The Bailey Medical Towers Development Project

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The Bailey Medical Towers Development Project
Jackson Public Schools

• February 20, 2006

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The Bailey Magnet School and UM Medical Center
Area
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The Project

• Explore possible commercial development of unused
  property on the north side of the Bailey Magnet
  School Campus

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Scope of Project

• Pursue commercial development of practice field
  and public park areas
• Develop highest density and highest value usage
• Projected amount of project 100 million - 150
  million

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Factors Influencing Bailey Plan

• Financial needs of district compel looking at
  alternate methods of generating revenues for the
  district in the future
• Proximity to UMC Medical Complex offers unique,
  significant, and timely commercial development
  opportunities
• While there is some risk, the potential returns
  to the district greatly outweigh any potential
  loss or liability to district and board

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Factors Influencing Bailey Plan

• School board has new authority under the School
  Property Development Act of 2005
• Positive experience with Duling School
  Development (7 million return on 1.3 million
  property)
• Window of opportunity with the GO Zone
  legislation (January, 2006 thru December, 2008)

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Overview of Project

• Using the authority under the School Property
  Development Act of 2005
• The School Board will seek a public-private
  partnership with experienced developers,
• Board will utilize an RFQ process to select the
  best qualified development team
• The district will be a part owner of the
  development corporation and will share in the
  financial returns

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Overview of Project

• Risk to the district is limited to the value of
  the land to be transferred to the development
  company
• The developers will explore all possible options
  for commercial development of the property
• Note this does NOT involve the Bailey school
  building.

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Overview of Project

• Tax incentives from GO Zone legislation may
  provide district with substantial financial
  returns, either using the bonus depreciation
  under the act, or issuing private activity bonds
• Time is of the essence, due to limited time
  period for financial/tax incentives provided by
  the GO Zone legislation

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Target Area for Development
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Possible Development
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Potential Development

• Commercial tower I
• medical offices,
• clinics,
• research labs and
• other commercial and retail space
• 600,000 sq ft projected need
• 60-80 million

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Potential Development

• Residential tower II
• condominiums,
• apartments, and
• affordable housing for UMC students
• 300,000 sq ft project need
• 30-40 million

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Potential Development

• Medical Facility III (possible future development
  consideration)
• Nursing home
• Extended care
• Assisted living
• Retirement village
• 30-40 million

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Twin Towers Prototype
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Twin Towers Alternative Prototype
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Process

• Board will publish an Request for Qualifications
  (RFQ) seeking local and national development
  teams to submit proposals
• Development concepts and developer qualifications
  will determine the ultimate selection of the
  development team

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Process

• A review committee/consultant will initially
  review the submissions
• Finalists will give oral presentations to board
  and board will make the final selection decision
• The development team will prepare a development
  plan that will be presented to the board for
  approval

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Benefits to JPS

• Increase in ad valorem taxes estimated at
  1,000,000 per year, upon completion
• Additional profit revenues from leases to
  development JPS share projected at 3 million
  per year

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Benefits to JPS

• Provide new jobs and new revenues to the City of
  Jackson in a high-growth industry
• Ability to use revenues to fund building projects
  for JPS in other parts of the city WITHOUT a tax
  increase

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Conclusion

• No guarantees, but minimal risk
• Huge potential returns to JPS
• If even partially successful, it would provide
  significant facility development ability with no
  tax increases.

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