Business secures tax breaks for downtown renovations

The Columbus City Council approved a 10-year tax exemption for downtown business owner Tom Velek at a meeting Tuesday night.

Velek owns a building at 322 Fifth St. S., which is adjacent to the former downtown Fred location. He purchased it in his early 2021 and went to the council later that year to request a deliberate settlement of the 10-year ad valorem exemption, which was approved.

He returned Tuesday night to ask the city to honor its commitments as the renovations were completed.

Property renovations are eligible for local ad valorem exemption for up to 10 years under two state laws because they are located in both the central business district and the historic district.

Fifth Ward Alderman Stephen Jones (the ward where the building is located) is the second to move to grant the waiver, after First Ward Alderman Ethel Taylor Stewart.

But Deputy Mayor Joseph Mickens had some concerns.

“The city is in business to collect taxes,” he said. “I don’t really like going down this road. very deeply.”

Ad valorem tax is levied annually on real and movable property.

Despite his reservations, Mickens entered the council to approve Belek’s request, which passed unanimously.

“As a small businessman, I appreciate your support,” Verek told the council. I know you’re here, but thank you.”

A tax cut does not exempt the property from taxation entirely, it just means that it is taxed at its old value. So if the property is worth his $1 million and a $500,000 extension is made, it will still be taxed as if it were worth $1 million.

According to tax records, the building is currently valued at $66,370.

Speaking to The Dispatch on Tuesday night, Velek said the building will have two floors and about 6,000 square feet. Built in 1953, it houses many businesses including Elaine Evans CPA, J’nell’s, Rainbow of Columbus, Kirby Sales and Service, and Perkins Sporting Goods.

“The second floor, which previously housed the Mississippi Forest Commission and several small businesses, has been vacant since 1989,” he said. “It was an empty house for 40 years.”

About a quarter of the downstairs was occupied by Elaine Evans’s accounting firm until about six years ago and has been vacant since, he said.

“This property was empty and derelict,” he said.

Velek uses this building for a mix of commercial and residential spaces.

“We have a commercial on the 1,400-square-foot front on Fifth Avenue,” he said. “On the second floor he has two 1,400-square-foot apartments. We split the downstairs and created an entrance through the back door, where he created a one-bedroom apartment.”

Commercial space is under contract and all three apartments are occupied.

Velek estimates it spent about $750,000 on the project, including the purchase of the building.

Jim Mauldin purchased 322 Fifth St. S. and the old Fred location in 2021, Velek said. Verek bought part of the building from Mauldin, who turned the old Fred’s place into a climate-controlled mini warehouse.

Velek said it did not seek historical tax credits from the Mississippi State Archives and Department of History.

“In the end it wasn’t a good option because of some requirements,” he said.

Velek said local interest is the best hope for empty downtown buildings.

“When it comes to downtown, there’s no Walmart,” he said. “Target is not coming to renovate. If locals don’t do it with the support of Congress, it will be empty.”

Several downtown properties have been granted the same exemption. Old Fred’s Mauldin renovations last year included the Stone Hotel on 5th Avenue South, Gail Gainup’s property on College Street, and Mark Alexander Sr. on 5th Avenue North. won it in a split vote, similar to the property in .

This exemption does not affect school district taxes.

Brian Jones is a local government reporter for Columbus and Lowndes counties.