Seized tobacco assets eyed for PAL expansion

By Emily Le Coz/NEMS Daily Journal

TUPELO – The fate of a nearly $1 million proposal to move Tupelo’s Police Athletic League into the old Salvation Army gym could rest in the hands of the federal government.
Tupelo Mayor Jack Reed Jr. said he hopes to finance the project with funds seized by the feds in a contraband cigarette sting two years ago. The city’s entitled to some of the money because of its involvement in the ongoing investigation, which has swept through several states, including Mississippi.
But details about that funding remain murky and, without it, the project faces opposition by some on the City Council.
In addition to cash, Tupelo is expected to receive a sprawling warehouse at 120 N. Front St., that criminals had used to store illegal cigarettes. The city wants to turn that property into its new police headquarters and use some of the money it gets from the sting toward that project.
Another portion of the money, Reed said, could go toward the PAL project.
During a presentation Tuesday at City Hall, the mayor unveiled plans for the city to purchase the old Salvation Army gym behind the Link Centre for $232,000 and spend an additional $600,000 to renovate it.
The 17,000-square-foot building, which currently sits vacant but formerly housed The Salvation Army’s after-school program, would serve as the new location for PAL and accommodate hundreds of children in a variety of sports.
PAL operates now out of an 8,500-square-foot building on Robert E. Lee Drive and needs a larger facility to meet growing demands, said its director, Police Sgt. Michael Russell.
“We’ve had to turn kids away and we’ve had to turn away community volunteers and officers that want to participate … because we don’t have the facilities,” Russell said. With a new building, “we have the opportunity to reach more kids without it really being any more of a fiscal responsibility to the city.”
It costs Tupelo about $80,000 annually to run the program, with half of it paying for the building’s lease, utilities and maintenance, Russell said. He estimated annual property-related costs would drop by three-fourths in the new building.
But Tupelo doesn’t know when the feds will release the seized assets or exactly how much money it will get out of the deal. It also doesn’t know whether it can use those funds for the PAL project.
According to its agreement with the U.S. government, Tupelo can use seized assets for law enforcement purposes only. Reed said it’s unclear yet whether the PAL program fits within those guidelines but he feels confident it does.
“I got an email from someone in the U.S. Attorney’s Office that it does meet the guidelines, that it’s fine,” Reed said on Thursday. “But I need to check with someone else in the U.S. Justice Department.”
No one in the U.S. Attorney’s Office in Oxford was available to comment on the guidelines Thursday nor could anyone immediately say how much money the city will receive.
Tupelo already has $115,000 in tobacco money from an earlier distribution. It expects to get “a substantial amount” more in the near future, said City Clerk Kim Hanna. She declined to disclose the estimate.
The feds have collected millions of dollars in seized assets from the multi-state scheme during the past two years, but an official dollar amount wasn’t immediately available. Other agencies also are entitled to some of those funds.
If for whatever reason Tupelo can’t access those funds for the PAL project, the mayor said it can use existing revenue in the general fund budget, dip into rainy day reserves, or issue a new bond as part of the city’s five-year capital projects plan.
Hanna said the city will have about $16.6 million in unreserved cash by the start of the next fiscal year on Oct. 1. She said Tupelo was financially able to fund the project.
But at least one City Council member said he’ll reject the plan if the city has to dip into its reserve balance or issue another bond.
“If it means borrowing money or if it means using rainy day funds, then most likely I would be opposed to it,” said Ward 3 Councilman Jim Newell. “If it comes from tobacco funds, you can guarantee I’ll be 100 percent supportive of it.”
Council President Fred Pitts, though, called the project an investment and said he supports it.
The City Council must approve the building’s purchase and the financing before the project can proceed.
emily.lecoz@journalinc.com