Tuesday, July 15, 2014

You can't be serious. More tax breaks for shopping centers.

Dammit, if the free market won't support more shopping centers, we'll do it.  Jeff Amy reports for the AP that the state is going to kick in mo' money for mo' shopping centers in Jackson.  He writes:

Mississippi taxpayers could help pay for two more malls that squeezed in approvals before a law allowing sales tax subsidies expired June 30.

The Mississippi Development Authority approved applications in June for $29.6 million in tax money to expand Renaissance at Colony Park in Ridgeland and $48.8 million to build Pinelands Lifestyle Center in Flowood. That brings to five the number of qualified malls.

It's unclear if either development will be built, at least at the scale required to obtain subsidies. If they are, it could push the subsidy tab across the state to $233 million for the one year the tourism-promotion law covered shopping centers with Mississippi-themed amenities.

The rapidly mounting costs of the incentive originally aimed at one mall in Pearl helps explain why lawmakers declined to extend it earlier this year. Though defenders said the subsidies increase jobs and tourism, most outside economists pan them as moving around pre-existing economic activity while generating low-paying jobs with few spinoff benefits. Critics of Mississippi's failure to fully fund its public school formula pointed to the mall subsidy with particular disdain.

Projects were automatically approved if they met certain guidelines. The state rebates 80 percent of sales taxes collected at a development for 10 years, up to 30 percent of development costs.

The law requires that developers spend at least $50 million on a retail center with at least 50 tenants and 300,000 square feet, as part of a development worth at least $100 million. To achieve the subsidy, developers also have to spend at least $1 million on Mississippi art, historical markers or audio visual equipment used to showcase the state's artists, or offer space to MDA for tourism promotion for at least 10 years.

"There is a good possibility we won't ever qualify," developer Andrew Mattiace said Monday of expansion plans at Renaissance, which opened in 2008 in a joint venture between Mattiace Properties Inc. and H.C. Bailey Cos. "The question is whether we're ever going to attempt to build something that big."

The application approved by MDA shows a $98.7 million development eligible for up to $29.6 million in sales tax rebates. Developers would add 330,000 square feet of retail space, more than doubling the existing size of the mall.... Rest of article

Supporters of the tax breaks for the Outlets of Mississippi project at least called it "destination shopping" as they tried to invent a tourism angle. No such pretense here.  This isn't expanding the pie.  Supply and demand apparently does not matter when crony capitalism is at work.  Either the market can support these projects or it can't.  If it can't support them, then the result will be a reshuffling of the same local shoppers while current businesses suffer from the resulting weaker demand.   Renaissance already received TIF assistance.  The government has no businesses paying for more shopping centers on Lakeland Drive and Highland Colony Parkway.  Period.  

39 comments:

Anonymous said...

So, can we assume Kingfish agrees with the article that there are 'few spinoff benefits' of these 'malls'? Try millions on top of millions.

Anonymous said...

So, can we assume Kingfish agrees with the article that there are 'few spinoff benefits' of these 'malls'? Try millions on top of millions.

On said...

I personally know people in Meridian and Vicksburg and Hernando who, with regularity, come to Renaissance. They're not just the same metro shoppers being reshuffled. Were it not for Renaissance, they'd be spending their money at Pecanland Mall in Monroe, and Memphis and Meridian-Laurel.

Anonymous said...

Thanks for relaying this article kingfish, it really is sickening that our state legislature neglects silly little things like education, while spending that much money on another shopping center in the suburbs. So glad to see their priorities are straight. It's morally disgusting.

And while the capital city is trying to rebuild, they are affirmatively pushing money to further suburban sprawl. It's one thing if you don't want to help Jackson, but it's another thing if you throw tax dollars (some of it collected from here) that could end up causing more loss of business.

And a new theater and shopping mall in Flowood? That town doesn't even have 10,000 people, and even when you include the people in Castlewoods and the Rez outside the city limits, there are artious doubts as to whether the existing businesses in the area could sustain the extra competition. How would that affect Dogwood and the existing theater on Airport Road?

But then again, we are dealing with the 30 hissing possums. It's not surprising this is the same group that gave us McDaniel. Now I know they hate spending tax dollars on the poor, but giving handouts to the rich is no better.

Anonymous said...

I'm sure Renaissance and the future Pinelands don't take kindly to being referred to as "shopping centers in Jackson."

Anonymous said...

Mattiace just recently settled lawsuit with City of Ridgeland for $25k after owing City hundreds of thousands of dollar for public improvements to his County Line Road, Lowe's shopping center development. Mattiace & Bailey also get tax credits for their Renaissance development already.

Kingfish said...

Stuccofied strip malls?

Anonymous said...

this is crony capitolism at work wasting millions and millions, corrupt politics at work. who supports this crap? haley barbour, phil bryant, dilbert hoseman, and every republican in office along with 98% of democrats!. the only way to have a honest political system is to get money out of politics period. and ignorant mississippians continue to be hoodwinked knowing nearly nothing about politics. ( I say this sadly as a 5th generation mississippian). think about the senate race, did you see a single debate? or see a single issue talked about like foreign policy, economics, healthcare, etc.? NOPE!. the corporate run media in ms (wjtv, wlbt, wapt, talk radio, etc.)is controlled by those in power and wants the population ignorant, just a dumbed down population working 16 hours a day for peanuts and obsessed with sports, and dancing with the stars, etc. while the state goes to hell in a handbasket.

Anonymous said...

Just sick of all these malls and grocery stores pushing local mom and pops out of business. These shopping centers, mostly owned by out of state, shoot revenue back to their out of state banks and their corporate typhoons. And
If we offer tax incentives that local businesses don't receive, mom and pops can't survive. When tax incentives expire, they will just move on to another state and start the process over. in the meantime you're left with closed businesses,empty malls, and antique stores to survive. they at least should mandate in- state developers, contractors, and subcontractors to keep money in Mississippi home grown people and not some out of state developer that rents an apartment here for 3 months to establish a residency to bid on a job here .......and how many times does that happen-- a lot! I know because I used to rent houses and you would not believe how many developers come in from out of state to do this kind of crap they take our money back home to their state.

Anonymous said...

and how many people that claim to be "investors" /developers that come to our state and do a half ass job then can't get financial backing and then we're left with half done development. of course we don't hear about that much in the news. it's all about politics and the big boys.

Anonymous said...

Large shopping center projects can be profitable, but not profitable enough to fork out all of the up front capital and risk loosing it all without a backstop from economic development entities or governments. It has long been a part of our system to encourage risk taking- much more so than in other developed countries. That is also the reason that we have generous bankruptcy laws.

As to whether or not these dollars are better suited underwriting other risky endeavors such as medical research facilities, etc. I cannot say... but to single them out as "crony capitalism" seems a bit much. We've developed institutions and other elements of our system to support projects that otherwise may not have been completed.

Anonymous said...

Title is misleading. No one is giving tax incentives for shopping malls to be built "in" Jackson.

Anonymous said...

Why did the Banana Republic close in Renaissance?

Anonymous said...

@12:33
My guess is that the Banana Republic at the outlet made the one at Renaissance a pricy redundancy. I believe the GAP at Northpark either closed or is closing for the same reason.

Anonymous said...

You're correct 11:45. The state is playing favorites and has been for the last three decades. The suburbs here largely owe their success to being being beneficiaries of government handouts, opposed to their actual merit.

I don't know what this state governed considers to be a legitimate state interest, but promoting suburban sprawl is not one. I would have thought that the devout republicans here would be urging the government to get out of this business (government built shopping malls in suburbs).

And even I would halfway understand if it were something that would bring added value to the area (like the one lake idea or the MS Crafts Center) but another shopping mall?!? As the title states, you can't be serious! How many shopping malls do you really think the metro area can sustain? While we are at it, let's build 12 more!

By the way, regarding the one in Flowood, IF the development goes through, one of two things are bound to happen (given the local population): either the new mall will fail or it will put dogwood out of business. Either way, your tax dollars (and they swear they don't have enough to build highways and find education, are squandered. How about this state actually engage in strategies that work to grow this state? And they wonder why MS is behind in jobs and economic development!

Anonymous said...

12:56. Good example of how this is not actually economic development at all.

Anonymous said...

Does the landlord or tenants receive the tax rebates?

Anonymous said...

@10:38

Corporate typhoons are nothing but stock market windbags.

Dante said...

Let's be honest about what's here. This isn't the state putting equity into something, it's giving a rebate off of sales tax. The logic of the state is that they wouldn't be getting this money anyway because sales would be happening elsewhere so why not let 80% be used to develop (and increase property taxes). 20% of something is better than 100% of nothing.

I'm no fan of this tax credit, but unless I'm missing something, that's what it is - a tax credit - not a project with state equity.

Anonymous said...

I can't believe how disrespectful some people can be. It probably cost someone a lot of time and money to come up descriptive and enticing names like
"Pinelands Lifestyle Center" and "Renaissance at Colony Park."

Many communities would be happy to have their elected officials make it rain so they could have nice things like this in their hood. You can bet that the developers would be lining up to get in on the deal faster than you can say break a lease.

Instead of attempting to understanding why and how these deals roll some here use disparaging misnomers like "malls", "shopping centers", "shopping mall" and even "strip mall."

Anonymous said...

@7:29 No one shops at the mall in Laurel. It's basically a Mexican bizarre with a Belk. Had to endure a few hours there at Christmas 12 with my parents. I was waiting in the cue to be mugged. Not safe there day or night. They have since moved as that whole town has gone to hell.

@10:36 Money can never be separated from politics. Tale as old as time.

It doesn't matter what they end up building here, you still have to fly to Dallas or Los Angeles to get a decent shirt, suit or pair of shoes made. We can't even get a Macy's to look at MS. FYI all those outlet clothes would never be sold in the actual stores. They don't meet brand quality standards. Most are irregular or produced substandard for outlet prices. You get what you pay for.

Anonymous said...

It is not an issue of whether Renaissance is a good thing to have. The issue is that taxpayers are paying someone to do something they would have done with their own money. A retail and dining development at an Interstate exit in Ridgeland is not the kind of thing that needs to be subsidized. Taxpayers built the interstate and the water and sewer system. If they can't make it in that location without a subsidy they need to get out of the mall business.

Anonymous said...

Renaissance at Colony Park received Katrina GO-Zone tax-exempt financing in the first place. That was the second stupidest use of Katrina GO-Zone bonds after the condos in Tuscaloosa.

Anonymous said...

dig deeper into the players and guvment officials involved in the outlets of MS if you want the truth. i think it only took one deer hunt to get the incentives flowing. i know it took more than one for the "resort" status bill. that was a little more tricky....and costly.

Anonymous said...

Hey 5:27, Wasn't Bill Yates on that deer hunt? Didn't that project receive a donation to the tune of almost $14mil from the tax payers?

Anonymous said...

I would like to see tax incentives go towards fixing up and renovating dilapidated strip centers, or any building that has been pretty much abandoned, and bringing it back to a nice looking fixture in municipalities rather than eye sores in the community. Makes too much sense though.

Anonymous said...

KF, you have done it again. Brought out the total ignorance of a large portion of your "broad readership". As has been said here twice already, the government is not financing these projects - it is rebating the sales tax that they create for a period of time.

Don't like the program - them condemn the Repubs for the program - ooops that doesn't work. The bill was passed, and killed after a year.

Out of state developers and owners? Mattice, Yates, Bailey?

Great idea. Put the money into the dilapidated strip centers. Let's see - like Metro Center? Can't do that - already tried it with Watkins. Now the city is moving into it since it isn't a marketable location.

So - let's condemn all of MS. Can't buy S&&t here, got to go to Dallas for anything worthwhile.

Let the market place work. Ooops, what was that Banana Republic question? Market place at work?

Seems like all that exists here is naysayers and bitchers. I've got an idea. Follow Chris McDaniel's federal program - cut out all government spending, development, incentives. Watch the Nissans and Toyotas flock into the state then. And start booking more flights to Dallas to go shopping because there won't be anything here. Just won't have any income to spend anyway.

Kingfish said...

I am quite aware of how TIF's work. However, these will probably depress demand. What are we? A bunch of Harlots who pull up our skirts every time a developer shows up with blueprints?

One of these developers was sued by Ridgeland and settled for non payment of TIF's. That one should be persona non grata for any more tax breaks, TIFs, etc.

The point is, the government is still interfering in the free market, the other businesses will be hurt by this, and its time to quit using government means to help finance or support shoppingn centers, destination, or whatever you want to call it.

Anonymous said...

" FYI all those outlet clothes would never be sold in the actual stores. They don't meet brand quality standards. Most are irregular or produced substandard for outlet prices. You get what you pay for.
July 15, 2014 at 2:45 PM"

We were in town, and decided to see if there was anything at the Saks outlet (nothing else in that center was of interest...). Would save us trips to the Saks in New Orleans, if they had a good selection and real markdowns.

Markdowns at SAKS-ON-THE-PEARL are not very deep, and I quit looking after discovering that the men's suits (the six whose jackets I tried on, anyway) were ALL wildly, bizarrely inconsistent with the sizes on the labels. Your phrase, "...produced substandard for outlet prices." makes sense of the situation.

Oh, and the music was really loud and obnoxious. Inside, the music was almost edgy/trendy/hip, if bordering on ghetto. But the base was turned up so loud, we were in pain (and felt like we were in a really bad neighborhood).

The "Mall" ('Strip Center' is the correct term. If that's a "mall", then I'm a giraffe. Building a tower with an outhouse on the top does not make a strip center into a "mall".)... anyway, the "Mall" music playing loudly outside was pretty horrific. It was Rock & Roll, but sleazy and scroungy and OLD - but not in a 'cool' kind of way - more in a cornball kind of way. We only heard part of two songs, rushing to and from the car, but if there is such a thing as Hick Acid Seventies Rock, they were prime examples - and not in any way that could be interpreted as "good". Anyway, the music definitely stopped us from even considering exploration of the "Mall" and its other offerings. It was a unanimous "Let's get out of here!"

However, we're not members of the PEARLetariat, and maybe the formula works with some shoppers.

As for the proposed, "Pinelands Lifestyle Center"... The imagery summoned by that name is of a budget-priced rehab center for semi-ambulatory folk, stuck somewhere out on somebody's cutover timber parcel. Never in a million years would a name like that inspire me to go and SHOP.

Calling Out Snoots said...

"...you still have to fly to Dallas or Los Angeles to get a decent shirt, suit or pair of shoes made."

Well, Shit. Ain't you special! 99% of us have never had a shirt, suit or pair of shoes MADE.

Anonymous said...

you old farts that shop! this young generation buys from the internet. lots of times they just go in the store to try on clothes and go back to the Internet to order it direct from the site. You bunch of fools. the shopping centers are built for the generation that's about to retire our on canes and grandmas that are buying clothes for their children and grandchildren. that's why we need to make sure that we capture all the internet sales tax.

Anonymous said...

532a... you never been to market in new york, chicago, and italy? most of the clothes are made in sweatshops and another label is slapped on them. Haha

Anonymous said...

MALL
noun
noun: mall; plural noun: malls; noun: shopping mall; plural noun: shopping malls
1.
NORTH AMERICAN
a large building or series of connected buildings containing a variety of retail stores and typically also restaurants.
synonyms: shopping center, (shopping) plaza, shopping complex, strip mall, mini-mall, galleria, megamall, marketplace

5:32a said...

No. I shop at Fresh Market.

Anonymous said...

Kingfish, et al.

I find it best to opine on things I fully understand when that opinion is read and or heard by many. Otherwise it is no longer an opinion and is just another criticism without merit.

First, this costs the state very little. Even if 100% of the sales are simply reshuffled from somewhere else, the constant progression of shopping areas promotes development.

Look to yourselves as to why the Jackson metro area does not support anything remotely entertaining. Everyone feels necessary to be a critic without understanding rather than an unbiased watcher.

The state isn't "spending" money. There are numerous examples of overspending within our government, what we have here is not subsidy of certain businesses, we have a problem that was created by government being solved by government.

Kingfish, you say free market? What's free about the startup step of a business in the modern market? Innovation and development has been smothered under the red tape, fee and taxes of government, so, please, forgive some who see your myopic viewpoint as nothing more than the typical negativity and "gotcha" attitude that permeates the metro area, suppressing any free market progress towards better retail entertainment opportunities.

Anonymous said...

I believe the term the cool kids use these days is "lifestyle center" rather than strip mall.

Anonymous said...

823a -made my point exactly!

Anonymous said...

KF, KF, KF, tsk, tsk, tsk, you know not of what you speak. You didn't do your homework. What did you do, read the Northside Sun for your facts? Check the City of Ridgeland for the amount of $$ the LOCAL developers have brought in and what was paid in excess of what was actually still owed after the site was sold. Hardly "settled". More like a gift. And dear fellow readers, I repeat LOCAL for Renaissance, Outlets, and also Highland Village was locally owned until recently, but still locally run and full of local shops. You don't understand tourism or economic development. The developments are improvements, growth, progress. They draw in people who shop, eat in restaurants, stay in hotels from surrounding towns and states who would NEVER otherwise come to Mississippi. They bring in people to experience the Craft Center, the trails, the museums... AND, they bring in new residents to LIVE here. They are amenities to recruit employees for corporations and medical professions. Do you think people want to live in a desert? THANK YOU, July 15, 10:20 "So - let's condemn all of MS. Can't buy S&&t here, got to go to Dallas for anything worthwhile." People from Alabama make destination trips to the Outlets, from Louisiana to Renaissance, etc. Wasn't long ago we had to travel to Dallas, Atlanta, Birmingham, New Orleans, Memphis and beyond. If the LOCAL developers hadn't brought these things home, you'd be sitting and complaining that nobody does anything and Mississippi doesn't have anything. Oh, but that's what you do - sit, do nothing and complain about those who DO.

Anonymous said...

CAN YOU BELIEVE DISTRICT 61 REPRESENTATIVE IS USING OUTLETS OF MISSISSIPPI & FULLY FUNDING EDUCATION IN THE SAME BREATHE? WAKE UP FOLKS!!!...WHY DO YOU THINK LOCAL NON TAX EXEMPT BUSINESSES IN PEARL ARE CLOSING THE DOORS. WHY DID PEARL HAVE A 30%- TAX INCREASE?



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