Will Gulf Coast Galleria ever happen as COVID-19 spreads and retail stores close?
This could be the last chance to get Gulf Coast Galleria built in D’Iberville, and given the retail climate even before the coronavirus shutdown, it will be a challenge.
Last week, the D’Iberville City Council tabled an application for a PID, or Public Improvement District, for a second time. The mayor and council continue to review the proposal, which is a tool for the developer to get additional financing for the project.
With up to 25,000 stores closing across the country this year, about half of them at malls, Bob Mandal continues to work on his dream as he’s done for more than six years. His plan is to get the shopping complex built on the southwest corner of I-10 and I-110. His firm, Ramco Development, spent $1.5 million clearing the wooded property, Mandal said, and was within a few months of construction when the coronavirus hit.
What started as a $320 million mall and 2,500 new jobs in 2013, when the state Legislature approved a $96 million retail cultural tax incentive for Popp’s Ferry Road LLC, has changed in size, scope and investors several times.
So can the shopping complex still be built?
“The answer is yes, but it’s not going to be the large development we once asked for,” said Mayor Rusty Quave.
Instead of the $320 million development, it’s now $200 million, Quave said. The 130-acre project is now 70 acres. The idea of an indoor mall was swapped years ago for an outdoor shopping center with restaurants and entertainment venues to go with the retail, he said.
Council considers special district
Two weeks ago, the D’Iberville mayor and council held a public hearing on the PID and then tabled the proposal. They tabled it again on Tuesday until the July 7 meeting.
City Manager Clay Jones said the PID is “one small part of the overall incentive package” for the Galleria.
City attorney W. Fred Hornsby III described the operation of a PID district as a city within a city, with a board to oversee the district and each tenant assessed a surcharge. The fee paid by the tenants would repay the bond that’s used to build the project and maintain the Galleria.
A small surcharge also could be added to customer purchases, but it has to be reasonable like 1% or people will not want to shop there, said Christiana Sugg, counsel for Gouras & Associates consulting firm.
Renaissance at Colony Park, a shopping, dining and entertainment complex in Ridgeland, near Jackson, uses a PID. According to the website, the money generated provides courtesy patrols, upgraded lighting, jogging paths, sidewalks and water features.
D’Iberville has successfully used tax increment financing, or TIF bonds, to pledge sales tax revenue from a project to help finance infrastructure for The Promenade and shopping complexes on Sangani Boulevard.
Sales tax takes a hit from coronavirus
The city sees strong sales tax revenue from its stores, restaurants and casino, but took an $82,000 loss to its sales tax payment in April and $84,000 in May, when many of the stores and Scarlet Pearl Casino were locked during the coronavirus shutdown.
The COVID-19 pandemic has also changed plans for Gulf Coast Galleria once again.
Sugg said at the May 19 hearing for the PID that a copy of the development plan is supposed to be provided to the city as part of the PID.
“Since the COVID crisis hit, retail has kind of put the brakes on any new deal, and we’re revamping the current plan,” she said.
‘Mississippi shouldn’t subsidize shopping’
Sugg told the D’Iberville Council that Gulf Coast Galleria has a deadline from Mississippi Development Authority to begin construction by 2022.
Although the state Legislature ended the program of giving incentives to shopping centers in 2014, MDA approved extensions on the cultural retail incentive in 2015, 2016 and 2018. The Galleria is the only project still active.
This year, Senate Bill 2847 passed with an amendment from Sen. David Blount, D-Jackson, that says there will be no more extensions on cultural tourism tax incentives beyond what’s already been approved. The House has yet to vote on the bill.
Blount has opposed incentives for cultural retail projects from the beginning.
“The reason is the taxpayers of the state of Mississippi shouldn’t subsidize shopping centers,” he said.
Not the first time PID proposed in D’Iberville
The PID requested in D’Iberville by Lakeview Commercial Properties LLC of Franklin, Tennessee, is a new idea for South Mississippi but it’s not the first time a developer asked for a PID in D’Iberville.
“It is very similar to what we proposed, and we couldn’t get any traction,” said Monte Luffey with Southeast Commercial Real Estate. His company represents Lakeview Commercial Properties at One Promenade, a development immediately west of The Promenade shopping complex in D’Iberville and north across I-10 from the Gulf Coast Galleria site. Mugshots restaurant was the first business on the site and a Zaxby’s is under construction.
Luffey said they proposed a PID for One Promenade to city officials a few years ago and were informed their proposal was in the hands of consultants, who advised the city not to do the deal.
Perlis Realty and Investments, a family-run real estate development, management and leasing company based in Georgia, wanted to open stores at One Promenade at the end of 2019, Luffey said.
“These stores would already be open and paying taxes,” he said.
Now many of the same tenants that were planning to open at One Promenade are reportedly moving their plans to the Galleria.
Capturing revenue from Mobile, New Orleans
Mandal said a PID always was envisioned for Gulf Coast Galleria. “That’s been in the plan since Day 1,” he said.
Mandal said he wants to build the Galleria for D’Iberville and South Mississippi.
“It’s all about our people, giving them better choices,” he said.
The city and state lose millions each year in tax revenue because Coast residents go to Mobile and the New Orleans area to shop, he said. The car dealerships Mandal has built adjacent to the Galleria site capture more than $100 million of that leak each year, he said, and the shopping center will keep more business local.
Quave said he and the council don’t want to take business away from what the city already has, and they want new shopping, dining and entertainment options from the developers.
The mayor acknowledged One Promenade came to the city with a similar idea, and said, “We’re going to approve a PID for it.”
The longest-serving mayor in South Mississippi, Quave said he always is looking for new opportunities for D’Iberville. Now he’s eyeing a share of the $2.2 billion in BP oil spill settlement money coming to Mississippi over the next several years and how D’Iberville can best develop the land along Mississippi 15.
“We’re going to see growth we’ve never seen before,” he said.
