The future of the Threefoot project hangs in suspension, and it's a distinct possibility that the years of work on the project will end with a parting of ways between the city and New Orleans developer HRI properties.

After a work session with HRI representatives Wednesday, two council members said they were in favor of terminating the agreement with HRI. Another council member, Dr. George Thomas, was not available for comment, but voted against the agreement when it was first reached in January and has since expressed his reservations about the project on numerous occasions.

It would take a majority vote of three council members to terminate the agreement.

If the agreement is terminated, the city would owe HRI $1 million for the costs they have incurred on the project and would have to figure out what to do with the dilapidated Threefoot building.

If the city decides to continue with the project, in which HRI will renovate the historic downtown building into a Courtyard by Marriott hotel, they will be obligated to guarantee $14 million to the $55 million project.

A representative from White Construction, a general contractor involved with the project, said it would cost between $2.2 and $4.2 million to "mothball," or temporarily preserve, the building. City officials said it would cost somewhere in the millions to demolish.

City Attorney Bill Ready said his recommendation to the council is that they terminate the agreement, saying that by doing so they will "remove themselves from a most destructive economic situation."

In addition, Ready questioned whether the city's redevelopment agreement with HRI is actually binding, saying, "There is some real serious legal question as to the validity of how we got where we are, here right now."

He said the city would have a case if the council decided not to pay HRI the million dollars that the redevelopment agreement stipulates the city will owe if the council terminates the project.

However, Mayor Cheri Barry, Council President Bobby Smith, and Jet Hollingsworth, another attorney representing the city, said the city would honor the $1 million obligation if the council decides to terminate the agreement.

Smith said in an interview after the meeting that his inclination is to terminate the agreement, adding, "It's been too long. We've got to rectify this right away."

Smith was elected this year to the Ward 5 council position, which was previously held by John Harris. Harris was one of three council members to vote for the redevelopment agreement in January.

Barbara Henson, councilwoman for Ward 3, voted against the agreement in January and said in an interview Wednesday she will vote to terminate it when the decision is put before the council.

"I'm still standing by my original vote," she said. "I'm opposed to the project... We are not financially sound enough right now to do that. We've got a lot of other big projects... and I don't see anything that would change my mind at this point."

Meridian Mayor Cheri Barry gave similar reasons for her desire to terminate the agreement.

"I'm concerned as the mayor what kind of commitment this is going to put financially on our city," she said. "We (the city's administration and its financial and legal advisers) have all decided it is not in the best interest of the city of Meridian for the taxpayers to make this project go forward."

Barry cited the many other expenses the city anticipates, including debt payments on the multi-million dollar City Hall renovations, the need for a new police station, the need to provide water, sewer, and fire services to the recently annexed area, and the fact that city employees did not get the 3 percent raises they are used to this year.

Barry said the city has already collected around a quarter of a million dollars below what was projected for sales tax revenue so far this fiscal year, and said the economy is just too shaky to continue with the project.

"It's not that I'm against the project," she said. "It's the timing of the project."

Not all of the city's elected officials want to put a stop to the project. Ward 2 Councilwoman Mary Perry explained to the crowd of around 40 public officials, HRI representatives, and members of the general public why she voted for the agreement in January and why she will vote to uphold it in the future.

"In this project the tax credit money (which HRI is using to finance the project) that is allotted cannot be used for anything other than the Threefoot project," she said. "If this project fails, we do not pay that $14 million back until seven years later. It is said that the economy will turn around in five years."

In seven years, if the project fails, the city will pay between $50,000 and $100,000 a year on the $14 million guarantee.

Many of the members of the general public who were in attendance also showed their support of the project. When Perry asked the people to "raise your hand if you want the project to go away," only four did so. A large majority of the rest of the crowd raised their hands when asked to do so if they supported the project.

One vocal supporter in attendance was Barbaree Heaster, a local businesswoman who is active with the Alliance for Downtown Meridian.

"I cannot imagine that we are sitting here today and you've got a developer that's willing to come into this town and put in 30-some-odd million dollars.. I truly feel we are making a huge mistake if we don't move forward with HRI now," Heaster said, adding that the project could reduce the city's budget worries in the future by generating additional sales tax revenue.

If the project goes forward, HRI will bring about $35 million to the table through investors and loans. $14 million will come from the city's guarantee, and $6 million are expected to come from the state and other sources. The total cost of the project is estimated at $55 million.

Meridian resident Rebecca Combs also voiced her support of the project, saying, "We are questioning an organization that has been questioned over the last five years, upside down, inside out. The fact that... this is looking to be overturned to me is ludicrous.... Move ahead, expedite it, get those shovels in the ground."

Combs also pointed out that, of 40 historic renovation projects developed by HRI, only one has failed. HRI CEO Pres Kabacoff said that project, a $250 million renovation in St. Louis, failed due to unforeseen effects of 9/11 and the closing of an airport.

Local real estate magnate Gil Carmichael said he previously supported Barry's push to terminate the project, but changed his mind during the work session when facts were clarified.

"If we kill the project right now, we've got an old building down there that we've got a million dollars in," Carmichael said, "and millions of dollars to hold it or to tear it down."

Though the majority of the crowd was there to support the project, there were some who came to voice their opposition.

Most vocal in his opposition was Donny Mathis, a local used automobile dealer. "We're sitting in Meridian in the middle of a financial crisis," he said. "We're unable to (give raises to city employees) because of the $18 million that we're spending on town hall... Yet we sit here and we want to take on a new project."

City officials expressed similar concerns that the Threefoot project would grow astronomically in cost as the City Hall project has done, but Kabakoff assured them "The problems you described that you experienced with City Hall, that's our nickel. That's not your nickel."

In other words, no matter how much the project proves to cost in the long run, the city will not be responsible for anything above the $14 million guarantee.

HRI also addressed the recent perception that the project needed an additional $6.6 million and that they had asked the city to provide it.

They said that perception is incorrect, and that in actuality they had asked the city to assist them in acquiring $6.6 million that had been included in the project cost estimates all along. HRI found a possible source of funding from the state, and asked the mayor to tell the governor that the city wanted to use that funding source.

Barry, however, said if she asks the governor for funding, it won't be for the Threefoot project.

"You keep saying we're not responsible (for the $6.6 million)," she said. "But I'm the one that has to go to the governor and ask for it... When I go to the governor or to Washington to ask for money, do I go after $1.5 million to buy a building (the Trustmark branch on 23rd Avenue) for the city to tear down as a part of this project, or do I go to the governor for $1.5 million to fix the infrastructure in Meridian?"

Kabacoff went over some of the advantages and disadvantages of the project for the city. The advantages, he said, include the large investment that will be made in downtown Meridian, saving an historic icon, and getting a banquet hall in the Kress building as part of the original redevelopment agreement.

The downsides, he said, include the fact that the city is currently facing a poor financial situation, and that the originally projected room rate of $144 per night is now projected at $124 per night. But even with the lower projection, he said, the city will have no shortfall unless occupancy rates fall below 50 percent. "And that's depression type numbers," he said, adding that the economy is in a recession, not a depression.

"Please consider the plusses and minuses and we will respect and move on," Kabacoff told council members.

Kabacoff said that Barry "has been making it very clear to us so far" that she is opposed to the project, and that opposition from the mayor makes HRI "uncomfortable."

He said HRI needs the support and cooperation of the mayor's office to successfully move forward with the project, adding "We're very discouraged."

Henson said that even if the council does not vote to terminate the project, if there is no action taken either toward or against the project by February, the agreement will automatically dissolve.

For HRI's part, Kabacoff said they are willing to deal with any problems that arise and that, "We don't leave unless we are asked to leave."

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