City officials have approved a grant agreement with the Delta Regional Authority for work at the old Mississippi Hardware building.

The Board of Mayor and Aldermen Monday authorized Mayor George Flaggs Jr. to sign the agreement for the $545,000 grant to expand the parking lot at the building, as part of a project to convert the former garment factory and hardware building off Mulberry Street into a multi-floor innovation and tech transfer center to serve the Vicksburg area and the central Mississippi region.

In a related action, the board approved an agreement with 1622 Washington LLC, the building’s owner, to provide the grant’s 20 percent match.

The parking area faces Mulberry Street and the Vicksburg Convention Center.

“This is the parking lot which is in back of the old Mississippi Hardware building that the city owns,” city attorney Nancy Thomas said. “It’s public parking, but it will be used for that building and the Vicksburg Convention Center.”

“This is a public/private partnership,” Flaggs said.

Developers involved with the renovations of the old Mississippi Hardware building unveiled plans in August for the $19 million project.

Following the presentation, the Board of Mayor and Aldermen allocated $300,000 to the project and directed Thomas to prepare a contract establishing a partnership between the city and developer Tim Cantwell concerning the project.

Influenced by the presence of the U.S. Army Corps of Engineers and the Army’s Engineering Research and Development Center in Vicksburg, the hardware building development is expected to create a space to attract small and middle-sized businesses that could potentially work in federal-type programs.

Cantwell said funding for the project will be done using a combination of a loan, Delta Regional Authority grant funds, federal and state historic tax credits and federal and state new market tax credits, which will be converted to money by bringing in a partner that will receive a pass through of the tax credits. He projected an estimated $9.5 million in debt service covered by lease payments.

The Mississippi Hardware building has been vacant since closing in October 2013, and its future use has been a topic of speculation since, including the possibility the building would be converted into a hotel to serve the Vicksburg Convention Center, which sits on the west side of Mulberry Street across from the building.

Mississippi Hardware was known as an outlet for hard-to-find tools such as wrench sockets, drill bits and off-size nails, and the building was the store’s third location since its establishment in 1935.

Built in 1936, the building originally housed M. Fine and Sons Mfg. garment factory.

In another matter, Flaggs criticized unidentified Facebook critics who criticized the mayor, telling him he “sucked,” and claiming he has not raised firefighter pay and increased employee deductions and reduced coverage for the city’s self-funded health insurance program.

Flaggs said the claims “were as further from the truth as the east from the west.”

“We have not — emphatically not — changed any of those premiums as it relates to deductions,” he said, adding the city had a meeting that Monday afternoon for employees to explain the changes the city made.

He explained the city changed program administrators from Blue Cross to United Health Care, adding the city saved about $600,000 in administrative costs.

According to information released by the city, the change of plan administrators from Blue Cross to United Health Care, negotiations by city officials with other providers and the establishment of the city’s walk-in clinic have resulted in an estimated total savings of $607,308.

“What we did was improve what we had and we stopped paying those high administrative costs; it did not change your policy,” he said, adding while the premiums for dental insurance increased, the benefits also increased.

He said he delayed a third employee pay raise because of the increase in insurance costs, which at the time totaled more than $800,000.

“Do I suck because I take care of the employees first?” he asked.

“We’ve got the best (insurance) policy going forward. I’ve been here five years; I have never done anything adversely affecting the employees.”