Councilman: Deal in works to annex mall

Costco Wholesale, Celtic Studios and SAIF Credit Union want to officially join the city of Baton Rouge — and a Metro Councilman says the Mall of Louisiana may not be far behind.

Costco, Celtic and SAIF straddle the border separating the city and the proposed city of St. George, which is an unincorporated part of the parish.

Each of the three properties’s owners have petitioned to fully join Baton Rouge, which would slightly expand the city’s boundaries. The Metro Council is set to approve those annexations at its April 23 meeting.

Meanwhile, Baton Rouge Metro Councilman Ryan Heck said late Thursday afternoon he’s learned the Mayor’s Office is also close to securing a petition for annexation from the Mall of Louisiana and properties that currently separate the mall from the city limits.

The mall, which is located in Heck’s district, is one of the most important sales tax revenue generators in the parish. If the mall is annexed by the city, it could prove a mortal blow to efforts to form a new city of St. George.

Annexation is one of the tools in Baton Rouge’s arsenal to combat the proposed St. George, which threatens to divert millions of dollars from the city-parish budget.

The budgets for both Baton Rouge and St. George rely heavily on sales tax dollars, so the location of businesses and retailers would affect each city’s proposed budget.

Heck said he is concerned about the financial impact that annexation would have on the St. George Fire Protection District. If the mall is annexed, it would be serviced by the Baton Rouge Police Department and the Baton Rouge Fire Department, and the St. George Fire Protection district would lose the property taxes generated by the retail campus.

“Why we keep one upping each other, instead of identifying the root causes to our problems and working together, is beyond me,” Heck said.

Mall management could not immediately be reached for comment.

Costco, Celtic and SAIF initiated the annexation process because of a concern about instability associated with the possibility of being in St. George, according to William Daniel, chief administrative officer for Mayor-President Kip Holden.

“They are satisfied with city services and want to be a part of the city,” Daniel said. “There’s some uncertainty right now being in an unincorporated part of the parish.”

Daniel said he couldn’t confirm whether the mall was planning to petition for annexation. “I don’t know how Ryan could know,” he added.

The city’s police and fire departments, which now will protect the properties that have petitioned for annexation — Costco, Celtic and SAIF — confirmed that those annexations would not increase operational or capital costs, Daniel said.

While the three businesses may not have a significant impact on sales taxes, speculation has swirled that Baton Rouge leaders are clearing paths to reach more-important tax generators, such as the Mall of Louisiana, Perkins Rowe and the L’Auberge Casino.

Only properties adjacent to the city line can be annexed.

Annexations are generally initiated by a petition of the landowners. With larger swaths of land, state law permits annexation to be decided by an election called by a municipality after a petition of the landowners.

Baton Rouge officials acknowledged in February they were in talks with Costco, Celtic and LSU about possible annexations, stemming from concerns about St. George.

Daniel said the city is still in talks with LSU about annexing university-owned property that lie outside the city limits.

Daniel said he wouldn’t speculate whether additional businesses or property owners plan to petition for annexation, nor would he talk about whether the city-parish was actively trying to annex larger revenue generators like the Mall of Louisiana in an effort to protect the city-parish budget from St. George.

“We are looking at a number of different things related to the St. George annexation and how it will affect the city-parish,” Daniel said.

“We’re not specifically out there on a daily basis trying to undermine their right to incorporate, but if a business comes to us and indicates a willingness to be in the city, we’re trying to accommodate them.”

The three businesses requesting annexation will not hurt the proposed St. George budget, said Lionel Rainey, a St. George spokesman.

“We know it’s within their rights to be annexed should they so choose, and we respect that,” Rainey said. “We just ask that same respect be granted toward the citizens trying to incorporate.”

He noted that businesses and property owners annexed into the city pay higher property taxes because of the 10.6-mill CATS property tax.

However, Daniel said they pay lower insurance rates because they are in the Baton Rouge Fire District coverage area, which is the top-rated district in the parish.

Rainey said it would be disappointing if Baton Rouge officials were strategically attempting to annex large businesses important to St. George’s budget.

“It would be very telling if they were working to annex the major revenue generators instead of trying to address the legitimate concerns of people in the unincorporated parts of the parish,” Rainey said. “It probably would prove our case.”

Patrick Mulhearn, head of Celtic Studios, has previously said Celtic mulled annexation for months — even before the St. George initiative — because its property is divided by the city line.

“It just makes sense to be a part of the city. We tout ourselves as being in the heart of Baton Rouge,” Mulhearn said in December. “As far as taxes, it’s tough to say what will happen if you’re in St. George. We’d rather deal with the known than the unknown.”

Representatives from Costco, which is opening April 25, and the credit union could not be reached for comment Thursday.

St. George leaders are trying to collect 18,000 signatures on a petition to put the city proposal to a vote. The organizers have declined to disclose their signature counts; however, they said in January that they had about 10,000.

Critics of the proposed city say St. George threatens to hurt the city-parish economy by creating a $53 million budget deficit from the diverted sales taxes. St. George organizers say the deficit would be closer to $14 million.