution at tomorrow's 10 a.m. city council meeting that outlines a financial agreement with the developers of a $200 million convention center hotel and multi-use development along four blocks of Pascagoula Street. The resolution, however, is only a preliminary outline of a financial agreement between the developers, TCI-MS and the city. The agreement calls for the city to issue an unspecified amount of bonds and ultimately be responsible for 50 percent of the debt service if the developers are unable to pay.

The agreement calls for developers to create a reserve fund starting at $3 to $6 million when the deal closes and increasing to $17.5 million over the course of 30 years, to cover contingencies.

During the city council's work session this afternoon, Mark Small, president of MJS Realty in Dallas and creator of TCI-MS, touted the expected economic impact the development would have for the city. He said the development, named The Capital City Center, would bring the city an estimated $26 million in tax revenue over 30 years and provide 164 permanent jobs.

Jackson Mayor Harvey Johnson Jr. pushed for council members to approve the resolution. He said that without the city's financial backing, TCI-MS would have to pay 9 percent interest on the bonds to finance the project. With the city's help, however, the developers would only have to pay 6 percent interest.

Follow jacksonfreepress.com for updates on this story or sign up for the JFP Daily at jfpdaily.com. Read more about the development and its convoluted history in this earlier story.

Previous Comments

ID

158387

Comment

What direct benefit does the city get from this? It seems that if we are lending our financial weight, we ought to get some direct financial benefit. Future taxes and 'economic growth' are indirect. If we knock their interest rate down 300 basis points, why can't we ask for a few to keep. If we kept say, 50 basis points of the interest, then they still get a better rate on the bonds/loan and the city gets a little money for taking the risk, as well as a bit to cover administrative expenses. Otherwise, we are taking on all the risk with no assured benefit (even those indirect benefits are off in the future). At least get them to pay for a credit default swap on the bonds...

Author

jrt

Date

2010-06-28T20:23:18-06:00