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Plans for hotel in downtown Ocean Springs getting closer to reality

By Warren Kulo | The Mississippi Press | March 28, 2013

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Ocean Springs Mayor Connie Moran says signs are "positive" that developer Walker Thrash will get the necessary financing to build a 30-room boutique hotel on this property on Government Street.

File Photo/Gulflive.com  

OCEAN SPRINGS, Mississippi -- Mayor Connie Moran said Thursday she is "optimistic" a planned 30-room boutique hotel in downtown Ocean Springs will become reality after receiving an email from developer Walker Thrash earlier this week.

"The developer has submitted all the necessary paperwork -- financials, a business plan -- to the local bank they're working with and he expects a decision in a couple of weeks," Moran said. "Everything is looking positive at this point."

Once financing is secured, the hotel would be built on property on Government Street where for many years Fallo's Cleaners was located.

The city purchased the property from the Fallo family for $286,000, using a Community Development Block Grant (CDBG) for post-Hurricane Katrina downtown revitalization.

The city then deeded the property to the Ocean Springs Chamber of Commerce, which will then enter into a 50-year lease with the developer for $1 per year.

Moran said the 50-year lease is "typical" for economic development projects.

If completed, the four-story hotel would feature 30 rooms, a restaurant/lounge, a grand lobby and a 47-car parking lot.

In addition, the city has preliminary plans to create a rear access road that would connect Robinson Street to General Pershing. Moran has said previously that road would open landlocked parcels and that developers would donate $25,000 toward a neighborhood playground. The city plans to use Streetscape grant funding to acquire property for the park.

At the last Ocean Springs Board of Aldermen meeting, Ward II alderman Matt McDonnell questioned how much money the city had spent on the project thus far and asked Moran to report back at the board's next meeting, which is Tuesday.

Moran said Thursday the city has spent no money on the project. Work done by Public Works to bring water service across Government Street to the property and upgrades to the sewer system were paid for by Thrash Development, which paid the city $23,000 for the work.

In addition, Thrash paid $2,000 to Macedonia Baptist Church for a sliver of property along the north property line to allow room for the hotel parking lot.

City officials estimate about $14,125 annually would be garnered from the 2 percent hotel tax with 50 percent occupancy and $49,439 in annual 7 percent sales taxes, of which $8,900 would go to the city.

City leaders also predict there would be $14,080 in annual property taxes to accrue after four years of operation, if the hotel has 65 percent or more average occupancy. In order for the hotel to continue under the $1-per-year lease, it would have to average at least 60 percent occupancy, Moran said.

Also, preliminary projections have determined that 28 new jobs would be created and annual school tax revenue would be $43,453.

Should Thrash Development ultimately not proceed with the project, Moran said there are other hotel developers who have expressed an interest.

"If it doesn't happen, we've got other developers we can work with," she said, "because it's clear the need exists for a hotel downtown."

The Mississippi Press contacted Walker Thrash, who was in a meeting and unable to make immediate comment.