Let store pay its own way, competitors say
Published 12:00 am Thursday, June 27, 2002
Karen Williams, left, and Vivian Faulk of Faulk’s Farm and Garden on Clay Street both feel Home Depot shouldn’t get incentives to put a store in Vicksburg.(The Vicksburg Post/Jon Giffin)
[06/27/02]Owners of businesses that would compete with a Home Depot say the store is welcome in Vicksburg but should pay its own way to get here and become established.
“If they want to come to Vicksburg, then let them ride the bus, but let them buy their own ticket,” said J.B. Haden of Haden Hardware.
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Haden founded his family-owned business in 1958. Today, the store that was once located downtown has two locations, one on South Frontage Road and another on Clay Street.
Separating the Hadens’ success from plans to develop a site adjacent to Halls Ferry Park for Home Depot, he said, is that Haden had no help from the city.
“I think every company has a right to come and do business in Vicksburg, but I don’t think we should have to pay for it,” Haden said.
City officials have scheduled a public hearing for 10 a.m. Friday at City Hall Annex to get feedback on the request of Ergon Properties for up to $900,000 in tax increment financing for the development.
Plans call for a $17.7 million investment from the Jackson based company to prepare the 25-acre site off South Frontage Road for Home Depot.
Mayor Laurence Leyens has asked the public for input regarding the request, but is enthusiastic about the plan to develop commercial land that is now idle. Part of the reason, he says, is that it will keep Vicksburg shoppers in Vicksburg. The nearest Home Depot is in west Jackson, about 40 minutes away.
“It’s our board’s responsibility to look at the overall economic impact to the community and the numbers we’ve been shown have been very compelling,” Leyens said.
But Karen Williams of Faulk’s Farm and Garden, 1118 Clay St., says the $515,000 in total taxes to the city expected to be generated by Home Depot are a “swap,” meaning they are already being paid by local merchants.
“It’s not that we mind Home Depot or don’t want one, but they need to invest the money here to get started just like everyone else,” Williams said.
Her mother, Vivian Faulk, said that they don’t expect to be put out of business after 51 years, but that she resents the way City Hall has been pushing for the project.
“We don’t mind the competition, but we don’t think the city should be cheerleading for them,” Faulk said.
The tax increment financing, or TIF, has been widely used in Vicksburg and Warren County for the past 15 or so years on projects ranging from Pemberton Square mall to the new Wal-Mart SuperCenter.
A TIF package pledges a portion of taxes to be generated by improvements to repay the cost of public site improvements such as access roads, traffic signals and water and sewer connections. There is no outlay of general fund dollars and no risk of general fund dollars.
Tax increment financing has also been used for Cracker Barrel, Vicksburg Factory Outlets and. most recently, River Region Medical Center, but not every business that is granted TIF lasts.
Exide Technologies on the Vicksburg Harbor and Kmart had used tax increment financing for development, but both closed this year.
Also common in Vicksburg and Warren County are tax abatement programs that exempt factories from property taxes on their buildings and equipment in exchange for providing jobs. Entergy, International Paper, LeTourneau and Simpson Dura-Vent have applied for and been granted tax abatements worth millions of dollars over several years. The amount of the exemption changes each year as equipment depreciates in value, but the most recent tax abatement was granted by Warren County to Anderson-Tully on a $27 million improvement to the facility on North Washington Street.
In 2000, Bunge Corporation was granted a tax abatement by the city and county for $4.3 million in facility improvements, but shut down six months later.
Tax abatements or TIFs can be granted by either the city, county or both, but do not affect state or school taxes. So far, county officials have said they are not in favor of granting the TIF request from Ergon for the Home Depot development despite pleas from the city.
“Our board has been very disappointed in the lack of support from the county supervisors,” Leyens said.
The TIF request is estimated to reduce city property tax revenue from the Ergon/Home Depot development by about $75,000 to $100,000 over the next 10 years as the $900,000, plus interest, is repaid. Leyens has said that since consultants say the total income from the project will be $515,000 in real property, personal property and sales taxes, the deal is a good one.
Today, taxes on the tract, which includes the abandoned Halls Ferry Elementary School, are about $2,000 each year.
The project with Ergon is expected to create about 275 jobs. Phase I calls for the development of a 250,000-square-foot home improvement store. Phase II will include out parcels and a 50,000-square-foot shopping center on the site of the Halls Ferry site.