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New developer contract for CottonMill in works

September 29, 2012

By STEVEN NALLEY
educ@starkvilledailynews.com

David Shaw, Mississippi State University’s vice president for research and economic development, has confirmed that a 2009 contract has expired with Mark Nicholas of Nicholas Properties in Ridgeland to develop the CottonMill project.

A contract with Mark Castleberry of Castle Properties, Inc., a Columbus firm is possible but has not been inked.

Shaw said Nicholas’ contract expired in April, and MSU sent out a request for proposals (RFP) for new developers in early August. When the project’s original $100 million proposal could not be financed, he said, MSU consulted its city and county partners before returning to the development community to seek new plans.

“We evaluated all the proposals that were submitted, and we are in negotiations with (Castleberry) right now to see if he can put a package together, but at this time, we don’t have anything contractual in place,” Shaw said. “We’ve gone on for a long period of time with (Nicholas’) group. What we’ve done now is in the absence of any kind of contract with that group.”

Nicholas said while his contract did expire in April, he and his team continued working with MSU “in good faith” throughout the year.

“We met with (MSU) in August with our lender to give them assurance the financing was in place,” Nicholas said. “A week later, we got a notice with everyone else that they had decided to put out an RFP. It was a shock and a disappointment to our whole team that had worked on this project for so long that they decided to go in another direction.”

Nicholas said he could not disclose the bank’s identity, but he said the bank was located outside the state. Shaw said he could corroborate Nicholas’ statement, although he was less certain about the exact length of time that passed between the meeting Nicholas described and the RFP being sent out.

“I think our discussion was centered around getting the best out of the project, particularly the (E.E.) Cooley Building,” Shaw said, “and in that discussion, I think there were some questions about that, so that’s when we decided to put out the RFP.”

In this RFP, Shaw said, MSU emphasized the need for applicants’ ability to obtain financing. He said he is hopeful that Castleberry and his team will find this financing, but exactly how much financing will be needed is still unclear.

“We don’t have a cost estimate right now,” Shaw said. “We’ve had a recession, we’ve had some huge changes in the bond market and the overall economy — not just in Starkville, but across the country — coupled with some very large tightening of the industry has made this a very challenging project.”

Despite the economic changes, Shaw said MSU still desires at least three key components for the CottonMill project.

“We want to absolutely see a conference center for the city, county and university and a hotel to go with that conference center,” Shaw said. “We want to see the Cooley Building used in the best and highest use, because that building is sorely in need of renovation.”

Shaw said MSU also sees a parking garage for the hotel and conference center as essential for the project. Less certain, he said, is the fate of the project’s retail element.

“There has always been the desire to do that, but as far as the specifics on it, we’ve never been able to nail a lot of those down,” Shaw said. “Because of the economy, it’s been difficult to see retail development on that large of a scale happen.”

Meanwhile, Nicholas said he still holds six acres of land at what would have been the project’s southwestern edge, near Buffalo Wild Wings. Having recently finished developing a Chick-fil-A in that area, he said he intends to continue developing within those six acres. He said he is grateful for the support the city and county has offered over the last few years of the project, and he bears no hard feelings toward MSU or Castleberry.

“Are we disappointed? Yes, but in the end it was all about (development in) the city of Starkville and the Golden Triangle,” Nicholas said. “Starkville’s going to be happy with the kind of development we’re (about) to announce on those six acres. I’m wishing the university and Castleberry the best. I hope Castleberry is able to (establish) a conference center for the city of Starkville and the Golden Triangle region, because it needs it.”

Castleberry was out of town Friday and a call placed to him was not returned by press time.

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