The Columbus City Council approved a 10-year tax exemption for downtown business owner Tom Velek at a Tuesday night meeting.
Velek owns the building at 322 Fifth Street. S., adjacent to the former downtown Fred’s location. He bought it in early 2021 and later that year asked council for a resolution of intent for a 10-year ad valorem exemption, which was granted.
He returned Tuesday night to demand that the city honor that commitment now that the renovations are complete.
Due to its location in the Central Business District and the Historic District, the renovation of the property qualifies for up to 10 years of local ad valorem tax exemption under two state statutes.
Stephen Jones, MP for the 5th Ward — the district where the building is located — agreed to grant an exemption, and Ethel Taylor Stewart, MP for the 1st Ward, made a second suggestion.
Deputy Mayor Joseph Mickens, however, has some misgivings.
“The business of the city is to collect taxes,” he said. “I really don’t like going down this road. We get raises, we need equipment everywhere, and we keep dropping our ad valorem tax. .. …We need to go deep. Very deep.”
An ad valorem tax is levied annually on immovable and movable property.
Despite his reservations, Mikans joined the committee and granted Wellek’s request, which was passed unanimously.
“As a small businessman, I appreciate your support,” Velek told the committee. “If I didn’t know the city was behind me, I probably wouldn’t have taken these. I see what you mean, but I appreciate it.”
The tax deduction doesn’t completely exempt the property from tax, it just means it’s taxed at its old value. In other words, if a property is worth $1 million and it has a $500,000 extension, it is taxed as if it were still worth $1 million.
According to tax records, the building’s current assessed value is $66,370.
The building is about 6,000 square feet spread evenly over two floors, Velek told The Dispatch Tuesday night. It was established in 1953 and is home to many businesses including Elaine Evans CPA, J’nell’s, Rainbow of Columbus, Kirby Sales and Service and Perkins Sporting Goods.
“The second floor was formerly home to the Mississippi Forestry Commission and some small businesses and has been vacant since 1989,” he said. “It lasted 40 years and it remained vacant.”
He said about a quarter of the space downstairs was used by Elaine Evans’ accounting office until about six years ago and has remained vacant since then.
“The property is empty and it’s getting more and more dilapidated,” he said.
Velek uses the building as a mix of commercial and residential spaces.
“There’s 1,400 square feet of commercial space up front, facing Fifth Street,” he said. “There are two 1,400-square-foot apartments upstairs. We split the downstairs to create an entrance at the back and put a one-bedroom apartment there.”
The commercial space is under contract and all three apartments are occupied, he said.
Velek estimates he spent about $750,000 on the project, including buying the building.
Jim Mauldin bought 322 Fifth Street. Velek said, S. and the location of Fred Sr. in 2021. Velek bought his piece of the building from Mauldin, who turned the old Fred’s location into a climate-controlled mini warehouse.
Velek said he did not seek the history tax credit from the Mississippi Department of Archives and History.
“It ended up not being a good choice because of some of the requirements placed on it,” he said.
Local interest is the best hope for vacant buildings downtown, Velek said.
“When it comes to downtown, there’s no Walmart coming,” he said. “Target is not going to come and renovate it. If the locals don’t do it with council support, it’ll be empty.”
Several inner-city properties also received the same exemption. Mauldin’s renovation of the old Fred’s received mixed votes last year, along with the Stone Hotel on Fifth Street South, Gail Guynup on College Street and Mark Alexander Sr. on North Fifth Street.
The exemption does not affect school district taxes.
Brian Jones is a local government reporter for Columbus and Lowndes counties.
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