DENHAM SPRINGS – Sales tax revenue generated by the Bass Pro development was strong enough to reduce its debt by $4 million in 2018, according to its audit.
“You had a strong year,” said Trey Sanders, of accounting firm Hannis T. Bourgeois, to the DSEDD board in his review of the audit.
The Denham Springs Economic Development District (DSEDD) accepted the audit for its 2017-18 fiscal year as it continues to shorten the debt owed on its bonds. The sooner the bonds are paid off, the sooner six governmental agencies that pledged some of their sales taxes to the project will start receiving full tax payments.
Sales tax revenue totaled $6,147,154, some $900,000 over 2017, Sanders said. With interest income of $37,378, total income for the district was $6,184,532.
This is what allowed the development district to make principal payments of $1.9 million and $1.4 million in July and October, respectively, Sanders said. This was in addition to its regular principal payment of $845,000.
“That’s a pretty good clip,” Sanders said.
The development district’s long-term debt was reduced to $21,515,000 before the additional principal was paid.
“As of today, you owe $18 million,” Sanders said.
While the bonds issued to develop the 75 acres south of Interstate 12 don’t mature until 2037, they could be paid off by 2023.
For the governmental agencies that pledged their share of sales taxes generated by businesses that came to the district to pay off the bonds, the payoff will allow those agencies to realize the full tax benefit of the Bass Pro development.
“You better believe it," Mayor Gerard Landry said about looking forward to the injection of the 1½ cents in sales tax to Denham Springs’ coffers.
The mayor said, after examining the taxes collected by the development district for the past 12 months, in five years that could be an estimated $1.2 million per year.
“Think about what the city could do with that, the drainage work and roadwork, retire debt – but we don’t have a lot of debt – we’re excited about the opportunities,” Landry said.
“We’re proud of the progress,” he said of the development district, which could pay off its bonds 14 years ahead of schedule.
Paying off debt has helped the development district in other ways.
Net assets are $15,691,623, an increase of $4,013,783, or 34.7 percent, according to the audit.
“This is mainly attributable to continued strong sales tax collections and a decrease in interest expense for the District,” the audit said.
A change in the district net assets happens “because you’re paying your debt,” Sanders said.
The Denham Springs Economic Development District was created in 2003. Used Sales Tax Increment Bonds were issued to fund construction and infrastructure in the 75-acre district south of Interstate 12.
The district leased 24 acres to the Bass Pro Denham Springs Development Co., which built a major anchor store, Bass Pro Shops and Outdoor World. Sam’s Club soon joined the lineup and other businesses have followed.
The governmental agencies that agreed to give up their share of sales taxes collected from stores in the district include:
--City of Denham Springs 1.5 cents.
--Livingston Parish Council, 1 cent.
--Livingston Parish School Board general fund, 1 cent; School Bond second tax, 1 cent; School Board District 1, half-cent.
--Livingston Parish sheriff’s Law Enforcement District. half-cent.
--Livingston Parish Gravity Drainage District 1, half-cent.
--State of Louisiana, 4 cents.
If the district’s 2017-18 revenue had gone to these agencies, they would have received:
--City of Denham Springs, $922,000.
--Livingston Parish Council, $614,710.
--Livingston Parish School Board general fund, $614,710; School Bond second tax, $614,710; School Board District 1, $307,350.
--Livingston Parish Sheriff’s Law Enforcement District. $307,350.
--Livingston Parish Gravity Drainage District 1, $307,350.
--State of Louisiana, $2,458,840.
While the audit is facts and figures, the totals reflect the recovery from the Great Flood of 2016 and how businesses now view Livingston Parish as an investment site.
“You look at what we’ve been through and it speaks volumes of our business community,” Landry said.
The mayor cited the work of developer Nick Xiao as an example. Xiao built a three-store building, opening his Takumi Hibachi and Sushi restaurant, while renting out the other two spaces.
Another development is underway near Takumi that could bring up to three more businesses, Landry said.
Xiao and his brother, Alex, have also revived the Livington Square Shopping Center on South Range Avenue with the Airborne Extreme trampoline park and last week’s opening of the Sweet Rolls shop.
Businesses also can see the efforts underway to reduce the risk of the type of flooding seen in 2016.
“We’ve seen our federal partners taking a proactive approach, the Comite project for example, and the governor has taken an interest in regional drainage issues,” Landry said.
“Looking at the city in 10 years, real estate prices will skyrocket,” the mayor predicted, while the quality of homes being renovated or built will attract more residents.
The outcome of the audit also was good news.
“Everything was spotless,” Landry said of the audit.
Sanders said his firm offered a “clean, unmodified opinion,” of its audit, indicating no problems were found
“That’s the most important paragraph,” he said.
“During our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses,’ the audit said in its closing section. “The results of our tests disclosed no instances of noncompliance.”
“Everything is clean. There are no issues,” Sanders said.