When the state Legislature passed the ill-conceived law subsidizing retail outlets, it could never have foreseen the result would be a huge zoning crisis in Ridgeland. Such is the law of unintended consequences.
It started a couple of years ago when the Yates Companies pursued the idea of getting special tax credits for an outlet mall in Pearl.
The politics were right. Both the governor and lieutenant governor get a huge number of their votes from Rankin County. Having a big Rankin plum to boast about helps their election campaigns.
The law seemed custom-tailored for Yates’ Pearl outlet mall. Yates owned both the development company and the general contracting company. It was a sweet deal, allowing $25 million in sales tax rebates to pay for a third of the development.
What business does government have in favoring one retail development over another? The Pearl deal was crony capitalism at its worst. These types of deals are rampant in Mississippi and undermine our free market system. A national group rated Mississippi number two in the nation in crony capitalism.
It is ironic that the Republican Party has embraced crony capitalism to the max. When I think of being “pro business,” I think of getting government out of the free market, not picking winners and losers.
But the Mississippi Republican Party has another concept of being pro business. Being pro business to the current Republican establishment means helping your business buddies get sweetheart tax subsidies so they don’t have to compete on a level playing field. It’s a statewide scandal.
The Northside Sun contacted the founders of the Renaissance about the Pearl outlet deal. Surely, we thought, they would be hopping mad about the government giving their Pearl competition a one-third advantage. They had no comment.
Now we know why they had no comment. They were busy licking their chops at their own deal. If you can’t beat ‘em, join ‘em.
This new state subsidy soon became a free for all. Out-of-state developers jumped into the game and filed proposals in DeSoto County and on the coast. The new Pearl subsidy law was about to fundamentally change the nature of retail outlet finance in Mississippi. All existing retailers were about to suffer a huge disadvantage. The subsidies were at $250 million and rising fast.
Belatedly, thanks to a bill sponsored by Northside state Sen. David Blount, the law has been repealed as of July 1. But not before investors in the Renaissance filed their applications for a massive tax-subsidized expansion.
To meet the square footage requirement of the tax subsidy, the Renaissance expansion needed to be big, very big. It seems Costco, with its massive store, filled the bill.
That’s why the developers will fight so hard to keep the Costco near the Renaissance roundabout. If the Costco doesn’t go there, the state subsidy may be in jeopardy. There’s $30 million on the line.
I am not trying to villainize developers. Some of my best friends are developers. They get the best deal they can. That’s their job.
I am more critical of the politicians who pass these misguided laws favoring certain businesses and certain industries. It interferes with the free flow of capital and lowers our standard of living. Ultimately, the voters are responsible for re-electing leaders who vote for these subsidies.
These subsidies invariably go to the biggest companies with the best lobbyists. Small businesses, which provide most of the jobs in Mississippi, get the shaft and end up paying the bill. The mom and pops have to carry water for the mega companies. This is bad business. It’s also not fair.
The millions of dollars in subsidies invite corruption of our governmental processes. It’s just too much money for mere mortals to resist.
You see this corruption in subtle ways. When the Sun filed an open records request to the Mississippi Development Authority for details on Yates’ Pearl outlet mall deal, we were told it was “propriety information.”
This loophole to our open records law allows public money to be funneled to private companies under a cloak of secrecy.
This thwarting of our open records law is similar to using special emergency exemptions to avoid competitive bidding. “Propriety information” and “emergency exemptions” and other such loopholes are being used to completely ignore basic laws designed to protect the people from government abuse.
Here in Ridgeland, look at the way our zoning laws were corrupted. The land near the roundabout on Highland Colony Parkway was zoned C-2 in accordance with the city’s long-range master plan. To rezone the property would have required public notice and open hearings.
Instead, the city officials stayed below the radar screen by changing the definition of what constitutes C-2. Basically, they snuck it through.
The mayor and aldermen trashed the entire long-range master plan of Ridgeland for one $30 million sweetheart deal. This completely flaunts the whole intent of zoning. It also flaunts our state laws demanding open government.
Finally, we have subtle soft corruption of the morals of our city officials. We all know we’re not supposed to lie. Yet under the guise of “business confidentiality,” Mayor Gene McGee felt it was appropriate to conceal the Costco deal from his constituents.
To be sure, McGee is not the first mayor to keep an economic development deal secret. Unfortunately, this has become common practice in our state. But just because a developer wants a mayor to lie doesn’t make it OK.
Development projects that involve our zoning laws are a matter of public concern and should be conducted in an open manner. The correct response of any mayor and alderman is to inform that developer that their first responsibility is to be truthful and forthcoming in all matters of public trust. This is just one more example of how the lure of big money subverts our government to operate in secrecy.
Most of us want job growth for our cities, counties and states. No problem there. But don’t throw the baby out with the bath water. The best way to promote job growth in Mississippi is to have good government and a level playing field for all companies. We need to shed our image as the most corrupt state in the nation.