NATCHEZ — An outcry from Natchez residents on the proposed development of two historic properties Tuesday resulted in city leaders taking a step back from any action.

The Natchez Board of Aldermen was expected to discuss the potential development and repurposing of the Margaret Martin Performing Arts Center and former Natchez General Hospital by the Brownstone Group, which uses state and federal credits to fund the renovation of abandoned or aging properties.

The group expressed interest to the city in converting the former Margaret Martin School into a family development and the former hospital into a senior development.

In order for the group to apply for the credits for the development of Margaret Martin, the property must be rezoned from special use district (SUD) to R4 multi-family residential.

Board members were expected to give Community Development Director James Johnston permission Monday to take the matter before the Natchez Preservation Commission for rezoning.

As conversations of the topic began Tuesday during the city board’s monthly meeting, Mayor Butch Brown quickly noted the board would not be taking any action on the matter.

“We had a lot of input (Tuesday) from the impacted general public, and we were never going to do anything that lead to any angst, but even what was being discussed at this point was causing a lot of discussion and concern,” Brown said. “We want to give everyone a chance to be heard, but at the same time we have to keep moving in terms of what to do with this building.”

When the topic was continually brought up throughout the meeting, Brown repeatedly told board members and those in the audience the city was in no position to continue owning and operating the building.

“It’s a big building with lots of problems, and we can’t just keep throwing money at it,” Brown said. “It’s not something we can afford.”

Dunleith General Manager John Holyoak spoke against the proposed development at Margaret Martin saying Dunleith owner Mike Worley had purchased surrounding property around the former school and the proposed development would not mesh well with their plans for the area.

Holyoak said Dunleith’s plans have yet to be highly publicized, but their development would include high-end retirement properties that would appeal to a “snowbird” crowd, or those who visit the South in the winter to get away from cold weather in the North.

“The challenge with the original proposal…they can’t coexist with each other,” Holyoak said. “Lower-income housing and the housing we’re proposing would not work.”

Brown and Johnston clarified multiple times throughout the meeting that the proposed developments by Brownstone are not low-income.

Both proposed developments are Section 42 developments and require tenants to meet certain income requirements. The projects are not Section 8 developments, which is a government-subsidized rental program.

“This is not Section 8 housing — it’s affordable housing,” Brown said. “Those are two very different things.”

Adams County Supervisor David Carter spoke to the board saying the county had once looked into Section 42 developments in the past and had been in touch with other counties throughout the state who spoke negatively about the developments.

Carter said other counties reported the amount that municipalities can tax Section 42 developments because of federal guidelines is significantly less than any other residential developments.

“In Hancock County, they had one project over $15 million, and they were able to tax them less than $1 million,” Carter said. “Rankin County has passed amendments to stop Section 42 housing.”

Carter said he knew the decision would ultimately be up to the city leaders, but asked them to consider going into an agreement with the county to prevent such developments all together.

“Not only on this project, but we need to look at eliminating them from here like many other counties have done,” Carter said. “Let’s not fall into the same problems they have.

“They all agree they’re good looking housing, but the longer term financial impact has been detrimental to them.”

Several board members brought the issue back up later once Carter and other members of the public had left the meeting, saying they felt housing of any kind was an absolute necessity for the city.

“Some of us are desensitized to a certain extent, because I see it everyday with people who come in and say, ‘I’m going to leave. I’m going to the coast because I don’t have a good place to live,’” Alderman Tony Fields said. “But what really kind of gets me about it is that every time something like this comes up you hear, ‘We like it. It’s a good concept, but not in my neighborhood.’

“If we had the space, I would take it.”

Alderwoman Joyce Arceneaux-Mathis said she didn’t appreciate hearing from members of county government on development projects within the city.

“I was sitting here seething,” said Arceneaux-Mathis about Carter’s discussion. “I’m not going to be chastised by a member of the Board of Supervisors.”

The matter eventually came to a close with Johnston saying he would speak to the Brownstone group this week to see if they were still interested in moving forward first with the Natchez General Hospital development.

The former hospital doesn’t need to be rezoned for the development Brownstone has planned.

On Margaret Martin, Brown said two investors — one in state and one out of state — reached out to him Tuesday morning also expressing interest in the building.

Brown said the city would delay any process of rezoning until a later date, saying he also wanted to give members of the Festival of Music a chance to secure funding through the Legislature that could possibly pay for renovations to the building.

NFM board member and former Democratic Sen. Bob Dearing pushed for $6 million in funding from the Legislature last year, but that funding was removed from a large spending bill at the last minute.

Dearing told board members Tuesday he was already planning a revival of the request for the upcoming session and felt confident it would be considered.