Sketch of hotel from North Beach perspective.

A Bay businessman is set to build a beachfront boutique style hotel in a former popular downtown Bay St Louis location.

At Tuesday's Bay St. Louis City Council Meeting, attorney P.J. Mauffray asked city leaders for their support for a local developer's plan to build a multi-million dollar hotel.

Cure Land Company is the owner and potential developer of an upscale hotel set to be built on the corner of Main Street and Beach Blvd at the site of the former Magnolia Place shopping mall, which was destroyed in Hurricane Katrina.

The four-story hotel will feature 59 luxury rooms and have a 5,500-square-foot lower level with ground floor retail space, Mauffray said. The hotel itself will not offer food and beverages, Mauffray told councilmen. The hope is to lease that space to a variety of restaurants, bars, and other shop owners, he said.

The luxury rooms and suites, Mauffray said, will feature beachfront and harbor-view balconies, a pool and other amenities. Two offsite parking lots will be within walking distance of the hotel's location, he said. Additional parking will also be nearby and available in the downtown area.

Developers look to make the project happen by participating in the Mississippi Tourism Rebate Plan and taking advantage of funds available through the MDA program.

In order for a developer to participate in the program and take advantage of its incentives, the development must be of a new tourism-oriented project in the state. Incentives from the rebate plan include a refund of a percentage of sales tax paid by customers of the hotel, minus 11.25 percent educational sales tax and county hotel and motel tax.

If eligible, the developer will be reimbursed for some costs incurred during the project's development and construction. MDA will establish eligibility and certify the applicant with local government approval of the reimbursement. The developer would then recoup the amount of taxes on an annual basis for 15 years or until 30 percent of the total project cost is recovered, whatever comes first.

One type of tourism project that qualifies is a full-service hotel with amenities. The hotel must have a minimum of 25 guest rooms or suites with an average cost of $200,000 per room, amenities such as restaurants, spas and others, and at private cost of at least $15 million, which the developer says his project meets.

The hotel is expected to remain locally owned and operated, which the developers say will help provide jobs to people in the community and help to boom business for the local economy.

Developers plan to start building in late October or early November if city leaders approve the resolution currently being drafted. Officials plan to discuss and vote on the issue at the next city council meeting. The public is invited to speak on the subject.

Ward 4 Councilman Larry Smith said,“I see this as a tremendous economic engine in the downtown area, with a plethora of jobs and tax benefits coming to the city because of this. All of those people are gonna wanna eat and shop, so we are really excited about this program."

In other action:

• City attorney Heather Smith informed the council of pending litigation matters that needed to be resolved immediately. Smith gave each council member an information package which included details of a lawsuit where suspected drug money had been seized from an individual during an arrest, but a judge had ordered it must be paid back.

“Is this part of the FBI (police) investigation fund?” Mayor Mike Favre asked Smith.

“It is, which is why I don't want to go into details on this now,” Smith said. “We can go into an executive session if you need a few to discuss the backstory.”

“Even though this is still under investigation, do you think she (the judge) would order this payment back?” Favre asked.

“Yes. … Do y'all want to go into executive session,” Smith asked.

Smith noted that just because the case was a part of an ongoing investigation does not mean that the city can't pay back the money.

Councilman Jeffrey Reed said to Smith,”If we seized the funds, then the funds must be somewhere.”

Officials then went behind closed doors, where, apparently, more details were discussed.

After returning from the executive session, the council voted to return the money, based on a circuit court ruling by Judge Lisa Dodson. Dodson ruled on March 12 that the city must return $2,820 to Elijah White, III.

The money will be repaid from the city's reserve fund. The council directed Smith to pursue a bond from a former police officer -- who was not named in the meeting due to the ongoing investigation -- in order to recoup the money.

The meeting was recessed until Tuesday at 5:30 p.m. at city hall.

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