Controversy Still Surrounding Tax Abatement Policies

Reported by: Alyssa Meisner
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Updated: 7/02/2014 7:38 pm
Tax abatements can lure developers, but in Biloxi, they've been a point of controversy. News 25 breaks down how Biloxi has used tax abatements to increase development and what the city is doing to stay competitive.

Since Hurricane Katrina, sky-rocketing building and insurance costs have made developers hesitant about rebuilding, but city leaders tell News 25 tax abatements have convinced entrepreneurs that Biloxi is worth investing in. Jerry Creel, the Director of Community Development for Biloxi, says, "Since Hurricane Katrina we've had over $1 billion come to Biloxi with a lot more on the way."

Now, the amounts of money businesses save and the length of time the tax breaks last through these abatements are shrinking. This, and the fact that there are no set rules for just who is awarded these abatements, has some people concerned. Robert Demming, Biloxi Councilman for Ward 4, says, "My position has been seven years at 100% because we have to compete with other cities. We don't just compete with our sister cities, but we compete with cities everywhere. We have to incentivize businesses to come down here and I do think we need a uniform standard."

Developers like Rob Stinson, the owner of Lookout Steakhouse in Gulfport, created a business plan assuming he would receive the same uniform tax break the city granted others in the past, but Stinson only received a five year, 80% tax break despite pleading his case before the Biloxi City Council during a meeting in May. Stinson says, "So you can throw numbers at me. I can throw them back at you. I guess we're in a poker game of sorts. We're in a gambling environment, but I think the key point to me is it is a risk."

Creel says tax abatements are often the first steps in getting a developer to come to Biloxi, but once it comes to City Hall, it’s up to the council. Creel also says, "Everything that's within our ability to control, we do work with them. We get them through the staff. We get them through the Development Review Committee."

At the end of the day, Councilman Felix Gines says the council is trying to do everything it can to bring in more business. Gines says, "We want to try to offer them something, something to move forward, something to entice them here, to get us back to our pre-Katrina numbers."

For now, the final decision on just who gets the tax breaks and for how long remains in the hands of the City Council. Creel will present a workshop to the council later in July to talk about Biloxi's comprehensive plan for economic development.

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