Pearl Mall: Symbol of Misplaced Priorities? | Jackson Free Press | Jackson, MS

Pearl Mall: Symbol of Misplaced Priorities?

The opening of the Outlets of Mississippi comes on the heels of Governor Phil Bryant's budget recommendation for the 2015 fiscal year.

The opening of the Outlets of Mississippi comes on the heels of Governor Phil Bryant's budget recommendation for the 2015 fiscal year. Photo by Trip Burns

One day after Gov. Phil Bryant released his $6.1 billion state budget—which he brags reflect priorities of "spending prudently, saving for the future and prioritizing the core functions of government"—Bryant helped cut the ribbon on a retail development built in part with state taxpayer money.

The Outlets of Mississippi, a retail shopping center located near Interstate 20 in Pearl, opened this morning with a ribbon-cutting ceremony that Bryant and other officials attended.

In the past legislative session, lawmakers gave $24 million in tax credits to the developers of 325,000-square-foot shopping center. The development was stalled until Mississippi taxpayers bailed out Spectrum Capital, the Yates Cos. affiliate that built the $175 million development along Interstate 20 that includes the mall, the Mississippi Braves' Trustmark Park, a Bass Pro Shops store, hotels and restaurants.

The state will give Spectrum 80 percent of sales taxes collected at the mall, up to $24 million, or 30 percent of the construction price. Spectrum President Jason Voyles told the Associated Press that developers project 20 percent of shoppers will come from outside Mississippi, and the mall would create 1,600 jobs. He points to the Mississippi theme woven through the mall, including a soundtrack of state musicians, a visitor center including crafts for sale, and a giant stone map of the state blues trail and country music trail.

"We're not aware of another project that truly combines the tourism and shopping experience," Voyles said while giving a tour to reporters Wednesday. "We think it's a fairly innovative approach."

Part of that innovation included contributing to the reelection campaigns of key state figures. Voyles is a son-in-law of Bill Yates Jr., who heads Yates, Mississippi's largest construction firm. The company and family are large donors to Republican causes, giving $145,000 to state GOP candidates in 2010 and 2011, according to the National Institute for Money in State Politics. That includes more than $50,000 to Bryant and $30,000 to Lt. Gov. Tate Reeves, the AP found.

The state began subsidizing retailers when it approved the Bass Pro/Trustmark Park combination for rebates, paying $12.4 million through 2012. Developers are eligible for $17.8 million over 10 years. Since the rebates were created in 2009, $17 million has been paid to six developments.

The opening of the outlet center comes on the heels of Bryant's budget recommendation for the 2015 fiscal year.

"This balanced budget funds Mississippi's highest priorities—investing in our children by continuing to improve our education outcomes, protecting public safety, continuing our economic development efforts and ensuring the basic function of critical government systems," Bryant said Wednesday.

The investments of which Bryant speaks include a "targeted" 1 percent increase in K-12 education funding, driven by a $22,418,838 boost in the K-12 budget. The Mississippi Adequate Education Program, which is supposed to guide education spending, received level-funding from previous years, meaning schools will be short about $250,000 next year. Even though the Legislature is supposed to use the MAEP formula to pay for schools, lawmakers have consistently failed to fully fund the program.

Not surprisingly, Bryant's budget does not include funding for Medicaid expansion, which the Affordable Care Act permits states to do, but to which Bryant has objected. Bryant's budget does include a 5.4 percent increase for the Department of Medicaid, mostly due to adding $4.4 million for the state reimbursement for "disproportionate share" payments to cover the costs of uninsured people. Hospitals lost these payments under Obamacare hoping that more Medicaid patients would help make up the losses.

Bryant's budget does give significant increases to some agencies. Following through on his promise to promote a criminal-justice reform agenda in the next session, which starts in January, Bryant wants use $2 million to beef up local prosecutors' offices, and he wants to give the Mississippi Department of Corrections an 8.3 percent increase as well as $22.4 million to cover the current budget year's shortfall.

In addition, Bryant proposes $70 million in capital improvements around the state, the first step in a five-year plan to make renovations to state buildings.

The Associated Press contributed to this story.

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Comments

Belvedere 6 years, 9 months ago

Does the outlet mall pretty much render moot the so-called Riverwalk of exclusive boutique shops? I would think yes. Will the Riverwalk developers continue with their plans to flood the river to put up the Riverwalk? Even though it makes no sense to put a mall in the river bed in the first place? Again, I would think yes.

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msnative1943 6 years, 9 months ago

This is nothing but corporate welfare.

The story is slightly inaccurate because it reports that the mall project was "stalled" until the tax subsidy kicked in. That's actually not the case, according to insiders. The project was moving forward, "damn the torpedos, full speed ahead." It was stalled earlier only because of the economy. There was never any doubt that Yates would do this, if for no other reason than to shore up the tax-subsidy driven Trustmark Park baseball field that Yates also owns. The sales tax was not necessary to do the deal or to even make the deal profitable. It was already going to be hugely profitable, as soon as the economy turned around.

The sales tax subsidy law was changed last year to give a huge windfall to daddy warbucks, Bill Yates. (I wonder if all these airplane trips for Phil Bryant's campaign were reported on the contribution lists? And, if the corporate limit of $1,000 per election somehow got lost. Hm.) Even if all of the political contributions were reported, I'll bet you dollars to donuts that nobody else in this state can boast such a return on their investment!! And, from taxpayer money to boot. I hope they paid their lobbyists a lot of money, because they sure earned it!

I don't know, but my guess is if this $24 million "welfare payment" was made to real poor and needy people, the folks that got the money for Yates, if not Yates himself, would be screaming to high heaven about those damn "welfare moms." I guess it's another one of those times when the rich just get richer, and screw the rest of us. just saying . . .

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Ms_jxnnative 6 years, 9 months ago

I would bet that Bill Yates has created more jobs for Mississippians than anyone in the state. The Outlets of MS just added 1,600 more. I am sure those newly employed people are thankful for the tax incentives. Just saying.

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js1976 6 years, 9 months ago

"This is nothing but corporate welfare."

People have made similar statements regarding the tax incentives Nissan was given, but our state needs jobs and these corporations are providing just that. Money that is invested and produces for the state is not a "welfare" payment.

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blackwatch 6 years, 9 months ago

JS, I disagree that this isn't a welfare payment, it purely is just that, corporate welfare. The only way the state could justify that the $24 mil was an "incentive" or investment, would be to have assurances that the income taxes on the jobs "created", and sales taxes collected, would more than make up for the initial payment. Also, they would have to show that this company could not have done this without the help of the state, in other words, was this even necessary?

And for me, I would like to see how this would be the best way to invest $24 mil of taxpayer dollars rather than putting it toward education or Medicaid expansion. "Job creation" is a lame excuse for corporate welfare, and MS pays dearly for not holding its elected officals accountable for puting these private companies on the public dole.

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js1976 6 years, 9 months ago

We would first have to have the extra $24 million to invest in education or Medicaid expansion. So far, the states only investement is a reduction in the percentage of sales tax they will collect.

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tsmith 6 years, 9 months ago

"Job creation" is a lame excuse for corporate welfare

I suspect if you were the beneficiary of the job created your outlook may be different.

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robbier 6 years, 9 months ago

"the best way to invest $24 mil of taxpayer dollars "

You realize this 24 million isn't out of the taxpayer coffer right?

It's 80% of future sales tax directed to Yates, while the other 20% goes to the taxpayer bank, per se.

100% of no sales tax generated, if Yates had not taken the risk to develop this center, would still be zero dollars.

So we get 20% of sales taxes generated until 30 million is generated in sales tax, i.e. 428 million in gross sales at the outlet mall. After that the State will receive 100% of future sales tax revenue.

How is this hard to comprehend? I struggle with the notion that some of y'all literally can't grasp how tax incentives and risk work.

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waynebob 6 years, 8 months ago

Anti - corporate/big guy vs little guy/private business bias is why. To them, businesses are just something to tax in order to fund government programs. To allow an entrepreneurial venture to receive a tax incentive is seen as stealing, even though desperately needed jobs are being created.....which they can't see ultimately increases tax revenues, even more so than any front end tax break.

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blackwatch 6 years, 9 months ago

Tsmith,

No I wouldn't. Tax incentives, or more accurately, corporate welfare, are the currency that elected officals use to garner esteem and "favors", and more directly campaign contributions, from corporate types. If all corporations needed the welfare in order to do business, do you think they would survive? If there is a boatload money to be made by locating a plant in an area, the corportation will not decide not to place it there because of not enough tax incentive. But, if these elected officals are offerring the welfare, they see no problem in obliging them.

Corporations are not in the business of "creating jobs", they are looking to make profit. Employing laborers is just part of cost of doing business, nothing more, nothing less. While many corporations sell themselves as "job creators" to local communities to justify the welfare, if they could make money without labor, or without paying labor (see chattel slavery and its profitability), they sure enough would.

So, I say that corporate welfare could be better invested in things like infrastructure, education, healthcare, housing, etc. If we had a healthy, educated, highly skilled work force that lived in safe and thriving communities, then corporations would be beating down our doors to set up shop here, without the welfare. The article is correct, where are our priorities? Corporate welfare for Mississippi doesn't make sense.

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jaytown 6 years, 9 months ago

To be candid, it looks to me like the 1600 "new" jobs to be created will mainly be jobs that will be taken away from "mom and pop" and other retailers in all of central Mississippi. The Governor said that "20% of the sales will be from out of state. Really? That's it? The net effect is that you are only reshuffling the deck of current retail business, with the latest new kind of "Walmart" type operation twist. Except, this time is "our own" walmart guy, Bill Yates.

The public policy implications of this whole development have been totally ignored, if not turned on their head. This development does not create a massive financial impact for the state, it does not create a "tourist" destination with other spinoff businesses. It creates a major new profit center for one of Mississippi's wealthiest businessman, at a huge cost to the state's tax base ($24 million in DIRECT subsidy), a huge negative impact on other local retailers that can't compete with the volume (and certainly don't have the tax subsidy) and totally ignoring long term implications.

The drumbeats can now already be heard how the massive traffic jams and congestion will need to be immediately addressed in order to "save" the outlet mall and the area. So, what will we do? Hm, I guess Yates will next flex his lobbying muscle to get the legislature to force MDOT to build some new interstate exit ramps and all kinds of other related highway infrastructure for poor little old Pearl. Now we are talking about some serious money, in the tens of millions of dollars. Ain't private enterprise great!

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js1976 6 years, 9 months ago

"This development does not create a massive financial impact for the state, it does not create a "tourist" destination with other spinoff businesses."

That remains to be seen. Bass Pro has certainly created a "tourist" destination, and has generated a massive amout of spinoff business for that area.

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Ms_jxnnative 6 years, 9 months ago

"The net effect is that you are only reshuffling the deck of current retail business"

jaytown, let's take a closer look at your statement.

First, do you know anyone that travels to Foley, Alabama to shop at their outlet center? I certainly do, lots of people. They won't anymore. Those tax dollars will now stay in state.

Now, the 20% out of state calculation requires a little math. Try to stay with me here. If the Pearl outlet mall does $100 million in sales (which is probably conservative @ 325,000 square feet). That is $7 million in sales tax revenue annually ($100 million * 7%). 20% of $7 million is $1.4 million. Add about $600k for the tax dollars that will no longer go to Foley, Alabama (as described above) and you get $2 million in new revenues annually before adding state income tax revenue for the 1,600 new jobs, real and personal property tax revenues for the City and County plus all of the new state and local tax revenues from the spillover effect of the outlet center.

jaytown, one more thing - not sure if you saw it but the job fair the developer of the Pearl outlets hosted to fill 1,600 jobs attracted over 6,400 job seekers in 1.5 days. The majority of the new, yes new, jobs were filled at the job fair. So your argument that the outlet center steals employees from "mom and pop" is flawed. Our govt leaders have said repeatedly that job creation is a top priority. That coupled with the fact that the state gets 20% of the new tax revenues for four years and 100% after that, the State made a great decision.

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Knowledge06 6 years, 9 months ago

How many of those 1600 jobs are actually FULL TIME jobs? Since we're talking retail it's probably only 25%. It actually makes a difference when you're talking about taxpayer dollars.

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tstauffer 6 years, 9 months ago

I don't really have a dog in the hunt over the Outlet Mall, which to me seems like a mixed bag on the development front, but I think proponents are white-washing two issues.

First, it is worth noting that, generally speaking, big box retail doesn't create new purchasing as much as it moves people's purchasing from local independents (and, these days, other big box retail). You only need so many socks and jeans and shoes. (Some people, I understand, "need" more shoes than others.) So the net effect of big box development is generally to move buying patterns. As a result, more of the dollars spent leave the local economy -- big boxes don't use local banks (as much), don't employ local accountants, don't often use local advertising agencies, etc.

Second, small business rarely is subsidized at the same level of large developers and chains in order to "bring jobs" to the marketplace -- something that supposed market conservatives should admit is an unfair competitive advantage for larger entities. $24 million is about $15k per job created, if 1600 is the real number. (Again, this isn't Wal-Mart we're talking about, so it's an open question as to whether the wages offered will depress the market or raise wages generally; I suppose either is possible.) But if you gave me $15k to create a job at the JFP, I'd be happy to oblige -- of course, nobody ever seems to present that option.

The truth is that creating 1600 jobs in Pearl will probably, ultimately, move those jobs from somewhere else, because the demand for the goods in Pearl will not be conjured up from thin air; that demand will be taken from other businesses. The best spin you can put on it is that these businesses (a.) might employ some marginally higher number of people because they're corporate and relatively inefficient and/or (b.) the jobs they're taking are being taken from Alabamans, and we hate those people. :)

I guess, for me, it comes down to this... why is it the government's role to mitigate a developer's risk on a venture like this, when it's clearly likely to harm other businesses in the region? And, is this fair if the same subsidies aren't made available to others?

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tsmith 6 years, 9 months ago

And, is this fair if the same subsidies aren't made available to others?

That's the question I ask as well Todd. There is a small outlet mall in Vicksburg that made that very argument when the details of this plan were announced to no avail, that's not a level playing field.

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Belvedere 6 years, 9 months ago

The rich get richer, the poor get poorer, and the middle class flock to the outlet mall.

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js1976 6 years, 8 months ago

"big boxes don't use local banks (as much), don't employ local accountants, don't often use local advertising agencies, etc."

Big boxes rely on local maintenance contractors though. So you have plumbers, electricians, HVAC techs, and landscaping companies. So don't rule out local stimulation just because the outlet mall is composed of big box stores.

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tstauffer 6 years, 8 months ago

Yup, there's some return to a local economy because there's a big building sitting there.

The fundamental point, though, is that the "multiplier" for local businesses is considerably higher -- http://www.amiba.net/resources/studie...">usually 1.5 to 3 times the economic impact of chains.

Example:

http://jacksonfreepress.com/users/pho...">https://jacksonfreepress.media.client..." alt="None">

by Todd Stauffer

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Enlightened1 6 years, 8 months ago

Yaaa for new jobs coming into our state. So, since our Governor is all in favor of job creation, then why is he so adamant about stopping Medicaid expansion in our state which would create approximately 9,000 new jobs. Something smells very fishy to me!!

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