Jackson Free Press

A sluggish economy has pushed back a completion date on the re-development of buildings across Capitol Street from the King Edward Hotel, developer Jason Goree told the Jackson Free Press yesterday. Goree said that he had hoped to complete renovations and fill the four buildings by December 2010, but those plans have been pushed back for spring 2011.

"That's still my goal, but realistically I don't know if we'll get it done that fast," Goree said. "The economy has played a big part of it."

Goree's firm, 3-G Management, which is taking the lead on the project with the help of King Edward developer David Watkins, is using New Market Tax Credits and historical preservation tax credits to help finance the development. In a more optimistic economic climate like after Hurricane Katrina, a developer could sell tax credits for their dollar value, Goree said, meaning that selling a $5 million tax break could bring $5 million to a project. Currently, development tax credits are fetching closer to 65 percent of their dollar value, he said.

Banks are also still wary of lending, especially to projects involving start-up businesses. Goree and Watkins had originally hoped to fill the project primarily with new businesses, but they are now opening their search to established owners."That's the biggest headache," Goree said. "All the companies have to be strong people so the bank feels comfortable."

Goree and Watkins also want to settle on tenants for all four buildings before starting work on any individual structure. Because of overhead administrative costs in acquiring historic preservation tax credits, it is cheaper to lease the four buildings together and pay the administrative cost once, than to complete the process separately for each business.

Goree and Watkins have agreed on a plan for the row of businesses, however. In the building at the corner of East Capitol and Mill streets, the two intend to place a restaurant and bar featuring live entertainment. Next door, in the old Peoples Cafe, they envision a store selling wine and spirits, and after that, a medical clinic, likely operated by one of the metro-area hospitals, to serve as an anchor in the middle of the row. For the last two spaces, Goree and Watkins want an upscale clothing boutique for men and women and a small New York-style deli with limited grocery offerings.

Goree acknowledged that the dilapidated buildings are an unpleasant contrast to the newly refurbished King Edward. "We hate for people to have to look out their window at that," Goree said.

Goree says he now aims to have the project finished by February or March 2011.