Starkville aldermen have listened to overwhelmingly positive feedback from the business and economic development community and chose a site for future industrial development at Tuesday's board meeting.
City leaders voted 5 to 2 in favor of selecting a large, 384-acre set of properties north of the Highway 82 and Highway 389 interchange for the future industrial park. Known as the Stanley, Strange and Waldrop properties, the site was dubbed a game changer by development officials for attracting industrial development to the area. Ward 4 Alderman Jason Walker and Ward 6-Vice Mayor Roy A. Perkins voted against the site.
The vote sets in motion a notice of intent to issue bonds worth $7 million each from the city and county. County supervisors previously chose the site as Starkville's future industrial park earlier in the month. Options expire on the property in July, prompting officials to work diligently on the selection. Annual costs for the city and county would be $566,029 over a 20 year period under current cost projections.
Development officials will enter into discussions with property owners this week, according to GTR LINK CEO Joe Max Higgins. LINK officials won't appear before city and county officials until land acquisition costs have "been dealt with," Higgins said.
The site will include 13 individual lots totaling about 192 acres, 28.3 acres for a future speculative independent tenant, a 6-acre lot for a planned electrical substation and 157.3 acres for a large future expansion option.
"I am in hopes that we can establish some lots there that are easily developable quickly, so we can go ahead and start marketing," Higgins said. "It is going to be a process."
Leading up to the vote, the Greater Starkville Development Partnership and Mississippi State University put support behind the largest option. Mayor Parker Wiseman and several aldermen noted the significance of the business community unifying to support the site while including planned tax increases.
"Any time a tax increase is involved, it makes any decision a whole lot tougher," said Ward 3 Alderman David Little. "I have heard from the united business community in favor of support of option one. Those folks are the ones who pay the lion's share of the taxes in the city and they are supportive of it. It's great everyone has been so united."
The level of community support for the site was unprecedented, Wiseman said.
"I have seen a groundswell of support and optimism from business leaders that I have never seen before," Wiseman said. "I firmly believe we are in the midst of tremendous momentum as a community. You can feel it. Everyone is excited about progress and wants to move forward."
Since 2013, around $200 million in permitted economic development has entered the Starkville area, according to Starkville Community Development Director Buddy Sanders.
"I don't think there is any doubt about how [the industrial park site] can make a dramatic difference in Starkville's future," said GSDP Board Chairman Michelle Amos.
Site costs
In March, development officials estimated it would cost around $30 million to complete all needed infrastructure improvements and related costs at the site. Around $10 million from the total cost would be needed to extend natural gas infrastructure to the site. 4-County Electric previously said the group would build a 60-megawatt substation at no cost to the project to supply increased power capacity at the site.
Some specific costs include: $6.28 million in land acquisition costs, $3.33 million for road improvements, $286,000 for water upgrades, $1.5 million for an elevated water tank, $239,000 for sewer infrastructure and $250,000 for electricity improvements to accompany the prospective substation.
The budget of $18 million presented to aldermen on Tuesday did not include the natural gas extension or Native American cultural artifacts mitigation costs. Both the natural gas extension and cultural artifacts mitigation could take 18 to 24 months to complete, Higgins said during the presentation.
The lack of natural gas infrastructure is a citywide problem, not specific to the selected site. There is currently only 100 million cubic feet of natural gas infrastructure available in Starkville. Atmos Energy would commit to partially funding a natural gas line extension to the site after a tenant agreed to locate to the park, Higgins said.
The low natural gas capacity was surprising for a city the size of Starkville, he said.
The natural gas problem was deemed a community development issue and not a strict economic development issue, and could be sorted out by either city, county or private entities during the 18 to 24 month cultural artifacts mitigation process, Higgins added.
The Mississippi Public Service Commission previously said the group would stand "ready, willing and able to help with electric and natural gas issues" for the planned site.
Cultural mitigation costs could reach $2 million, but would be offset by the property owners lowering land acquisition costs $2 million Higgins said. Verbal commitments from the property owners were given to LINK officials previously before presenting to aldermen.
"We would have that commitment in hand for a reduced cost and we would buy this land and issue the bonds to do the work," Higgins said.
If the mitigation costs were less than the budgeted $2 million, the property owners would be reimbursed, he added.
Tax increases
The site—if completed—will include increases in the millage tax rate for the city and county. The rate could increase 2.6-mills for the city and 1.75-mills for the county. One mill is valued at around $220,000. Starkville's millage rate is currently set at 21.98.
Aldermen previously approved a 1-mill increase for the renovations to the Starkville Police Department after a state appropriations request failed. The increase will secure the needed $2.4 million for the project.
The rate won't change until voted on in the fall when the city sets the new millage rate heading into the next fiscal year.
In the GSDP memo issued to chamber members, LINK officials estimated a combined city-county tax increase could cost a Starkville homeowner an additional $44 in annual taxes per $100,000 worth of assessed property.
A county homeowner would pay an additional $18 in annual taxes per $100,000 worth of assessed property. Starkville residents pay both city and county millage taxes.
The city has $22 million in bond capacity, with the county having $30 million in bond capacity, the memo states.
Wiseman noted the LINK projections were slightly high.
"I think the LINK's numbers are beyond conservative," Wiseman said. "A 5.25 percent interest rate—unless something changes dramatically in the bond market—you are going to have an interest rate much lower than that."
In the last two years, the majority of bonds issued by the board carried an interest rate of 3 and 4 percent.