DEVELOPERS EYEING the Robert E. Lee building in downtown Jackson will have to wait another year to see if they’ll have a chance to redevelop it.

Despite some support to see it approved, state lawmakers are not going to consider a bill to privatize the facility and put it back on the capital city’s tax roll.

“We didn’t expect it to pass this year, because we hadn’t done our homework,” said Ben Allen, president of Downtown Jackson Partners. Allen supports privatizing the historic 14-story building and said a number of builders would like to restore it.

However, state officials said they need more information on how it would benefit Jackson before they’ll consider putting it up for sale.

District 65 Rep. Mary Coleman, chair of the House of Representatives Public Properties Committee, the committee that handles all state-owned properties, said she won’t bring it up for a vote this year, because she doesn’t have enough information on it.

“We don’t know who has an interest in buying it and until we have more information, we’re not going to introduce a bill just to sell a building,” she said.

District 66 Rep. Cecil Brown would also like to see how the bill would benefit the city. “If they (the supporters of the bill) can demonstrate how it would be in the city’s best interest, I’d consider it,” he said, “but otherwise, I’m not interested.”

ALTHOUGH selling the building would put another property back on the city’s tax roll, it would also be counterproductive for the state. “I don’t see how we can sell one building, when the state purchased three buildings the year before last,” he said.

The building is located at the corner of Lamar and Griffith streets, and houses Mississippi Information Technology Services (ITS) and the state’s mental health department. A new facility is under construction on Lakeland Drive to house ITS.

Allen said it is located about 100 yards west of the Marriot Hotel and would be a perfect spot for a mixed-use development similar to the King Edward redevelopment project, with hotel rooms on the bottom and apartments on the upper floors.

ITS spokeswoman Michelle Blocker said the two $27.5 million facilities are expected to be completed in October 2009. The first building, the one set aside for ITS employees, is 46,000 square feet and three stories tall and can be seen from Lakeland.

The second building, which will serve as the state’s data center, will be two stories and 28,000 square feet once completed. ITS provides information technology services to all state agencies and institutions of higher learning.

While the facility will provide the department with a much-needed upgrade from the Robert E. Lee Building, a former hotel that caught fire when crews tried to renovate it for ITS, the building will provide an added burden for the city of Jackson.

ALLEN SAID Jackson State University is now working on a study showing the impact tax-exempt property has on the city. He said the city loses about $8 million a year as a result of lost property taxes to state, federal and other tax-exempt property.

“That’s how much money they would generate if they were privately owned,” Allen said. The school’s department of Government and Public Safety took the average cost per square foot of buildings downtown and estimated it to be $1.41.

In the last 11 years, the number of tax-exempt properties has increased exponentially in the downtown area, from 4,417 in 1996 to 6,390 in 2007. The study shows the greatest increase in the number of tax-exempt facilities coming from the state.

The state increased the number of buildings it owned from 804 to 1,840. The number of federal buildings nearly tripled, going from 60 to 171. And the number of nonprofit agencies like churches, increased from 179 in 1996 to 314 in 2007.

“It’s incredible the effect that these tax-free properties have had on the city,” Allen said. Although Jackson receives no property tax from the facilities, it still bears the burden of providing municipal services like water, fire and police protection.

To compound matters, the city’s sales tax revenue has dropped $2 million in the past 10 years, from $37 million to $35 million this year. Allen isn’t asking the state to pay for the services the city provides, but said the city has asked the state for help.

IN YEARS past, the Mississippi Legislature has rejected several proposals backed by the Jackson delegation and City Council to implement a Payment in Lieu of Taxes program to recover some of the millions in lost revenue from the state.

He also said the city is seeking assistance from the state to repave North State and other former state-owned thoroughfares. The city, in the 1960s or 70s, took over maintenance on those streets for a one-time repaving from the state - a bad deal according to Allen.

“They have to understand that the capital city is broke,” he said. “We will be unless they look at these long-range issues.” To address those issues, Allen said DJP will again lobby to have the Robert E. Lee building privatized and sold in 2010.

Next year, he said DJP plans to present several soft proposals from developers about redeveloping the property. He said several area builders, including Carlton Brown, Ted Duckworth, and the Mattiace Co., have all shown interest.

“We could get historic tax credits and new market credits to build it,” he said. “It could be beautiful.”