Ocean Springs Gave Away a $9 Million Garage to a Private Company, City Access at Risk

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OCEAN SPRINGS, MS — Ocean Springs promised residents a publicly owned downtown parking garage. What they got instead is a taxpayer-funded building that can be mortgaged, sold, or even lost in foreclosure — and the company the City partnered with to get the grant no longer exists.

In 2020, city officials partnered with a private company to apply for $8.75 million from the state’s Gulf Coast Restoration Fund (GCRF) to build the garage. The application was clear. On page three, it states:

“OHOS Land, LLC has entered into an agreement in which it will transfer ownership of the parking garage and amenities to the City upon completing construction.”

That promise helped win the grant for the City and its partner. The Mississippi Development Authority confirmed this week that same 10-page application guided the scoring, legislative approval, and the governor’s signature.

But soon after the funding was awarded, City Hall quietly rewrote the plan.

The “Reworked” Deal

On August 17, 2021, one month after taking office, Mayor Kenny Holloway told the Board of Aldermen the deal had been “reworked.”

Instead of owning the garage, the city would now lease it from the developer, while still paying nearly all the costs associated with it.

Attorney Erich Nichols, representing OHOS Land, LLC, pitched it as a win-win. Alderman Ken Papania, after meeting with developer Joe Cloyd, told the Board it was “a good deal.”

The Board approved the new agreement unanimously.

With one vote, the city gave up ownership of a nearly $9 million public structure — and agreed to pay to maintain it.

Major Red Flag Clause in the Lease Agreement

Under the 2021 memorandum of understanding (MOU), the city would pay $1 per year in rent, while also covering insurance, maintenance, and security, plus most utilities and taxes if exemptions expire. That MOU is still the active agreement in place between Ocean Springs and the company.

In 2025, city officials introduced a new lease agreement that went even further — adding a dangerous clause that could cost Ocean Springs the garage entirely.

A One-Way Street to Losing the Parking Garage for Good

The new lease states that the City’s rights are subordinate to any mortgage on the property.

In plain English, that means:

• The developer can use the garage as collateral for private loans.
• If they default, the lender can foreclose.
• If that happens, the City’s lease and all its rights disappear.
• Any new owner could then charge for parking, limit access, or even tear the structure down.

There is no evidence of a non-disturbance clause, meaning there is no language protecting the City’s access after foreclosure. That omission is not only rare for a public-private lease, it’s seemingly reckless.

And here’s the kicker: multiple city officials told GC Wire they believe the developers have already mortgaged the garage to fund other business ventures connected to the larger hotel and restaurant project at 1515 Government Street. GC Wire has not yet independently confirmed this new information.

If true, that means this isn’t a theoretical risk. The public’s $9 million garage is already being used as collateral in private financing deals. One bad loan could wipe away the City’s rights today, not someday.

Bottom line: taxpayers built the garage, but they don’t own it, don’t control it, and could lose it overnight.

The addition of the subordination clause only benefits the property owner, allowing them to access large sums of money by using the garage as collateral. Ocean Springs only gains a new risk.

The switch from ownership to leasing, along with the lease agreement’s new subordination clause makes all the changes a one sided deal with no foreseeable benefits to residents.

Why Did the City Hand Over the Garage?

City Hall did not respond to questions about why the City decided it no longer wanted to accept ownership of the property or why the subordination clause was added when it did not appear in previous agreements.

Adding to the confusion, the company Ocean Springs partnered with to get the grant — doesn’t exist anymore. The still effective MOU lists the City’s agreement is with OHOS Land LLC and OHOS Development LLC, however, only OHOS Land was on the grant application.

According to the Secretary of State’s Office, that company was dissolved in 2024. Legally speaking, it’s dead.

A Promise and a Partner — Both Gone Missing

Ocean Springs promised residents ownership of a public downtown garage. What they have now is a taxpayer-funded building under private control — tied to a dissolved company name in the original deal and a different company name in later state paperwork — and a proposed lease that could erase the City’s rights with one foreclosure.

Ocean Springs may have handed over nearly nine million taxpayer dollars — and practical control — in a deal that lets the City pay the bills while holding none of the power.

(Editor’s Note: GC Wire initially reported the 2021 MOU was only between the City and OHOS Land, LLC. At 10:54 a.m. on Nov. 6, 2025, this was corrected to reflect that the executed MOU lists both OHOS Land, LLC and OHOS Development, LLC. GC Wire continues to seek any Board-approved assignment/novation and an executed MOU solely with OHOS Development, LLC.)