On Thursday the New Orleans City Council pushed forward plans to assess an additional 1 percent sales tax on all items sold at the proposed Magnolia Marketplace shopping center under development on Claiborne Avenue.
The money generated from the 1-cent tax would be used to support bonds to pay for public infrastructure improvements and other “extraordinary” construction costs that make New Orleans a more expensive place to build, developers have said.
The Magnolia Economic Development District, bounded by South Claiborne and Washington avenues and Clara and Toledano streets, was created specifically for the $25 million Magnolia Marketplace. The 98,000-square-foot strip mall will include six national retailers — TJ Maxx, Ross, Michael’s, PetSmart, Shoe Carnival, Ulta cosmetics — and a Raising Cane’s restaurant. A separate phase of development includes construction of a Capital One bank branch, a T-Mobile retail store and another retail store one block over.
The developers plan to finance the development with $5.5 million in equity, $15 million from bank debt and new market tax credits, and $1.6 million in state Community Development Block Grants from the State of Louisiana. The city and developers hope shoppers will pick up the remaining $2.3 million through the higher sales tax. Revenue generated from the tax increase would be used to cover pre-approved public infrastructure costs and extraordinary costs associated with meeting elevation guidelines”.
City officials are touting the benefits of the development, including the tax dollars it will recapture from Jefferson Parish, the return of a major vacant parcel to commerce, and 217 retails jobs with salaries that pay from $28,000 to $60,000.
Construction on the development is expected to begin in January, and the stores could open in April 2015.
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