Monday, February 11, 2013

Lease or purchase? We report, you decide.

Update: Here is the RFP issued by DFA for the new site.

One item overlooked in the debate over where to move the Department of Revenue is taxes. It's really quite simple. If the state leases the property, the landlord pays taxes to various local governments. If the state purchases the property, the state is exempt from paying taxes.

Senator Blount sponsored a bill to purchase the Landmark Building as a future site for the Department of Revenue. The owner of the Landmark pays $750,000 per year in property taxes to Hinds County, Jackson, and the Jackson Public School District.


However, Hinds County Tax Assessor Charles Stokes told JJ this afternoon the county will reassess this property this year as it has no tenants and similar buildings adjacent to the property are not exactly enjoying low vacancy rates. Thus the property tax bill will decline next year although Mr. Stokes declined to speculate on how much the decrease will be.

Speaker of the House Philip Gunn sponsored HB# 1337. It gives the state the authority to purchase the old WorldCom building (now called Southpoint Center). The bill states:

"SECTION 1. (1) The Mississippi Department of Finance and Administration, acting on behalf of the Department of Revenue, is authorized to acquire certain real property and the improvements thereon in the method as determined in the best interest of the State of Mississippi, located in the corporate limits of the City of Clinton, Hinds County, Mississippi, for the use and benefit of the Department of Revenue, which such property is more particularly described as follows..."

The bill does not give the state any authority to lease the property.

The total property tax bill for 2013 is $375,500.  However, the owner pays $167,315 to the Clinton Public School District, $104,646 to Clinton, and $103,538 to Hinds County.  The bill also does not specify the purchase price or a limit on what it shall be, while Blount's bill mandates the price shall be the average of two appraisals.  His bill states:

"No property purchased under the provisions of this section may be purchased for more than the average value of the two (2) appraisals on such property."

There are no bills mandating the state purchase the Ergon site on Highland Colony Parkway.  The RFP for the state considers only leases, not purchases.  Stay tuned. This is going to get more interesting.

62 comments:

Anonymous said...

The least cost path is Southpointe. Cap Towers (11% occupancy) hasn't "cratered".

Anonymous said...

If the landlord has to pay ad valorem taxes, he is going to pass this expense to the tenant, DOR.

Anonymous said...

What you keep overlooking is the fact that all the women working for the tax department will insist on nearby shopping opportunities, proximity of eateries and ease of egress from the area in the evening. And since Harvey does not run this 'employment office', he has zero interest.

Anonymous said...

4:51, check how much of that occupancy has been paid for by the State of MS. First Katrina space. then contractors for the state.

Not necessarily 'against' Southpointe, but that doesn't cover the error of your comment.

Anonymous said...

WTF are you saying 4:51? Make sense if you are going to comment. Sheesh.

Anonymous said...

Sen. Blount's bill won't get to the floor of the House. Bank on it. DOA.

Anonymous said...

5:27. Representative Gunn's bill won't get to the floor of the Senate. Bank on it. DOA.

Anonymous said...

Do the people of Clinton realize that Gunn selling that building to the state is gonna eat their asses up in lost taxes?

Anonymous said...

LMC is already "done" 5:53. Reappraisal will eat it alive = empty.

Anonymous said...

Great point 5:53. In my real estate world, when I am in a "lose-lose" situation, and am gonna lose my shirt if i close the deal, guess what? They can not match the Landmark deal w/o losing by winning. Shaking my head violently here.

Anonymous said...

Yo Breck!!! Circumstances have changed? Like the 1 mm commissions you and Ted will receive if DOR goes to Clinton? Or the fact that the Landmark Center is about half the sales price it was last year when Haley Barbour and C and W selected it? And Lordy wasn't you boss TED chair of DJP last year. What is up with that?

Anonymous said...

Who is Breck? Who is TED?

Anonymous said...

5:27. Representative Gunn's bill won't get to the floor of the Senate. Bank on it. DOA.

Good news, really. Mississippi can buy LMC for $3.7 million next year.

Anonymous said...

TD has KILLED compared to BA.

Anonymous said...

TD has a bunch of listings and some over leveraged property. Careful who you put on a pedestal.

Anonymous said...

When did Blount become the fiscal voice of reason? He is making the House Republicans look bad.

Anonymous said...

Remember when the "Talk Show Host" spent weeks on end hammering Buster on the radio because he dared to make a buck?

THE CAT IS OUT OF THE BAG

Anonymous said...

6:38, Blount didn't.

Anonymous said...

You haters are getting your asses kicked over here.

Anonymous said...

Really 6:31 PM? WE, all of US, should be concerned about a stakeholder and risktaker versus an employee?

Anonymous said...

Nothing like NE JXN inherited success. LMAO.

Anonymous said...

You haters are getting your asses kicked over here.

Thanks for exposing your intelligence. Really. Thanks.

Anonymous said...

7:31. Still getting your home bound non-employed ass kicked BTW.

Anonymous said...

WHERE (again) is the GD TEA PARTY? Kim Wade99 you talk all this shit. BACK IT UP! Is you silence b/c
This is a as you say "negro" problem? STEP the eff up or go away!

Anonymous said...

Big, BIG diff between Entrepreneur and employee.

Sorry, hot sandwiches don't count.

Want to take this labor dispute public Mr. Employee?

Anonymous said...

What is the situation with the Highland Colony property KF. is it leased or sold as well?

Anonymous said...

Sure go for it.

Kingfish said...

Lease only. There is no bill to purchase the site.

Anonymous said...

Yo Breck! Talk about that 1 mm in commissions yada yada yada.....think SP....NOT WHO YOU THINK THIS IS...Too funny!

Anonymous said...

Well if it wins we KNOW there is home cooking.

Kingfish said...

You have the Lamptons/Ergon behind one proposal, Mr. Speed/DJP and that crew behind one, and Duckworth, the Speakah, and some others behind Worldcomm.

There is going to be homecooking no matter what. Its quit interesting to watch actually.

Anonymous said...

Breck who dang it? Who is this Breck guy?

Anonymous said...

DUCKWORTH??? Doesn't he be a BIG DOG downtown? I am a simple Hinds County Raymond guy. Is he not a downtown type guy?

Anonymous said...

KF I think it sucks. Sorry.

Anonymous said...

Breck Hines of Duckworth Realty.

Anonymous said...

Duckworth is not a BIG DOG anywhere. You see his signs because he has lease listings, not ownership.....as he would allow you to believe.

Anonymous said...

KF are you sure the option to lease is not on the table re: Southpark? I read a story in the CL that referred to either, I thought, a few days ago. Are you sure?

Anonymous said...

One thing KF does not seem to recognize is that the legislature can actually do anything it wants to. Everything flows. Everything changes or can change. Sell language can be changed to lease language with a simple amendment.

As slick as Duckworth is and as sharp as his lobbiest Clifford Thompson is, don't think for a minute that they can't pull a rabbit out of a hat. Ergon has also gotten one of the most powerful, respected (feared) lobby group in the state in Capitol Resources.

Hired guns for a business decision. Doesn't pass the smell test.

Anonymous said...

KF, it doesn't take a bill in the legislature to purchase - any of these or other properties - as long as it is done while legislature is not in session. So Ergon DTI could be purchased as well as could Landmark, Southpoint, or the existing building without any of this legislation. All this is power plays, and moves by the lobbyists, just as many of these comments are probably being made by the lobbyists.

Anonymous said...

So, 5:32, a person shouldn't put signs up when they have property available for lease?

Anonymous said...

Well, there are not one , but two studies now that select Landmark as the best choice and neither look at how occupancy would boost the business of existing restaurants and shops and attract more businesses to fill the needs of the influx of people.

But, of course, whoever can buy the most legislators wins. God forbid any of them should do what is best for the State rather than what is best for themselves.

And, for certain, too many people are so twisted they want to see the city administration fail so badly that it's ok with them for our beautiful Capitol city to pay the price.

I think that is known as " cutting off your nose to spite your face".

Kingfish said...

You mean they can actually change bills after they are introduced? Damn, wish I had known that before I had written this post. Enlighten me some more on this legislative process as I don't know much about it. Thanks.

Anonymous said...

City of Clinton has called a press conference for 10:30 today to showboat the Southpark building. Mayor/aldermaen yada yada. This is not about Clinton, Ridgeland or downtown. It is about what is BEST for the taxpayers on MS.

Anonymous said...

Not about downtown? ROFLMAO Take your act on the road. You are FUNNY.

Anonymous said...

What is 10:04 talking about? 9:53 makes sense to me????

Anonymous said...

http://www.msnewsnow.com/story/21138557/city-leaders-want-to-dept-or-revenue-to-stay-in-town

"I think the discussion of a cost is simply a red herring because those who advocate moving it somewhere else are certainly going to have to pay a higher cost as well," said Gunn.

Classic...Let's not get bogged down in the economics and try to make informed decisions.

Kingfish said...

True. One thing left out is we have come a long way from spending $50 million plus $22 million in interest costs on a new building.

Regardless of which site is chosen, we are coming out way ahead since we didn't listen to Ed Morgan and Dean Kirby.

Anonymous said...

You certainly can't say that the downtown cult has EVER gotten bogged down in economics or informed opinions.

meople said...

Ssssshhhhhhh the lobbyist are listening...

Anonymous said...

After 100+ posts on real estate and state government offices one would think land-lording to be the principal occupation around here. Problem is the only office renters are temp agencies and the state.

Shadowfax said...

What the hell are you talking about 10:52. I rent one and am neither. If you think everyone 'owns' their office, you're nuts.

Kingfish said...

That is true about Baton Rouge but since I know something about the area, allow me to point out something. It would be a nightmare to spread the buildings out over several parishes as is done here thanks to the traffic. I-10 from downtown to Ascension at 2:00 or worse, I-12 from downtown to Livingston Parish, ugh. Nightmare. You also don't want to put them on the other side of the river. Every time that bridge is shut down, its another nightmare. Business leaders of BR studies Austin over ten years ago and made a commitment to adopt some of the concepts that worked for Austin. Creating a downtown district was one of them. Of course, there are two things that helped. One is the building of the Shaw Center. That helped a great deal. The other one is you have LSU next to downtown. Yes, we have 30,000 or more college students in the Jackson area but if we had them at one university, think of the impact. People actually want to live around LSU. Thus the downtown concept has something Mr. Speed and others promote: housetops. Housetops bring business even if the housetops are condos. However, I daresay, there is not a bunch of nice homes between JSU and downtown.

Anonymous said...

The topic has strayed from consolidating gov't offices (so they can function better) to forming a 'downtown business complex'. I have an idea: List the names of any two state government department heads who favor moving everybody together in central jackson. The ones who are located downtown are itching to get out and the ones who are not downtown would not go back for anything.

Anonymous said...

You mean one size doesn't fit all Kingfish? Say it ain't so.

Anonymous said...

6:44. Ed Morgan and Delbert Hosemann.

Anonymous said...

Phil Bryant and Tate Reeves.

Shadowfax said...

I should have said 'appointed'. Elected officials don't fall into what we're talking about here, which is agency heads.

Anonymous said...

No agency heads, agency officials, state officials (other than a few with a control-complex) or department heads favor consolidation or moving all employees into Jackson. Only those leasing space, renting apartments, running restaurants and denying crime are in favor.

Anonymous said...

5:50 do you ever chill? Ever?

Anonymous said...

Who cares what agency heads want? They want big offices and accommodations. How about the tax payer SF?

Anonymous said...

Obviously, from reading through these posts, 'the taxpayer' has no clue how these agencies work independent of each other with no need to be centralized. If you think otherwise, please post a brief list of things that run better when agencies are co-located. (don't count lunch)

Rootin' for Pelahatchie, Clinton, Madison, Brandon, Flora, Gluckstadt.

Anonymous said...

6:22 do YOU ever chill? Ever?

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