Developer sets sights on old Pinewood|[3/10/06]
Published 12:00 am Friday, March 10, 2006
A trickle of proposed housing developments in Warren County stemming from the Gulf Opportunity Zone Act of 2005 is becoming a torrent and officials now face a decision whether to adopt the tax incentive-laden program as part of a revitalization plan.
Expected to be on the supervisors’ agenda at their next regular meeting on March 20, the item comes as the third developer has applied for housing tax credits to build single-family housing for low- to moderate-income wage earners.
Members of a general partnership formed by Illinois-based developer Jim Bergman, DD Development of Sterling Inc., said they plan to develop about 50 acres of land behind the former site of the Pinewood motel and restaurant property on U.S. 80.
John McChurch, a retired developer who said he was asked by Bergman to examine suitable sites for development in Mississippi, made his pitch to supervisors, who seemed receptive.
District 1 Supervisor David McDonald, in whose district the site is located, said the need for recruiting jobs to the area is reason enough to support it.
“We need to support the GO Zone if nothing else but for industry,” McDonald said.
With the property on which the development would sit being just outside city limits, District 3 Supervisor Charles Selmon alluded to the absence of property zoning in the county.
“This could be our first step toward zoning,” Selmon said.
Vicksburg has complete zoning. Warren County has only limited subdivision regulations.
District 5 Supervisor Richard George said after the meeting that the old Pinewood site was better for the type of development the group planned because it was further away from high-end subdivisions that could draw popular opposition. He did have continued reservations, however, of the presence of developers “we are not that familiar with.”
The benefit to the application’s chances of being approved, McChurch said, of having the county use the GO Zone as the face of a revitalization effort is added “points” that go toward its success.
Having a county or municipality pass such a resolution adds two points to a possible 105 that are used to score an applicant’s credentials, McChurch said.
Two previous proposed developments that have used similar financing, the Low Income Housing Tax Credit that grew out of federal tax reform laws passed in 1986, have been shot down.
One adjacent to the Fox Run subdivision off U.S. 61 South died when its developer canceled a public hearing amid complaints from residents there who feared increased traffic and crime.
Another near the Danawood subdivision appears headed for the same fate, as the landowner has asked the developer to terminate the contract to sell the property.
In his presentation to the board, McChurch said the required public hearing for the U.S. 80 development was held as advertised by signs around the property last Saturday at the Hampton Inn on Clay Street. Both Bergman and McChurch said no one showed up.
Another project planned for the acreage that appeared on the signage was for an apartment complex for seniors, resembling one called Thomas Place that Bergman is developing in Glenview, Ill. on land donated by that city. That plan was canceled, McChurch said, because of market research that showed the area was not a viable candidate for it.
McChurch spelled out the specifics of the housing and financing to the board while alerting them that the group’s application for the Low Income Housing Tax Credits that will finance the project is due the same day.
The development, to be called Thornton Hill residential subdivision, calls for 75 single–family houses sized at 1,400 square feet and each with a two-car garage. Sixty of them would be three-bedroom homes. Each would be built at a cost of $161,000 and would comply with the 2003 International Building Code standards.
The homes will be rented at rates between $350 and $500 per month, with about 40 of the houses slated to be rent-assisted with residents paying as little as $50, depending on their income. According to McChurch, that balance would come from funding sources associated with the program by Mississippi Home Corporation.
MHC received expanded funds from the federal government as a result of the GO Zone’s passage, up from $1.90 per capita to $18, making these developments more attractive to developers.
As is the case with other LIHTC developments, tenants qualify if their income is at or below 60 percent of the area median income. For the next three years, properties of this type that are put into use for the credits that are in non-metropolitan areas, the national median income is used instead of the area median income.
Warren County is on the list of counties in the state recognized as non-metropolitan by the federal government.
Tenants would be required to attend on-site homeowner education classes and earn points toward purchasing the homes if they stay in them 15 years.
Doubts about whether the tenants would actually do that were part of reservations voiced by Supervisors Carl Flanders and William Banks after the meeting.
The Gulf Opportunity Zone Act of 2005, federal legislation passed by Congress and signed by President Bush in December, was geared to spur economic development in the counties or parishes declared federal disaster areas following Hurricanes Katrina, Rita and Wilma.
In Warren County’s case, it was among the 47 counties in Mississippi included in the zone and warranted individual or public assistance.
Aside from the increased levels of funding for housing tax credits to entities in the hurricane-ravaged states such as MHC, the legislation also contains tax incentives for businesses who locate in the zone.
One reservation that county supervisors have discussed since the hurricanes is the need for Warren County to be included in the zone, as overall damage here was minimal.
The president of the partnership, Bergman, has developed multiple low-income and senior housing units, primarily in the Midwest.
Mississippi represents an “awesome opportunity” for GO Zone-related development, Bergman said late Thursday.
“It’s unique in that the number of available parcels is so high,” Bergman said.
The owner of the acreage is Gay Strong, daughter of Richard and Mary Jo Cassino Strong who operated the Pinewood motel and a restaurant on the property for 40 years until it closed in 1979.
Strong said this morning she was aware of the developers’ plans and the land is under contract.
The agent is Wayne Thornton Real Estate. The designing engineer is Carpenter Engineering of Vicksburg.