Costco in Ridgeland blocked by state Supreme Court

Ridgeland city officials had called a proposed Costco development "Project Santa Claus," but the state Supreme Court delivered a lump of coal Thursday.

The court, siding with neighborhood advocates, ruled that the city of Ridgeland engaged in illegal zoning practices to accommodate a Costco shopping center.

Ridgeland amended its existing zoning ordinance "substantially" to allow Costco to move in and did so without showing a substantial change in neighborhood character to justify the action, the court concluded.

The court also ruled the zoning amendments made by the Ridgeland Board of Aldermen constitute illegal spot-zoning as well because the amendments "were entirely designed to suit Costco." Spot zoning is the rezoning of a specific area within a larger zoned area that is usually at odds with a city's master plan and zoning restrictions.

Ridgeland Mayor Gene McGee and developer Andrew Mattiace, who was tasked with overseeing the Costco development, could not be reached immediately for comment.

Emails between city officials and company representatives showed an eagerness to bend the rules to suit Costco and amend the city's ordinance to allow a fueling station at the proposed development site.

City officials had nicknamed the proposed development "Project Santa Claus" to keep it confidential, and McGee told the news media that rumors of a Costco development were untrue, even after an article in the Clarion-Ledger stated Costco had posted job openings for a Ridgeland location.

Ridgeland adopted a comprehensive zoning ordinance and map in February 2014.

About six months later, the city submitted six potential sites along Interstate 55 for Costco to consider developing. A company consultant selected a 45-acre tract along the east side of Highland Colony Parkway, south of Old Agency Road.

In November 2014, Alan Hart, the city's director of community development, told a Costco representative in an email that the city's zoning ordinance could be amended to accommodate a fuel facility in "less than 60 days and could be done in as few as 30 days." Also that month, McGee sent an email to Costco's local real estate agent, Dan Venable, stating the mayor's staff "will bend over backwards to assist" Venable with his needs, according to court documents.

In June 2015, the city adopted the zoning ordinance changes, and at an April 5, 2016, meeting, aldermen voted 4 to 3 to amend the ordinance.

Soon after, a collection of neighborhood advocates appealed the city's decision in Madison County Circuit Court. The court affirmed the zoning amendments and found no rezoning had occurred.

But on Thursday, the high court overruled the Circuit Court decision, concluding the court erred in finding that the Costco amendments were not arbitrary and capricious.

The future of what was to be Phase II of the Township Renaissance at Colony Park is now uncertain.

Even before Circuit Judge John Emfinger tossed the residents' lawsuit, the mayor and Board of Aldermen had moved ahead with a financing plan that includes Costco. In October 2016, the board approved a tax increment financing plan for the Township, Renaissance Phase II and Renaissance Phase III, which includes the Costco development.

The council approved $11 million in TIFs for Renaissance Phase II and the Township and $12 million for Renaissance Phase III.

TIF bonds are a financing option that allows counties and municipalities to borrow money to fund an economic development project based on the taxes the project would generate in the future with future tax proceeds paying off the debt.