County against tax breaks for Aeolian, Carr developers

Published 10:44 am Tuesday, April 1, 2014

A tax abatement for developers of the refurbished Aeolian Senior Apartments similar to one secured in December from the City of Vicksburg doesn’t appear to be in the offing on the complex’s Warren County tax bill.

The building at Cherry and Clay streets reopened in December after a two-year, $8 million makeover that now houses low-income seniors in 60 luxury-style apartments. It had been vacant for about 22 years prior to the reconstruction.

Texas-based Brownstone Inc. minimized rehab cost with housing tax credits awarded in 2011 and 2012 by the Mississippi Home Corporation geared to low- and moderate-income renters — an arrangement that county officials said makes it eligible for so-called “Section 42” property, named for the Internal Revenue Service code section on the subject. In 2005, a law passed in Mississippi that has allowed such developments to be taxed on the net income generated instead of the actual property value, which has rankled local governments in the state because it generates far less tax revenue than market-rate units.

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“There’s no way I would vote to let them have any kind of tax abatement after hearing what all I’ve heard about the Section 42 program in the past,” Board President Bill Lauderdale said Monday as supervisors met informally on the topic, among other items.

The three-story structure passed an inspection in December from the city’s Department of Community Development and developers were granted an abatement based on improvements, according to a resolution passed later that month and other documents. The abatement is for seven years and covers the former Carr Central building the Texas firm is rebuilding as low-income apartments for families.

No numbers had come available from the Tax Assessor’s Office on how much property taxes either complex would pay in county taxes for 2014, supervisors said.

The state’s two local government advocacy groups, the Mississippi Association of Supervisors and the Mississippi Municipal League, have lobbied the Legislature to change or repeal the lower rates for low-income housing. That stance isn’t one from which the Warren County board plans to move anytime soon, supervisors said Monday.

“They’re already going to be getting what the state allows them to get,” District 1 Supervisor John Arnold said. “We don’t have to agree to (another abatement).”

Lobbying efforts against the provision extended into court in 2011, when MAS sued the Department of Revenue over the application of the lower appraisals in Amite, Clarke and Calhoun counties. In August 2013, the case was dismissed for lack of action over a year’s time, according to Hinds County Chancery Court records.

Lauderdale said he opposes tax breaks on top of what the state allows on the front end based on accounts he heard from contract appraisers who work in other areas of the state.

“Wes Kight told me there was a Jim Walter home next to a Section 42 property up in Humphreys County, and the Jim Walter home was paying out more in taxes than the big development was,” he said.

In recent decades, Warren County has been more apt to approve improvement-related tax abatements for large industries. In 2013, the lone applicant was Anderson-Tully, which secured reduced property tax rates for 10 years on about $12 million in inventory and equipment added in 2012.