GULFPORT -- Development of the Markham Hotel downtown and the old Veteran Affairs acreage on U.S. 90, where a Holiday Inn Resort is planned, is far from a done deal, even though the state Legislature over the weekend replenished historic tax credits needed for both projects.
Centennial Plaza is closer to a construction date than the Markham, closed for more than a decade and in disrepair. The Markham was supposed to be sold in March, but owner Michael Eckstein, an attorney in New Orleans, has yet to close the deal.
Eckstein could not be reached to comment. Robert Lubin, an attorney in Virginia who planned to round up foreign investors to buy the Markham, did not respond to messages requesting an update.
The bigger project, Centennial Plaza, was announced with fanfare in August 2014, but developer Stewart Juneau was unable to finalize financing without the state tax credits, which the Legislature failed to replenish in 2015.
"We have re-engaged our lenders to start finalizing the last details, update the due diligence reports and any other requirements for the construction loan, so we hope to have a construction loan closing date soon," Juneau said in an email Wednesday morning. "We are targeting October 31 for a construction start."
This session, the Legislature added $60 million in credits to the pool, but also included a new restriction: Credits are capped at $12 million per year.
Juneau was relieved the tax-credit bill passed, but is concerned about the annual cap. Projects statewide compete for the credits.
"Our current feeling is that the $12M cap should not have any substantial impact on Centennial if we are able to start construction soon, but that is still subject to confirmation by our lenders and equity partners," Juneau said.
The first phase of the Centennial Plaza project will require $4 million to $4.5 million in credits, said attorney Steve Hendrix of Jackson, who is working on the Centennial Plaza project and historic projects in other parts of the state.
Hendrix said Centennial Plaza should be in a good position for credits because developers have jumped preliminary hurdles and are cleared for construction.
Tax credits are awarded only after construction is finished.
Juneau said state and federal approval of construction plans for the Holiday Inn Resort should put Centennial Plaza near the front of the line for credits -- provided financing can be finalized and construction starts soon.
In addition to rehabbing two buildings on the VA property's western side for the Holiday Inn Resort, developers plan construction of a central building for check-in, offices and amenities. A pool with a lazy river also is planned.
In 2014, developers pegged hotel costs at $30 million, Hendrix said tax credits can be used for 25 percent of qualified costs, not total development costs.