Tuesday morning city leaders held a special meeting to hear a presentation about the possibility of entering into a Tax Increment Financial Plan in regards to the construction of a road that would support development of a proposed grocery store off of U.S. 11. The agenda also called for the council to consider setting a date to hold a public hearing to approve or adopt the TIF Plan.
During the meeting, Laurence Leyens of Urban Development Toolbox, spoke to members of the Picayune City Council concerning the establishment of a TIF Plan to help in the construction of a road from Highland Parkway to U.S. 11 N. where the driveway of Dr. Haidar’s office meets the highway. The work would be in preparation for the proposed construction of a Walmart Neighborhood Market. The corporation would be less willing to construct the store if the road is not built, Leyens said during the meeting.
A TIF works by reimbursing a contractor for the construction of infrastructure that could attract a major business, Leyens said.
The property in question is owned by Andy Cooper, who plans to build the 61 acres of land into a walkable community with residential and commercial developments.
Of that land, Cooper is willing to let Walmart build their $11 million 32,000 square foot building on about seven of those acres. It was not mentioned if the land would be sold to Walmart or not.
If built, that facility would be capable of employing between 75 to 95 full and part time employees. It was not said what percentage of those employees would be full time.
Leyens estimates it will cost $2 million or more to build the road.
Currently the land is bringing in about $4,000 per year in ad valorem taxes. Leyens said if the road and store were built the land value would increase, subsequently increasing ad valorem revenue to $271,907, which would be split between the city and the county.
Leyens pointed out that since the county would have to submit their approval, the entire project will only be set in stone after the city and county sign off on the project, a public hearing is held to discuss the TIF Plan bond and the road project is completed to the city’s specifications, amongst other requirements.
If the plan is implemented, Cooper would pay out of pocket to have the road and other infrastructure installed and then turn in receipts for qualifying expenses outlined in the TIF Plan. The city would then take out a bond, if the infrastructure meets the city’s specifications, and reimburse Cooper for 50 to as much as 80 percent of his actual expense. The city would then use the extra sales and ad valorem taxes generated by the new business to pay off the TIF bond within 15 years, Leyens said.
Another requirement set forth by Walmart to conduct the project is the installation of another traffic signal at the intersection of the new road and U.S. 11, Leyens said.
After the presentation Councilor Wayne Gouguet asked Leyens how the council would substantiate assisting Cooper in this development when so many others, including Cooper, have paid 100 percent of the costs associated with building infrastructure for past developments.
“It’s almost like you’re giving this developer a leg up over all others,” Gouguet said.
Leyens said that this program is open to anyone with a substantial development project, so he suggested they call him with their idea to see if a TIF Plan would work.
In light of the fact that most if not all of the additional tax revenue would be used to repay the bond over more than a decade, Councilor Tammy Valente asked how the city is supposed to be able to take on the additional infrastructure when the city’s public works department is already stretched thin.
Leyens said the boost in property values would provide a boost in tax revenue in the long run. Additionally any future developments that typically occur near a Walmart would eventually provide the city with additional revenue to possibly hire more staff.
This is not the first time a TIF Plan has been used in the construction of a commercial business in Picayune. The current Walmart and Home Depot locations also utilized a TIF Plan, Gouguet said.
Since the council did not feel comfortable moving forward with setting a public hearing date during Tuesday’s meeting, the matter was tabled until their recessed meeting, set for June 16, at 5 p.m.