Planned TIF raises concerns
By Jeremy Peppas / Staff Writer/ jpeppas@nlrtimes.com
Wednesday, December 31, 2008 11:12 AM CST
Editors’ note
The City Council’s decision on the proposed development downtown was too late for this week’s edition and for complete coverage, check online at
www.nlrtimes.com and next week’s paper.
In 2005, state Sen. Jim Argue was a lonely voice.
Argue, who leaves office Jan. 1 after being term-limited, was opposed to House Bill 2735.
The bill was for Tax Increment Finance districts of TIFs. At the time Argue said it was a “Trojan Horse” and that it would take money away state money for schools.
Argue’s opinion on TIFs hasn’t changed.
“From what I’ve seen, I think the school there has a legitimate reason for concern,” Argue said. “What North Little Rock is doing is taking an existing property, one that was built without public financing and using that to fund another development. That doesn’t seem right to me.”
Of concern to Argue was the amount of money the local school district would get in a TIF.
“The one element I was looking for, they satisfied. They are not making any effort to invade the 25 mills that have been set aside for the schools.”
The school has said they would lose 6.6 mills of tax and the school board has hired an attorney to protest the plan.
The 2005 bill was sponsored by then state Rep. Dustin McDaniel, who now serves as attorney general.
McDaniel said, through a spokesman, that he opposes non-contiguous districts and “the basis for North Little Rock’s efforts, and how they are permissible under the act, is something neither the [attorney general] personally, not his office, have studied in detail.”
The spokesman then added, “The attorney general is not in a position to comment on whether those efforts are consistent with the law.”
The TIF question comes up as North Little Rock has proposed taking three existing downtown TIF districts and connecting them through city streets for a proposed 12-story hotel and convention center at the corner of Second and Maple streets.
The hotel would have 130 rooms, with 25,000 square feet of convention space and 15,000 square feet of retail.
As a comparison, the Embassy Suites in west Little Rock has 14,000 square feet of meeting space.
Developer John Gaudin has said the retail would be split into at least two lots, and possibly more.
Gaudin’s plan said the project would create 350 new jobs.
“That seems a little high to me,” said Joseph A. McInerney, president and CEO of American Hotel and Lodging Association in Washington.
“You could have close to 300 with that, so 350 is a little high, but not by that much,” McInerney. “It all depends on how they market the meeting space and how they divide up the retail space. If they aggressively market themselves for conventions, meetings and not just weddings and balls, they would need a good-sized staff. The hotel would be around 100, and with everything else, you could get to 300 pretty quick.”
The area is the site of the old Rye Furniture building and is already a TIF. It would be connected to Argenta Place, an existing TIF, about one block away. And the other TIF is the Enclave Apartments.
Getting the proposed, expanded TIF approved is a priority.
“We have to get this down by Dec. 31,” said North Little Rock mayor Patrick Hays. “On Jan. 1, the Enclave goes into the books at the new value, so we need to have the TIF done before then.”
TIFs work on the difference between the old assessed value of the property and the new assessed value of the property. The Enclave is currently valued at a little more than $2.3 million and the new value goes to $39 million in a study conducted by the University of Arkansas at Little Rock.
The UALR study said the Enclave, at the new value, would generate $449,420 in taxes, and with the proposed TIF the bulk of which would still go to the state, and 25 mills of which would go the North Little Rock School District.
