RIDGELAND — Aldermen have given the go-ahead to issue no more than $2.5 million in bonds for tax increment financing (TIF) monies for the Mercedes dealership at the intersection of Steed Road and Sunnybrook Road.

The board unanimously approved two items on the consent agenda. The first was to adopt a resolution authorizing and directing issuance of Taxable Tax Increment Limited Obligation Bonds, Series 2019, not to exceed $2.5 million for the Higginbotham Automotive Project. The second was adopting a resolution to approve the sale of the taxable tax increment limited obligation bonds, Series 2019, and approving the form and execution of a bond purchasing agreement for sale.

Based on the information presented to the board of Aldermen, sales numbers from the dealership support issuing $2.3 million in bonds over 15 years with an annual debt service of $223,000.

Calculations were based on 100 percent of the projected Ad Valorem and 50 percent of projected sales tax generated by the dealership.

Ward 6 Alderman Wesley Hamlin said that using 50 percent of projected sales tax “protects them” from “maxing out.”

Chris Gouras of Gouras and Associates in Ridgeland said that tax revenues were originally projected to allow as much as $3.3 million in TIF money for infrastructure improvements in the development when they were first approved in July of 2016. 

Gouras informed the board that the dealership was doing better than expected but a large amount of out-of-state sales diminished local tax revenues a bit.

“The dealership is doing better than we thought,” Gouras said. “Business is doing good and thriving but the tax revenues are not quite as high as anticipated.”

Ward 1 Alderman Ken Heard said that he was fine with the TIF as long as no further bonding would be requested.

Aldermen were originally split on the TIF plan in 2016 but it ultimately passed 4-3, with Heard, Ward 3 Alderman Kevin Holder and Alderman-at-Large D.I. Smith voting against. 

The TIF was approved by the Madison County Board of Supervisors in August 2016.

The Higginbotham family acquired the dealership previously located at I-55 North in Jackson in 2001 and now is rated as one of the top 30 Mercedes-Benz dealerships in the country with the company’s Best of the Best Dealer Recognition Award. The honor is based on the highest levels of customer satisfaction, market penetration and performance determined by the company. 

The 70,000-square-foot facility is one of the largest Mercedes-Benz dealerships in the south and double the size of the former Jackson I-55 location. It opened in November 2017.

The property only generated approximately $200 in taxes before development. The dealership now generates over $75,000 in local taxes.