Tax Finance

Little Rock School District OFFICE OF THE SUPERINTENDENT August 17, 2001 Letters addressed individually to members of the City of Little Rock Board of Directors The purpose of my letter is to express our concerns about the possible formation of Tax Finance Districts within the City of Little Rock. As you know, I assumed the position of Superintendent of the Little Rock School ii- r'zj I A I* I ' ' ' "'* iumI District h background information, there was nothing in existing files to indicate J' I , - -J -------------- >s.zhitiii^ III VAIQUI ly that any dialogue had taken place between the City and the LRSD with formation of Tax Finance Districts. respect to the This potential area of concern was first brought to my attention by one of my board members, Mr. Baker Kurrus. Mr. Kurrus, in turn, contacted Mr. Cy Carney during the rnonth of July and requested a meeting to gather additional information about the City's plans. This was the initial and only conversation that representatives from the LRSD were engaged in with respect to the possible formation of Tax Finance Districts Our purpose in requesting the meeting was to inform City officials that we wanted to be . . . '' ------ wr.vj WII LI lOL VVC vvailicu lu UC dialogue surrounding this issue. To our dismay, our next information Or^/^IIT Tri/^ rx XO .J X^..________ _ i . ... ___ ' about the proposed tax-zones indicated that the City was scheduled to discuss the five proposed Districts at an agenda meeting on August 14*^. At this juncture, we became quite alarmed, as no one from the LRSD had seen or been a part of any discussion with rooncinT +<- .j r^:_x x_ respect to the proposed Districts. On Tuesday, August 15,1 formally advised Mayor Dailey and City Manager Carney that we have some serious concerns surrounding the formation of the proposed Tax Finance Districts. It is quite evident that the LRSD stands to lose a great deal of revenue if the proposed Tax Finance Districts remain in their present form. 810 West Markham Street Little Rock, Arkansas 72201 (SOI) 324-2012August 17, 2001 Page 2 For your information and perusal, I have listed areas of concern surrounding this issue. The LRSD will lose all potential grotvth revenue as a result of the establishment of these zones for up to a maximum of 25 years. The loss of corresponding revenue will have an impact upon our ability to maintain and meet future costs associated with our desegregation plan and court mandates. The LRSD will also lose state funding as a result of the establishment of these zones. To further explain this phenomenon within our state funding formula, the new property would be a part of our assessed valuation
thus, the state would assume that we are receiving the property tax on the property, which would result in a reduction in our state aid allocation. This results in a double whammy for the school district. For each $1,000,000.00 in increased Incremental Actual Value (growth in actual value of property captured in a Redevelopment District), the LRSD would lose the following: Loss of Property Taxes: $1,000,000.00 .20 200,000.00 X .034 6,800.00 Actual Value of Property Captured Assessment Rate Assessed Value Operation and Dedicated Mills Tax Loss to the LRSD Loss in State Aid: $200,000.00 X .025 5,000.00 Assessed Value Charge Rate .98 4,800.00 Charge Percentage Loss in State Aid to the LRSD Total Loss to the LRSD on $1,000,000.00 6,800.00 4,800.00 11,600.00 Tax Loss Loss in State Aid Total Loss of Annual Revenue on $1,000,000.00 X $ $ $ $ $ XAugust 17, 2001 Page 3 This example grows exponentially when large projects X x. 'J> are considered. For example a project with $100,000,000.00 in actual captured value would result in a loss of totS revenue to the School District of $1,160,000.00 annually. ^'J"as statute talks generally about redevelopment and improvement of blighted areas. Tax Finance Districts used for such redevelopment can be very positive for all concerned. By the same token, I think it is quite evident that the transfer of tax collections from five large Tax Finance Districts would be I rum rive large tax Finance Districts would be more than the LRSD could financially withstand and support, even if the Districts were all proper and all had compelling needs. In summary, we do have serious concerns about the formation of Tax Finance Districts 3n/l thciir ____| r ...... * and their corresponding affect upon the financial well being of the LRSD. I have verbally informed the Mayor and the City Manager that I will not hesitate to recommend to my Board of Directors that interests of the School District. we exercise any and all options to protect the financial Despite the fact that we are on the verge of opening school, __. soon as possible. If you have any questions or need clarification on any"oHhe information contained herein, please do not hesitate to we are available to meet as contact my office. Sincerely, Sincerely, T. Kenneth James, Ed. D. Superintendent of Schools Katherine P. Mitchell, President and on behalf of the Board of Directors Larry Berkley R. Micheal Daugherty H. Baker Kurrus Judy Magness Tony Rose Sue Strickland TKJ/bjg cc: Mayor Jim Dailey Mr. Cy Carney Senator Jim Argue Senator John Riggs Senator Bill Walker Ann Marshall, ODM Mr. Don Stewart Mr. Buddy Sutton Mr. Chris Heller Mr. Clay Pendley Mr. Ray Simon Attorney General Mark Pryor Mr. John Walker, Joshua IntervenorsSchool district brings up concerns as LR discusses new tax-incentive program "s j BY ELISA CROUCH AND KIMBERLY DISHONGH ARKANSAS DEMOCRAT-GAZETTE Little Rock city and school district officials met privately at City Hall on Friday to talk about a voter- approved economic development tax incentive and its potential to stunt school revenues. The 45-minute discussion in the mayors office was prompted by Little Rock School District Superintendent Ken James, who expressed concern earlier this week that the city Board of Directors appeared to be a week away from discussing redevelopment districts without consulting the school district. We need to be actively involved because we are the ones who stand the chance of being the big losers here, James said after the meeting. Mayor Jim Dailey assured James and other school officials that they would be involved. Discussion on proposed boundaries for the redevelopment districts has been dropped from the city boards agenda for Tuesday. Instead, Dailey and city directors will spend time talking in greater depth about how to implement tax increment financing a program that would create five redevelopment districts in the city and provide tax incentives to corporations and businesses that wish to locate there. Summit Mall, the $150 million shopping center planned for west Little Rock, was not part of the discussion, those involved said. The land that mall developer Simon Property Group acquired to build the mall will likely be included in one of the redevelopment zones, said City Director Michael Keck, who didn't attend the meeting. This cotild mean that Summit Mil will qualify for tax increment financing. None of that is on the table at this moment. Dailey said after the meeting. Dailey added that discussions on how the city will use the tax-incentive tool and who will benefit are preliminary and involve broad policy concepts. Numerous cities across the country use tax increment financing to compete for corporations, businesses and improvement projects. The method puts a cap on a developers or businesss property taxes, as improvements the entity makes to the area increases property values. Any extra property tax revenue that would have been paid because of higher property values See INCENTIVES, Page 11A Bl (1 Il 207 g "jfT lrr^7>gr^'3KT4>iK?rvig^^ r- "I?* Arkansas Oemocrat-Gazette/BENJAMIN KRAIN Standing on a Big on Little Rock" rug, Little Rock City Attorney Tom Carpenter (left) talks with Little Rock School District Chief Financial Officer Don Stewart (center) and School Board member Baker Kurrus after city and school officials met Friday to discuss the city's efforts to attract private investment using tax increment financing. K J . /. <li_i T r * f \ I SATURDAY, AUGUST 11.2001 11A I Incentives Continued from Page 1A would be used to pay any bonds or loans taken out to fund the project. As an example, a redevelopment district would allow a developer to repay bonds used to construct an office tower from the increase in the property taxes as the redevelopment raises land values. Voters approved the method in November, when they supported Amendment 1. While city officials see tax increment financing as a valuable instrument in redeveloping deteriorating areas, like midtowns University Avenue corridor, their counterparts at the School District are concerned about repercussions on their end. "I think the redevelopment law has the ability to help school districts in the long term, but it also has the potential to cost districts significant amounts of potential tax revenue, said Chris Heller, attorney for the Little Rock School District. i But Heller stopped short of crit- ' icizing the economic development method. If there is a truly blighted area with a declining tax base and that area is converted into a growing, more commercially viable area, I think the redevelopment law has the ability to help school districts in the long term, but it also has the potential to cost districts significant amounts of potential tax revenue. Chris Heller, attorney for the Little Rock School District that would work to the benefit of all tax entities. For the next several weeks, City Hall officials will be clarifying how to implement tax increment financing, setting boundaries for the redevelopment districts, which will have up to a 25-year life. The city board will hold a public hearing on the district boundaries before approving them. Downtown is one area expected to have its own district, while another is expected to encompass the John Barrow neighborhood in south-central Little Rock. Attorney Jane Dickey, president of the Downtown Partnership, supports the redevelopment district concept, especially for downtown. While we have some redevelopment, we want that to go down Main Street and down Capitol Avenue, said Dickey, who attended Fridays meeting. The School District accounts for 46.4 mills of the citys overall 68.9- mill property tax rate. School officials said they would feel better about the arrangement if they had assurances that theyd be able to increase their revenues within five years or so of when a development's property value increases. If you could develop one of these [tax increment districts] and the revenue from the increased assessment would pay off the infrastructure needs in five years, and then all that money would start coming back to the School District, said Don Stewart, chief financial officer for the district, that might create revenue we never would have gotten had it not been for a tax increment. The longer the tax incentive, the worse it will be for schools, he added. We might be saying uh uh, its not worth it to us. Heller said that without knowing . the specifics of a proposal, its hard to say whether school officials would support it. If theres just a small incremen- , tai benefit, you just have to look at all the factors. What will the rede- velopment accomplish and what potential tax growth and how soon would we see that growth, Heller said. School District officials will watch closely as the city develops tax increment financing but will have no veto power if they dont like the outcome. James said he had met once with Stewart, City Manager Cy Carney and School Board member Baker Kurrus to discuss the citys intent. The tax increment issue is being discussed in the wake of a May 25 order by Pulaski County Chancellor Collins Kilgore directing the state to fix its public education system, which he found to be inadequate, inequitable and in violation of the Ark^sas Constitution. A court has ordered education reform and a lot of politicians have expressed a concern about whether we can afford it, and given that situation you have to look closely at anything you do that can take money from school districts, Heller said. Citys plan likely to cost LR schools i New tax revenues from improvement area containing mall at issue I --------------------- ing more investment in the district, t Rork ritv Micha which includes the economically BY C.S. MURPHY ARKANSAS DEMOCRAT-GAZETTE The Little Rock School District Little Rock City Director Michael will likely miss out on $1.5 million in new property taxes annually if city leaders approve a proposed re- development district that includes land for Summit Mall. Instead, new tax revenues generated from the $150 million west Little Rock megamall could be spent on improving roads and encourag- depressed John Barrow Road. Redevelopment districts, approved by voters last year as Amendment 1, are designed to encourage progress in blitted or otherwise struggling areas by allowing cities to devote new property taxes to improvements in the same area. Theres no surprise that we intend to go forward with this, said Keck. We want to build a strong community so we can grow our city. Thats what tax increment fmanc- ing is all about. Redevelopment money collected can be used for road improvements, community centers and af- fordaljtle housing, said Keck, who represents the area where Summit Mall is to be built. See REDEVELOPMENT, Page 5A Redevelopment Continued from Page 1A But mall opponents, now fighting Summit in court and by petition, are skeptical. They worry that Little Rock will use the money to help mail builder Simon Property Group pay off bonds or pay for the $11 million in road improvements that the company has promised to finance. If the .Summit Mall is to be included in that, I can't think of a strong enough word to describe how inappropriate that would be, said David Couch, an attorney representing competing midtown ra^ I^k Plaza. Couch gathered 20,000 signatures on petitions hoping to put the mall on the ballot. Keck recalled that when city directors approved the project, they said Simon would be responsible for the cost of improving interstate and secondary roads adjacent to the mall. Chy officios have vowed they wont issue building permits until Simon officials have provided assurances that money has been secured to make all the road improvements. Simon officials couldnt be reached for comment Friday or Monday. Little Rock leaders wont do anything without public hearings and full disclosure. Keck promised. But the city board will look at all options for spending redevelopment dollars, he said. Its going to be painfully obvious going forward that Im not going to rule anything out, and Im not going to rule anything in, Keck said. Little Rock City Manager Cy Carney said its unfair to call tax increment financing tax incentives because private developers such as Simon wont get a tax break. There is no difference to the private developer, he said. The only difference is that it goes into a fund that pays for improvements. That money can be on the table for purposes of redeveloping the plan for needs in the area. Anything can happen as far as the needs of the area. Keck joked that he thinks some have gotten the word increment confused with incentive. Little Rock School District officials met with city officials late last week to express their concerns about the redevelopment districts. School officials arent spoiling for a fight, said school Finance Director Don Stewart, but there is some concern that diverting too much money away from the school district could violate a desegregation settlement plan. Under the 1989 settlement to a de- segregation lawsuit mvohdng the state and the three Pulaski County school districts, state law cannot be used to hinder the districts ability to comply with federal desegregation policies, he said. We would need to look closely at that part of the agreement, he said. Including the Summit Mall site in a tax increment district is selfish on the citys part, Carney said. If that development can be included, that would be added to the tax book. All of that additional value would be captured by the fund to do improvements. Its likely that money going into a tax fund for a district that includes Summit Mall would go into the $70 million in infrastructure needs that have been identified in west Little Rock, Carney said. Fdr instance, if Kanis [Road] could just be redeveloped, there would be a big amount of growth out there, he said. But nothing will happen until the road is improved. Little Rock leaders deflected criticism that the city is considering diverting taxes away from the schools to aid a thriving part of the city where developers have already committed to build the $150 million Summit Mall. When pushing for the adoption of redevelopment districts, proponents highlighted their ability to revitalize blighted areas. But Little Rock can create redevelopment districts in areas that arent considered blighted, Carney said. The Community Redevelopment Financing Act allows cities and counties to create the districts to eliminate traffic congestion, reduce traffic hazards, eliminate obsolete or other uses detrimental to the public welfare, or otherwise remove or prevent the spread of blight or deterioration. Carney gave the example that if the Little Rock Zoo was included in the same tax district as University Mall, as is proposed, any new property taxes created by the redevelopment of the mall could go to pay off bonds for improvements at the zoo. Each district must have a plan showing how the money would be spent and what project would be first, Carney said. We would get input from citizens on how to spend money in the districts fund. Discussions on proposed boundaries for the redevelopment districts have been dropped from the city boards agenda for today. Carney said Monday, however, that hell brief the Board of Directors on tax increment financing and broadly discuss the five proposed districts. They include the T ittip Rock port area, a portion of southwest Little Rock, midtown, downtown, and an area near the intersection of Shackleford Road and interstate 430, which is where the mall would go. For the next several weeks. City Hall officials will clarify how to implement tax increment financing, setting boundaries for the redevelopment districts, which can be in place for up to 25 years. The city board will hold a public hearing on the district boundaries before approving them and will hold separate hearings for each districts spending plans, Carney said. Don Zimmerman, executive director of Arkansas Municipal League, said cities can also use tax increment financing to help developers pay off bonds for projects. But unless a districts plan calls for it, Carney said, new tax revenues wont go to schools as they do normally. All of the existing money and the existing base is all there, he said. There is no taking away money from the school district. Carney said the five proposed districts cover 5 percent to 7 percent of the city, so Little Rock schools will still collected new property taxes on the majority of property. The Arkansas Education Association endorsed Amendment 1, and 1 there was no notable opposition to redevelopment districts when it was before the Legislature in 1999. T suspect that people in the school district werent looking closely at the amendment to know what would happen, Slewart said. Stewarts attention was triggered during the most recent Gener^ Assembly session when legislators approved Act 1197 of 2001 to enact the voter-approved Amendment 1. Even before they could establish tax increment districts, Little Rock leaders helped companies such as Acxiom temporarily avoid paying property taxes, Stewart said. That company doesnt have to pay property taxes on a $35 million project now under way downtown because the city, which is tax-exempt, owns the land under the building, Carney explained. He said that type of tax incentive is rarely used in Little Rock. Because of that, the schools woni soon benefit from Acxioms new building, Stewart said. "It slipped up on the schools anc it was too late to do anything abou it, Stewart said. Theres been a lopj history of conflict between the dis trict and taxing agencies. I dont think anybody at the schoo district is saying there shouldnt bi tax-exempt financing, he said. "Wen just saying we need to be involved and we need to know whats going oi since we stand to lose the greatest." > c w c w o oWednesday, August 15, 2001 LR mayor opposes diverting mall taxes Cant abide hurting schools, Dailey says BY ELISA CROUCH ARKANSAS DEMOCRAT-GAZETTE Little Rock Mayor Jim Dailey said Tuesday that he would oppose a plan to include land for the proposed Summit Mall in a west Little Rock redevelopment district being considered by city management. Dailey stated his position Tuesday night as the Little Rock Board of Directors discussed implementing tax increment financing an economic development tool that some fear wiU stunt revenue growth for the Little Rock School District. I cant support the Summit Mall being part of this, Dailey said, later adding
Its just hard for me to take away money from the [School] District. Dailey armounced his decision after a reminder from City Direc-tor Larry Jim Dailey west Rock Lichty, who recalled that a I major selling point for the mega-mall planned for Little - was that it would fill School District coffers with hundreds of thousands of dollars in property taxes. ! Inciuding Summit Mali in a redevelopment district would mean the new property taxes generated by the project would be directed to area improvements, such as community centers, affordable , housing or infrastructure but not the School District. I just have a real problem with that, Dailey said. And I have to lay that out on the table for the board and the public. Dailey has supported building the $150 million mall in the past, but not with his vote. He recuses himself from Summit Mall deci- sions and most discussions because his brother-in-law, property manager Hank Kelley, has ties to the project. Last week, Dailey and School I District officials met privately about tax increment financing, which Arkansas voters approved last November as Amendment 1. The mechanism encourages redevelopment in blighted or otherwise struggling areas by setting up redevelopment districts. Developers and corporations who build within them can devote new tax revenue, or the increment, to improving the area. In coming weeks, the city board will determine the boundaries of the redevelopment districts, and whether Summit Mall is included in one. A preliminary map shows a redevelopment district encompassing the Summit Mall land and the John Barrow neighborhood. City Director Michael Keck said See MALL, Page 3B Mall Continued from Page 1B he likes the plan to include Summit Mall in the redevelopment district planned for west Little Rock. Projects of Summit Malls scope must be included in redevelopment districts, Keck said, if city officials hope to make major improvements to the areas. Were going to have to have a big enough increment of tax revenue to do that, said Keck, who represents west Little Rock and is a staunch supporter of building the mall. Keck added that Daileys statement against including Summit Mall surprised him. I was a little taken aback. It caught me off guard, he said. After the meeting, Don Stewart, chief financial officer for the Little Rock School District, said he was pleased with Daileys statement. We are obviously in a position to agree with him, Stewart said. While theres no solid estimate on how much the schools stand to lose if the city extends tax increment financing to Summit Mall, Stewart said he believes the number would be excessive. But, he said, until [the project is] assessed, theres really no way to determine that number. EDITORIALS MHa will build ArKansas If hrov^ I One step forward... And two back I HERES AN old photograph dirt road in these parts. For a lot of our made famous in these parts by the kids, libraries are the only place outside Arkansas Gazette's Larry Obsitnik of school where they can get their hands (aka The Chief). It shows the 101st Air- on a mouse. Our cash-strapped schools home rolling into Little Rock at the are struggling to provide even the rudi- height of the Central High crisis. It is ments of computerized learning. And night, and the dark hulks of the trucks computer illiteracy can be almost as form ominous silhouettes a^nst the crippling as tlie old kind these days, glare of headlights. Above the incoming Were proud of the voters in Little convoy, a chamber-of-commerce t^e Rock, North Little Rock and Fayetteville, billboard stands in stark, white relief, who came through for their libraries asking: Who will build Arkansas if her and the next generation. They could tell own people do not? the difference between a branch of local o o o n tn s. TJ a o s That question is as valid today as it government that has been straight with was in57. Who will build Arkansas if we themthe Librariesand the kind of wont? Especially if some of us have nev- shell games that Little Rocks city gov- er made the connection between educa- emment likes to play. We thank those tion and economic development. Which voters for their judgment and vision. Just is like missing the connection between as the next generation will one day flipping a switch and having the lights thank them for good jobs, come on. Yes, we all talk giddily of tapping into the new high-tech economy r^t cheer s PEAKING OF cash-strapped schools, some of Little Rocks in Arkansas. We advertise Quality of life! Lakes and rivers ^d moimtainsl Good even more money from Little Rock bunting and Gsbing! Friendly people! schools for, they say, economic develop- But the voices always trail off before get- menL They want to use a good ideareting to what this new economy needs development districtsto develop a mostan educated work force. part of town thats doing just fine on its Maybe thats because sometimes own: West Little Rock Millions in tax theres not a whole lot of that last bit revenue would be siphoned away from wed care to talk about. Not too long ago, public schools that need the money to leaders have found a way to take voters out in Pulaski County turned help Summit Mall, which doesnt. down a tax increase to improve their Is this anybodj^s idea of developing schools. This week, others in the county the local economy? What kind of busi- voted down a tax to improve their libraries. And now? Now Little Rocks board of nesses would relocate to a city without educated workers? directors is talking about siphoning money from the schools to redevelop- ment districtsincluding districts that p( are already developing just fine, thank bi you. Like West Little Rock You know, home of multiplying banks, Chenal Val- Were getting that familiar, sickening sensation that City Halls playing another shell game. Wasn't one of the selling noints for the Summit Mail that it would )ring in more money for schools? Mayor Jim Dailey thinks so. Hes taken a Vai- stand against diverting this money from ley and the future Summit Mall. This is the schools. Good for him, a bitted area?................... The logic at play here says a lot about some of our local visionaries. Namely that their vision aint so good. Its about as loi^-range as Mister Magoos. We can lAKE.THE opposition to the pub- understand how city directors might be lie libraries in Pulaski County distracted by goodies immediately before (please). The aginners voted them. Build a road now. and you can feel down a millage increase to provide the hard pavement Build a burger joint, more books and better Internet services and you can smell the grease. And hear to their part of the county. They said the the tires crunching on the new roads. state should pay for their librarys needs. And the cba-ching of cash registers. Which means the state would have to But build a new school, and the onlv Yes, who will build Arkansas if her own people do not? T raise taxes, and the state would get to spend the money. But not as efficiently as your local librarian. But build a new school, and the only sound you may hear is grumbling over new taxes. Because the immediate return isnt visible. It might take a few A question: Why send your taxes to the state Capitol or Washington when ______ me its your neighborhood you want to help? jobs that pay salaries families can live Folks in Fayetteville understand this. .................. years, inaybe even a generation, but the return is bigger and better the kind of Arcliitects just unveiled a glorious new design for a sun-filled library. And, yes, folks there voted to tax themselves for it. on. The kind of educated work force that attracts investors. Which in the long run means more money for roads and schools and, yes, still more good jobs. Maybe they know a little something Our politicians keep talking about Ar- about economic development. It miglit kansas being a poor stale as if thats an i_ . ,----r.--------- Mvuig a siaic <ia u UldlS ail help explain their bustlmg economy excuse to stay poor. It doesnt have to be an^ts connection to education. that way, and it shouldnt be that way. It This is about more than entertaining doesnt help when our leaders picture kids on hot summer days. Its about edu- Arkansas as some kind of Banana Re- cating mem while theyre young, recep- public to be mined for its cheap labor live and open to the new. They may not and natural resources. realize that computers arent just nifty ' _______ gizmos to play games with in this Inter- are in our schools^ The best kind oYcam netted age but job training. Babysmack ital to develop is human capitab The inwords like Yahoo and Google arc ---------1, die way longer just computer geekspeak: theyre business is done, and Arkansas can eve^day tools m most offices. change with itif our leaders will just get out of the way. The most valuable resources we have are no formation economy is changing the way Yet the information hi^way is still aco August 2 2. 2 0 0 1 o 5'fS':^ g K ' I Ig . q 2S-3ftogsE=q Hg o w ft S w s 5S LJ? T0O f3t 'S- Oc'L<: PG- a < S B g g S is a:: ft ft o w O h- OS Si -r ? " Sb . aS g G.g'o I O s' o 3. 3 E eg S w ft o B fs n P < 3* 3 2 o S bi u C O S f6 K ft ft r* Q->a ?2 w S' 3- 3 ft < ft w ft" CL g ft,ft ^^11 g-g O. S f g S- 3- CT M --i-oq n. o FSdi B bwi s2t 5n4 tzi w'p p B R52 Q 3' w- jx fetx f ? 3 5 rs J? ft , O 3 O' o 2 E 3o .'o3 ogS- 2 2 ft 2.'^ B B gSi S5 fwt> o2 5 c-q o " , 2-TO 5'0" 2_S g 5- I Q P h n n IC 5?*^ Tuesday that his Association on Monday. Associ- WVIIUUIO letter to city officials was in- ation members voiced concerns , tended to make it clear that he about the effect of the develop- Continued from Page 1A has to pursue the best interests ment districts on school fund- Manager Cy Carney, recently of the school system, but he ing but had broader questions, proposed the formation of tax has not directed the school dis- as well. inc^ment financing districts, trict attorneys to prepare any let- Janelle Romandia questioned Authorized by a new constitu- ters or lawsuits against the city why low-income parts of the city tional amendment, the funding c"'*-*'------------ -* -------- * mechanism is meant to encourage redevel-opment of biighted or otherwise struggling areas by setting up development districts. Developers who build within the dis- Carney tricts can devote increases in oyer the proposed development south of 12th Street or south of districts. Roosevelt Road have yet to be I'm all about compromise included in any proposed rede-and working with people, James velopment districts, said. Were hopefill that w--e-- c--a-n- George Blevins, a l. ead- er in sit down and look at this and see the majority black association, how it can become a win-win for agreed that the Wright Avenue everybody involved: neighbor- area should be part of a rede-hoods, schools and the city. We velopment district and that res-all have needs. We have to make idents should identify improve-sure we arent hurting each oth-er. property tax revenues or the James and increment to improving other school sys-streets, housing, utilities and oth- tern employees er infrastructure needs within have said the dis-ments needed in the community. But Blevins also worried that the redevelopment districts as proposed would hurt the school system, which serves a majority black student enrollment. Audience member Lee Hill urged school officials to work for a compromise to share in the income generated by any redevelopment of an area. the district. trict may be able One of the five proposed dis- to support some tricts would include a section of redevelopment burgeoning west Little Rock and districts, partic-the land targeted for the pro- ularly those in blighted areas NoelWashington,anotherau-posed $150 milhon Summit Mall, where property values are de- dience member, warned Mon-which would be the largest mall clining and would not otherwise day that the formation of im-in the state. Some have ques- attract new development, provement districts could result tioned whether the west Little Through redevelopment and im- in the displacement of poor res- Rock zone between Markham provements in the infrastructure, idents to other parts of the city and 36th streets and John Bar- property values could increase in the interest of corporate derow and Bowman roads is a and the school system ultimate- velopment. blighted area as intended in state ly could benefit financially. Association members pre- . Mayor Jim Dailey has said he pared a petition to circulate in City board member Michael would oppose a plan to include the community expressing con- Keck, an advocate for the rede- the land for the Summit Mall cerns about the city's rushed velopment districts, said Tues- in a redevelopment district al- time frame for developing the day that the tone though he supports proposals for development districts and ob-of the letter was districts in downtown Little jecting to the boundaries of the surprisingly Rock, the Little Rock Port and proposed districts. harsh in light of the University Avenue areas. We believe the proposed what was a com- Weve got a lot more dis- boundary lines will not pro-mitment by city cussion to do before any of these vide equitable or equal oppor-leaders to work are adopted, said Dailey, who tunities for development or re-with school dis- also said City Hall staff members development of the known trict officials so and the University of Arkansas blighted areas of the city of Lit-that the redevel- at Little Rock are doing some re- tie Rock, especially Wards 1 and opment efforts search on the operation of the 2, the petition says. The peti-will benefit both the city and development districts in other tion fiirfiter asks that the process school district. states. for forming the zones be slowed 'Many of the things we are James and school board mem- so as to give residents the op-t^ mg about doing are going to ber Baker Kurrus have worked portunity to participate in de-be a tremendous benefit to the to get the word out about the ciding what the boundaries school district, whether its in- possible effect of the develop- should be. i frastructure improvements or ment districts on the school sys- I whether its improved housing tern. opportunities in the city or his- The superintendents letter to tone preservation all of which city board members was copied will make it possible for people and sent to state Attorney Cento live in Little Rock and go to eral Mark Pryor, state Depart- Little Rock schools, Keck said, ment of Education Director Ray Keck said he would like to es- Simon, and the executive di-tablish the boundaries for the rector of a state organization of improvement districts by the school district superintendents, first of October and then begin Other copies were sent to attor-planning with all the con- neys representing the school sys-stituents, including the school tern and black students in an on-district and business commu- going school desegregation law-nity, on what the improvements suit, and to the president of the might be. 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p- G 3 3 Jr I SI oo a2 o S' o Keck q q3 g Q I ft o T ft o ft s A g" fot 5) w O ft Q. H-< ft James raised the issue of the isting schools, he said. tax increment financing districts He said he disagreed with last week at a convocation of James concerns that the school about 3,000 Little Rock School system cant afford to have five District employees, asking em-redevelopment districts or that ployees to make concerns about the west Little Rock district the development districts known doesnt meet the spirit of the law to any city leaders they might intended to help impoverished encounter. areas. Additionally, James and Kur- All five of the districts, as now rus presented iheir views as inproposed, meet the requirements vited guests at a meeting of the of the law, Keck said. Wright Avenue Neighborhood 0.. SdioolSjLR set new talks about dispute Development areas on meeting agenda BY KIMBERLY DISHONGH ARKANSAS DEMOCRAT-GAZETTE Little Rock School District representatives will meet again today with city officials to discuss the potential creation of five redevelopment districts that could take money away from schools. Mayor Jim Dailey said that at this die third such meeting about the citys approach toward tax increment financing he hopes the two sides can talk specifics. Weve been in fact-finding mode and [this] is kind of our first step to say to them, OK, we need to sit down and here are some points we need to walk through, Dailey said. Thursday night, Little Rock School Board member Baker Kumis explained the financing concept to the rest of the board members and asked for their guidance in preparing for future discussions about it with city officials. Tax increment financing, authorized by a new constitutional amendment, was or^- inaUy meant to encourage redevelopment of blighted or otherwise struggling areas by setting up development districts, but Arkansas* statute is very broad, Kurrus said. Use of the tool is not limited to blighted areas under that law. The base value of property in a development district is frozen when the district is created, he explained. The property increases in value throughout the life of the district, and the amount the property value grows is used to pay for improvements, like roads ' and sewers, within the district. Its a sophisticated technique, Kumis said. It doesnt generate any new tax, but what it does is take property taxes as they grow and uses that for purposes established in their plan. The method could benefit districts that have little development, but could adversely affect districts where development is ongoing. Some states have taken the approach that tax increment financing should not be used except in areas where redevelopment would otherwise not occur, he said. If you form a [redevelopment district] in a large area that was already growing, and you set up the growth in revenue that we depend upon to Sae SCHOOLS, Page 10B Schools Continued from Page 1B form a base for a financial future, that revenue would go for infrastructure or whatever the [tax ass''': increment financing] was formed for," he said. That would be devastating. Dailey, who did not attend Thursdays meeting, said school district and city officials should look at how variables within the proposal could affect school funding, including the circumstances under which a redevelopment district should be formed, how long money would accrue within it and under what circumstances the schools might receive a part of the increment from a district. There are just a whole host of options and considerations that, until this point, we have not had that kind of dialogue, and thats what Im interested in starting [today], Dailey said. Kumis referred to a double whammy that the school district could face because of redevelopment districts. In addition to money that would normally have gone to schools instead of going toward improvements within a redevelopment zone, formation of a redevelopment district could affect how schools are funded by the state. The states formula for fimd- ing schools would assume that the district was getting all the property tax money from the redeveloped areas, making the district eligible for less state money. That formula may soon be reconfigured in light of a May 25 order by Pulaski County Circuit Judge Collins Kilgore directing the state to fix its public education system, which he found to be inadequate, inequitable and in violation of the Arkansas Constitution. We dont know what the new state funding formula is going to look like, Kumis said. [Tax increment financing] at the time of changing the formula is kind of dangerous, Kumis said. Superintendent Ken James surmised that legislators couldnt have known what the total intact of this
funding mechanism would be on the states education system. James said that ahhou^ ri^ now the issue is localized to Little Rock, other school districts across the state will likely be forced to address it soon. Dailey said he hopes that the city and the school district can work together to create redevelopment districts to the benefit of both. I personally just dont see us really coming to a conclusion that has us at odds with the school district, Dailey said. I just think we're going to work our way through these things. And its too important that were able to use this tool for the whole communi- ty and, for the long term, for the benefit of creating a bi^er tax pie for everybody, as opposed to letting ourselves get caught up in a battle right now that might stop us from using tax increment financing because either the Legislature steps in another year and a half and tightens the rules or we get tied up in court.... Thats just not to anybodys advantage. > c w c w K) roSdioolSjLR set new talks about dt^Mite Development areas on meeting agenda BY KIMBERLY DISHONGH ARKANSAS DEMOCRAT-GAZETTE Little Rock School District representatives will meet again today with city officials to discuss the potential creation of five redevelopment districts that could take money away from schools. Mayor Jim Dailey said that at this the third such meeting about the citys approach toward tax increment financ- ing he hopes the two sides can talk specifics. Weve been in fact-finding mode and [this] is kind of our first step to say to them, OK, we need to sit down and here are some points we need to walk through, Dailey said. Thursday night, Little Rock School Board member Baker Kurrus explained the financing concept to the rest of the board members and asked for their guidance in preparing for future discussions about it vrith city officials. Tax increment financing, authorized by a new constitutional amendment, was originally meant to encourage redevelopment of blighted or otherwise struggling areas by setting up development districts, but Arkansas* statute is very broad, Kurrus said. Use of the tool is not limited to blighted areas under that law. The base value of property in a development district is frozen when the district is created, he explained. The property increases in value throughout the life of the district, and the amount the property value grows is used to pay for improvements, like roads and sewers, within the district. Its a sophisticated technique, Kurrus said. It doesnt generate any new tax, but what it does is take property taxes as they grow and uses that for purposes established in their plan. The method could benefit districts that have little development, but could adversely affect districts where development is ongoing. Some states have taken the approach that tax increment financing should not be used except in areas where redevelopment would otherwise not occur, he said. If you form a [redevelopment district] in a large area that was already growing, and you set up the growth in revenue that we depend upon to See SCHOOLS, Page 10B Schools Continued from Page 1B form a base for a financial future, that revenue would go for infrastructure or whatever the [tax increment financing] was formed for, he said. That would be devastating. Dailey, who did not attend Thursdays meeting, said school district and city officials should look at how variables within the proposal could affect school funding, including the circumstances under which a redevelopment district should be formed, how long money would accrue within it and under what circumstances the schools might receive a part of the increment from a district. There are just a whole host of options and considerations that, until this point, we have not had that kind of dialogue, and thats what Im interested in starting [today], Dailey said. Kurrus referred to a double whammy that the school district could face because of redevelopment districts. In addition to money that would normally have gone to schools instead of going toward improvements within a redevelopment zone, formation of a redevelopment district could affect how schools are funded by the state. The states formula for funding schools would assume that the district was getting all the property tax money from the redeveloped areas, making the district eligible for less state money. That formula may soon be reconfigured in light of a May 25 order by Pulaski County Circuit Judge Collins Kilgore directing the state to fix its public education system, which he found to be inadequate, inequitable and in vi- oiation of the Arkansas Constitu- j tion. We dont know what the new state funding formula is going to look like, Kurrus said. [Tax increment financing] at the time of changing the formula is kind of dangerous, Kurrus said. Superintendent Ken James surmised that legislators couldnt have known what the total impact of this funding mechanism would be on the states education system. James said that although right now the issue is localized to Little Rock, other school districts across the state will likely be ! forced to address it soon. Dailey said he hopes that the city and the school district can work together to create redevelopment districts to the benefit of both. I personally just dont see us really coming to a conclusion that has us at odds with the school district, Dailey said. I just think were going to work our way through these things. And its too important that were able to use this tool for the whole community and, for the long term, for the benefit of creating a bigger tax pie for everybody, as opposed to let- ting ourselves get caught up in a battle right now that might stop us from using tax increment financing because either the Legislature steps in another year and a half and tightens the rules or we get tied up in court.... Thats just not to anybodys advantage. > c OQ C w hO hO o oA new tax danger Schools under gun R egular readers of this column remember full well that they were .warned last year about the con- sequences of amending the Arkansas Constitution to accommodate redevelopment districts. I suspected when I read it that the measure would be a licensewell, if Meredith Oakley not to steal and abscond outright, at this funding mechanism could have least to rob Peter to pay Paul. .. .. Offered as Amendment 1 and on the states education system. Since hes ------------------ap- new in these parts, he may be forgiv- proved by voters m last years general en his naivete. The same generosity election, the measure allows cities and should not apply to school board memcounties to (1) enter into short-term bers, all of whom have been kicking (no longer than five years) financing around the capital city long enough agreements whereby they could lease to know better. or purchase equipment and property, ^d (2) issue bonds dedicated to re- ter. Hes already noted that the lanmage developmg areas that the issuing gov- of the new amendment could be used emments governmg board, i.e. the city to devastating effect by city govern- or town council or board of directors ment. Thank goodness Kurrus knows bet- and the quorum court, deems to be de- But Kurrus foresees what he calls tenoratmg or in danger of deteriorat- a double whammy for the school dis- ing without a substantial infusion of trict, the second part being the effect ^ds, formation of such a redevelopment dis- Now comes the city of Little Rock, trict could have on general school fund- the undisputed expert among local gov- emments at robbing Peter to pay Paul, with a proposal to create five rede- ing. As a news story in Fridays - , ------------------------- Democrat-Gazette explained it, in ad- velopment districts that could take dition to losing money that normally money away from the areas public would have gone to schools instead schools. of going into non-school improvements It s called tax mcrement financing, within a redevelopment district, schools and capital city fathuhs and muthuhs could lose out under the states fund- Me champing at the bit to get involved ing formula should the state assume, ... , , incorrectly, that the school district was Ostensibly mtended to encourage getting all the property tax money from the redevelopment of blighted or eco- the redevelopment district, making the noimcally depressed areas, its language school district eligible for less state is broad, open to extremely subjective interpretation, so that it may be money. tive The states funding formula is about applied to any area a governing board to be reconfigured yet again because fancies. of yet another court finding that the current one is unconstitutional. Its a sophisticated technique, said BjAer ^ms who explained the gam- bit to his fellow Little Rock School funding formula is going to be Kur- Board members last Thursday night. -------- ' ' It doesnt generate any new tax, but .......... muuey-gruuoing what It does is take property taxes as gimmick-my characterization, not they grow and [it] uses that [revenue] Kurrusat this time, he added, is kind for purposes established in their [Lit- of dangerous. tie Rock officials] plan. I submit that given the bent of the what s the plan? current occupants of City Hall, it would There are a whole host of options be dangerous at any time. ri <7 JiT. DiJcJ After ycaTS of costly litigation, the crows, allowing as to how he and his Little Rock School District finally has sne^dthnA rnhnrtc OP the cif/s Beard a glimmer of hope for getting out from ot Directors haven t begun to plumb under federal court supervision. It can- tho^ depths yet. W-i-i-ight. not afford to so much as flirt with any .. * I read it, it looks as though scheme that might jeopardize its abil- and considerations, Mayor Jim Dailey spendthrift cohorts on citys Board We dont know what the new state ms said last week, thus embarking upon the citys latest money-grubbing a - 1 u J .----------------------0 iiugiii. jcupdiuixc Its aoii- city otticials have designs on diverting ity to extend equitable educational oo- orooertv tav A-rtm cr-krirtlo _________ii 'u.. . . property tax revenue from schools to portunities to all its patrons municipal ^astructure projects. Since Nothing that diverts so much as a the big push is toward turning the river- penny in tax revenue from this districts front and environs into one gigantic schools, or those of any other school nionument to a former president, I can- district in this state, ought to be given not help but think thats where Daileys a seconds consideration designs lead. Nothing that diverts so much district in this state, ought to be given > c TO tn LRSD Superintendent Ken James has suggested that state lawmakers could not have anticipated the impact ------------- Associate Editor Meredith Oakley is editor of the Voices page. to Letters SATURDAY. SEPTEMBER 8, 2001 Dailey offers 2nd option on redevelopment areas LR mayors plan leaves out Summit Mall BY JAKE SANDLIN AND KIMBERLY DISHONGH ARKANSAS DEMOCRAT-GAZETTE Calling an earlier plan for redevelopment districts something too big, too fost, Mayor Jim Dailey offered a scaled- down proposal Friday that does not include west Little Rock's planned Summit Mall. Dailey's recommendation for economic redevelopment using tax increment financing proposes three districts instead of six, limits those districts to a 10- year life instead of the maximum 25 years and asks for a moratorium on more districts until Jan. L 2003. This is something I feel is a reasonable proposri, Dailey said late Friday. I predict and welcome discussion on it, and if there are suggestions to improve this, I certainly am open to those. Cip' and Little Rock School District officials have clashed over the issue in recent weeks, as schools do not immediately benefit from the new tax base that redevelopment districts create. While Little Rock School District Superintendent Ken James said he took courage from Dailey^s scaled-back proposaL See DISTRICTS, Page 7A uisincis Continued from Page 1A he indicated that legal questions about tax increment financing and schools remain unanswered and must be resolved before the city establishes such districts. The mayor and I have had some good conversations about this, James said. We have interests and concerns, and we have to protect the interests of the kids were here to serve, and when were looking at losing large sums of money, that raises our level of concern. City Director Michael Keck said he expects to offer an amendment or alternative to Dailey's proposal by IVesday, when the Little Rock Board of Directors meets for an agenda session. Keck has favored including the planned Summit MaU in a tax increment financing district, as proposed by City Manager Cy Carney. Carney could not be reached to comment on the mayor's proposaL We have the city manager's initial proposal, and now we have one from the mayor, Keck said. There may be as many as 10 other proposals out there to work throu^. This is another step in the process as we move forward. City oftlcials drew criticism for stretching one districts boundaries to include the $150 million megamall in Carneys eariier proposaL School officials, in partir-iiiar, con^Jaincd thar die city's public schools would miss out on SL5 million in new property taxes, even though the cip' approved plans for the mall, in part, because the development would provide new tax money for schoob. Ideally, tax increment financing. Imown as TIF. induces de- vuopers to build in run-down areas with declining property values. Opponents l^e argued that the wo^ed area considered for Summit Malt qualify. A N Tax incremenl financing districts IS CUfiton Dbrary Wwdl/ SOURCE: atyolUMRa o NewTIF proposal OWTIF proposal AHUKH Da(nocrs.Gaznt Rules for TIFs vary from state to state, but the concept nationwide is the same. When a TIF district is established. property tax values are frozen for collections that ordinarily would go to taxing bodies like schools or libraries. As property appraisals rise beyond at frozen level, the taxes on the added value are collected and distributed to projects within the TIF district. In Little Rock 24 percent of those taxes would be required to retire debt.___ Developers within a TIF district pay property taxes unless the city has awarded them some sort of tax break. After the TIF has expired in Arkansas TIFs may last for up to 25 years all property taxes go back to the usual taxing bodies. State voters approved the use of such districts by passing Amendment 78 last November. On Friday, Dailey reiterated earlier statements that he wouldn't support any proposal likely to harm schools. He also said legal questions that arose only in the past two days concemii^ the effect of tax increment financing on schools and on the state's funding schedule must be addressed before proceeding. We must make sure we have a legal system of instituting tax increment districts,'' Dailey said. James, who received a draft of Dailey's proposal Thursday, said the law establishing TIFs may conflict with Amendment 74, which guarantees schools a certain amount of money to pay for day-to-day operations. The law clearly states that school districts are supposed to receive their 25 mills, and nothing's supposed to get in the w^ of that," the superintendent sai<l Talks with James and School Board member Baker Kurrus. DaUey said, convinced him that the only way we could move forward with something is to have it in a scaled-down fashion. They said we started out with something too big, too fast, Dailey said. "We have terms that were too long and we were, in their opinion, taldog mon^ from the school district that didn't fit, in their opinion, the criteria that tax increment financing would typically surest. It would be hard for me to support anything if we don't have the School Board saying, 'Yes, we're OK with this,' Dailey said. Dailey's proposal would limit the three redevelopment districts to midtown in the Markham Street and Universi- ty Avenue area
the University Avenue and Asher Avenue area, including the University of Arkansas at Little Rock
and downtown, including the River Market. south Main Street and the Hanger Hill neighborhood. Carney's proposal, originally for five districts, recently added the University and Asher avenue district, which includes UALR and the Curran-Conway neighborhood, as does Dailey's scaied-back version. The other districts in Carney's proposal are the Little Rock Port, a portion of southwest Little Rock, midtown, downtown and the Summit Mall area near Shackleford Road and Interstate 430. Tm surprised to see the number and the location of the three districts that were presented by the mayor, Keck said, adding that he hadnt seen the mayor's full proposal or its exact geographic boundaries. "The mayors plan. Keck added, doesn't jeopardize Summit Malt I think it just limits the scope of what we could do, he said. If the school district is banking on that money, as School Board members have been quoted as saying, maybe we ought to leave it be. But we certainly can identify certain projects worthy of funding in TIF districts out there and not even get close to the Summit MalL John Walker, who represents bla^ students in the school district in a federal desegregation case, said earlier that he would oppose with vigor using tax increment financing to ben^t bur- geoning areas of the city. We will use this Tdesegre-- gation] case as the vehicle for seeking relief from [Chief U.S.' District Judge Susan Webber Wright] by seeking to bring the. dry of Little Rock into this case. Walker said. James said he has not talked about that issue with Walker, but he has had conversations on the - matter with city offtdais. The mayor and I have discussed that we have to be very carefill in terms of any ftnancial impact on the school district because of our obligations in this court case." James said. Anything that talws away resources that are going co inhibit us from meeting our obligations under the covenant, thats a problem. iSeptember 18. 2 0 0 1 Forum crowds skeptical ofTIFs Residents cautious of LR growth plan BY C.S. MURPHY ARKANSAS DEMOCRAT-GAZETTE Little Rocks designated redevelopment district expert listed public trust Monday night as a key component for success, but crowds gathered at two separate sessions on the financing technique exhibited little. Ray Gosack, deputy city administrator of Fort Smith, had difficulty getting through his presentation on tax increment financing, known as TIF, because audience members kept barking out hypothetical questions and critical comments. Who wrote this? one person asked of the legislation enabling the districts. Another posed the question, Can this be used to segregate a community?" Still another asked, 1 Is there any federal input into these TlFs? About half of the participants in the session at the Central Arkansas Library left midway through the program to attend another meeting on the same topic held by the Pulaski County chapter of the Arkansas Community Organizations for Reform Now at Rockefeller Elementary School. About 100 people attended that Save Our Schools forum where Little Rock School District Superintendent Ken James, School Board member Baker Kurrus, civil rights lawyer John Walker and other community i leaders warned that the broad formation of TIF districts pos- | es a financial threat to the states largest school system. TIFs divert growth in proper- ' ty tax revenues from schools to development within the district, they argued. Jim Lynch, co-chairman of the Little Rock New Party and a speaker at the ACORN session, called the citys TIF plans a "clandestine attack on the school budget. . We ought to say no to these large TIF districts, Lynch said. They wont work, and they are bad for our children. City Director Michael Keck said earlier Monday that he was frustrated to hear that school officials were being billed as key speakers at ACORNS meeting. "It concerns me that at the r time that we have our meeting scheduled that some of the leaders of the school district are choosing to participate in a meeting thats geared toward stopping the city from moving See TIFs, Paae 3B I I TIES Continued from Page 1B forward, he said. James, who attended the city forum before speaking at the ACORN event, said ACORN established its agenda and lined up speakers before the city-sponsored meeting was formalized. The citys Board of Directors and the Little Rock School Board have set a joint meeting on the issue for 6:30 p.m. Monday at Parkview High School. City officii drew criticism last month when they unveiled five redevelopment districts, later amended to six. Some residents were particularly upset that one district included the $150 million Summit Mail in west Little Rock School officials complained that the citys public schools would miss out on $1.5 million in new property taxes, even though the city approved plans for the mall, in part, because the development would provide new tax money for schools. Traditionally, tax increment financing induces developers to build in run-down areas with deRules for TIFs vary from state to state, but the concept nationwide is the same. When a TIF district is established, property tax values are frozen for collections that ordinarily would go to taxing bodies such as schools or libraries. As property appraisals rise beyond that frozen level, the taxes on the added value are collected and distributed to projects within the TIF district. In Little Rock, 24 percent of those taxes would be required to retire debt. Developers within a TIF district pay property taxes as usual but the city may award them some sort of tax break After the TIF expires, all property taxes go back to the usual taxing bodies. State voters approved the use of such districts by passing what became Amendment 78 in November I dont think the voters wholesale imderstood that school districts were going to be impacted, James said before leaving the library meeting. We didnt have any idea some of this language was folded in. Information for this article ivas con- tributed by Cynthia Howell of the Arkansas Democrat-Gazette. dining property values. Opponents say the wooded area considered for Summit Mall doesnt qualify. Two weeks ago. Mayor Jim Dailey offered a scaled-down proposal that does not include the planned Summit Mall. Dailey proposed three districts instead of six, limiting those districts to a 10-year life instead of the maximum 25 years and asked for a moratorium on more districts until Jan. 1,2003. Keck planned to offer an amendment or alternative to Daileys proposal but postponed action last week after the terrorist attacks on the East Coast. Keck has favored including the planned Summit Mall in a tax increment financing district, as proposed by City Manager Cy Carney. On Monday, Keck said city leaders should take a time out and work with school district leaders to put the citys redevelopment future in perspective. We need to establish some principals we can work from, Keck said. But TIF districts are going to be created in the city of Little Rock Does that mean theyll all be the same? No. We cant t^e a cookie-cutter approach to TIF districts in the city.o o CM LR leaders shaving plans for redevelopment districts o JQ E o a w BY C.S. MURPHY ARKANSAS DEMOCRAT-GAZETTE Little Rock leaders are backing further away from their original plan for the citys first redevelopment districts. Just a month ago city leaders stepped an eager foot forw^d to promote five, sizable tax-increment financing districts. But Little Rock directors have withdrawn considerably since the Little Rock School district complained that the districts could divert property taxes away from schools. On Tuesday, Little Rock Mayor Jim Dailey took another step back by suggesting ^e city promote only one district that would encompass a portion of downtown. Dailey had suggested less than two weeks ago that city leaders reduce the original six proposed districts to three. Im willing to retreat one See DISTRICTS, Page 5B Districts Continued from Page 1B more step on this, he said, suggesting Little Rock initiate planning studies on other proposed redevelopment districts. Theres not the same sense of urgency with these others as there is downtown. Taxes generated within a tax- increment financing district, except portions already pledged to retire debt, do not go to schools, libraries and other taxing bodies. Instead, cities can use the money in varied ways, from improving streets and upgrading sewers to repaying a developer's construction costs. Dailey said it would be sin^ler to move forward with only a downtown district because the city already has invested much time and money into developing the area- Other members of the Board of Directors also suggested re- evaluating how the city should use tax increment financing, called TIF. Tax-increment financing usually aims at inducing developers to build in run-down areas with declining property values. Opponents argue tlmt the wooded Summit Mall site near Interstate 430 and Shackleford Road, doesnt qualify. Some city leaders, however, have said they included the m^ in a district to benefit the John Barrow Road neighborhood, where substandard streets wind through the community and residents yearn for improvements. City Director Barbara Graves, echoing Keck, said directors should work with school officials City Director Michael Keck suggested city leaders work with school officials on guidelines for quired to retire debt. ___ Developers within a TIF district pay property taxes as usual, but the city may award them some sort of tax break. After the TIF expires, all property taxes go back to the usual taxing bodies. Several directors expressed dismay that school and city officials are working against each other. Somewhere along the line, it started to become us against them, said City Director Willie Hinton. "Were all the same com- munity. Good communities build good schools. There are a lot of us who rushed to judgment. We to decide what they want to ac- complish with the districts and determine what percenta^ of the take a step back citys land districts should include -j^g city's Board of Directors Education is absolutely a pri- the Little Rock School Board The ority of this board collectively, she said. City Director Genevieve Stewart said leaders should start over before approving the citys first redevelopment districts. "The city needs to create a policy for TIF districts even before districts are created, she urged. This is the No. 1 thing we need to do. have set a joint meeting on the issue for 6:30 p.m. Monday at Parkview High School. When a TIF district is estab- redevelopment districts before Ibhed, property tax values are districts are drawn. Lit- frozen for coUections that ordi- specific districts are drawn. Little Rock should share money col- lected in redevelopment districts with the school district, he said. I think we should work in a collaborative manner with the [school district]. I view this as a starting point, said Keck, who has supported a west Little Rock redevelopment district criticized because it includes the planned $150 million Summit MalL larily would go to taxing bodies ike schools or libraries. As property appraisals rise beyond that frozen level, the taxes on the idded value are collected and dis- ributed to projects within the TIF district. In Little Rock 24 per- :ent of those taxes would be re-Find our online edition at www.arkt1m^.com ARKANSAS TIMES SEPTEMBER 21.2001 15 City Hall starts over on tax plan School opposition pushes LR Board to bargaining table. BY MAX BRANTLEY Little Rock city government brought an expert on tax increment financing to town this week and nobody asked the obvious question about the appearance by Ray Gosack, deputy city administrator at Port Smith. Why wasnt this explanatory session held BEPORE City Hall proposed 11,000 acres worth of tax increment financing districts that could skim the school tax revenue growth from roughly 20 percent or more of the Little Rock School District? If Gosack had been involved sooner, city officials perhaps would have tried some of his tips for TIP success. (In a Little Rock TIP district, growth in property tax revenues would be diverted from the customary recipients schools, libraries, the Childrens Hospital, the county and police and fire pension fundsto the city for any purpose it designated, though the program is nominally designed to spur development.) One of Gosacks tips: Keep other taxing districts informed. As everybody knows by now, the school district was blindsided by the citys initial proposal, which threatened to take a huge chunk of the schools most valuable property and use all future tax growth in that territory for the city, including taxes from the $200 million Summit Mall. In the initial proposal, city officials also ignored another piece of Gosacks advice following a but for rule. This means that you shouldnt extend the benefits of aTIP district unless development wouldnt occur without it Por example, the Summit Mall was on the drawing board long before tax increment financing GXDGft GffGCtiVGlV Gosack effec- was even approved by the repudiated What lively confirnied what Little Rock initially tried to do. legislature. In the face of growing school and grassroots opposition, the City Board has changed course. It has now decided it wants to study the issue further and negotiate with school officials. Mayor Jim Dailey announced Tuesday that he now favors, at the outset, only one TIP district, down from six. It would target a smaller portion of downtown than the original downtown district. City Director Michael Keck, a leading TIP advocate, also pulled back from a planned compromise TIP proposal in favor of talks with the Little Rock School District The change is a response in part to public opinion. At the outset, when TIP proponents thought they controlled a majority of the City Board, they failed to notify the School District of the scope of the initial proposal, keeping it a secret until the last minute. But a leak of the details to the School District pompted a furious outcry from school supporters. Mayor Jim Dailey then encouraged a more deliberate approach and also proposed a 75 percent reduction in the size of the initial TIP districts. At the City Board meeting Tbesday night, he took it even further, to one small downtown district thats only a tiny fraction of the original plan. The change comes, too, amid growing legal questions about whether tax increment finance districts can ever tap school tax millages under the Arkansas Constitution. City Attorney Tom Carpenter has prepared a lengthy memo raising this and other legal questions. The Board informally directed him to attempt to intervene in the pending state school finance lawsuit to gel some answers and also talked of the possibility of a test lawsuit. Lawsuits were mentioned frequently Monday evening by school supporters who turned up at a pair of meetings the citys information session and a Save Our Schools rally organized by Acorn at Rockefeller School. At the citys meeting at the downtown library, Gosack asked a pertinent question. What can make aTIPdistrict fail? One answer: Lack of public trust Distrust was abundant Monday night At the Acorn session, grassroots activists, a school teacher and former City Attorney Maik Stodola were among those who objected to the raid on school lax money, Stodola noted that the city had planned to establish the districts without first formulating any policies for use of TIPs or revealing details about the developments they were supposed to encourage. These steps, by the way, are all things that Gosack recommends for a successful TIE Tuesday night, city directors finally decided this might be a prudent way to begin. Under questioning critics had known for weeks. The constitutional amendment and enabling legislation were drafted by the city government lobby and bond lawyers. Both hope to reap a windfall. He offered no explanation of why school districts werent invited to the legislative table, as they have been in other states. The answer seems obvious. Gosack also said something, as a framer of the TIP vision, to remember in future court tests. While the statute lists a number of individual reasons that aTIP can be established, including a general economic development provision that would seem to open the door for almost any use anywhere, Gosack said he bel ieved that multiple criteria had to be met and that blight, environmental hazards and the like were the most important Gosack didnt appease civil rights lawyer John Walker, the most critical in a crowd that frequently interrupted Gosack with questions and criticism. Walker said he saw TIPs a.s nothing but a new version of Urban Renewal, Mode! Cities and a variety of other categorical federal aid programs that had encouraged suburban growth, segregated housing and caused blight in neighborhoods left behind. He warned Gosack AW Bib ft * if SHARP QUESTIONS: Little Rock's new school superintendent, Ken James, posed critical questions this week as city government tried to explain and defend its tax increment financing plan. of the perils of approving TIPs in light of both the Little Rock desegregation ca.se and the court ruling that the state public school system is unconstitutionally deficient, likely in need of hundreds of millions in new money. Gosack also was called down by School Board member Baker Kurrus when he spoke of the benefits of TIP districts. Kurrus said the.se statements presumed that growth within TIP districts would occur because of tax increment financing. Some of that growth, he said, could simply be normal property value growth and development that would have occurred TIP or no TIP. School people also challenged Gosacks assertion that voters knew they were approving a transfer of school tax when they approved the TIP constitutional amendment in 2000. Gosack tried to debunk critics argument that TIP money could be used for almost anything. But then he listed TIF-eligible costs everything from land purchase, to private building construction, to legal and marketing fees to job training. It was hard to imagine what THE INSIDER Continuedfrom page 3 This is the second lime the Summit developers and the city attorney have been at odds. He earlier objected to its intervention in the case, arguing that the city was the defendant in a suit brought by mail neighbors and it could protect the Summits interests. The Summit was allowed to intervene and now it wants to make much of the evidence secret. Hog time change Syndicated television network Jefferson- Pilot Sports could change its mind particularly with another inept Razorback showing this weekend at Alabamabut apparently the was NOT allowable, save perhaps beer and dancing girls. Gosack came to Arkansas with experience in Illinois, one of the most aggressive users of TIP financing. Questioned afterward, he acknowledged that he was familiar with a report by a Lake Forest (Ill.) College professor. The professor concluded that Illinois cities that used TIPs had exhibited no greater growth than those that didnt. Gosack offered by way of explanation that Illinois had some complicating differences in its property tax structure. But many people believe Illinois is actually better situated to use TIPs because it has a higher property tax rate and thus can generate more money for development incentives. Gosack also acknowledged that UlinoisTIP districts generally are much smaller than the average 2,000-acre districts first proposed in Little Rock. He cited one large district of several hundred acres in Illinois, but it was a suburban citys creation of a giant TIP district on a former cornfield to lure a single retail operation. A revealing moment came when Little Rock School Superintendent Ken James asked Gosack about TIP plans in Fort Smith. The answer, if you presume Gosack the expert, effectively repudiated what Little Rock initially tried to do. Where City Manager Cy Camey envisioned perhaps 11,000 acres worth of TIP territory in six huge districts, Gosack said Fort Smith was tentatively looking at one district, aonc- or two- acre site on which a couple of buildings might be rehabilitated. And it will move forward only after a development plan is devised. City Director Keck said he was disappointed that school officials were rallying opposition at the same lime the city was trying to explain and negotiate. It was a stark illustration of the political sea change. When the TIP project was first floated, he and other proponents evinced little interest in study, negotiation with the schools or delay. The City Board and School Board will meet jointly on the issue at 6 p.m. Monday at Parkview High School. broadcaster of Southeastern Conference football ha.s decided to pick up the Arkansas-South Carolina game scheduled for Oct. 13 at War Memorial Stadium. Thal means a kickoff time change from 6 p.m. to 11:30 a.m. We hear that stadium officials have already been alerted to the impending change. The move also will mean that dating back to the end of last season, Arkansass football team for better or worse will have been televised in seven consecutive games regionally or nationally, which has never happened in school history. No word yet on whether TV will show the Auburn game Oct. 27 in Payelteville, but J-P has it under consideration. The Hogs dont play the other weekends in October. The explanation is greed Find our online edtion at www^rktlm<j^.coni ARKANSAS TIMES SEPTEMBER 21,2001 <7 A federal jurist of local distinction is reputed to have first uttered the proverb, Real estate rots the soul. What he meant was that the greed to squeeze the maximum wealth from property will drive a man to steal from small children. That is the best explanation for the Little Rock Board of Directors pell-mell rush to grab millions of dollars of taxes that people voted fotthe public schools and use them to bankroll developers. The skeleton key for this legalized theft, which will allow real estate interests and city haters who could countenance such a royal heist governments to break into the school fisc anywhere in Aritansas, is called' tax increment financing. The words themselves, along with the anesthetizing phrase redevelopinent bonds, are calculated to lull die reader to sleep or at least into complacency. They have indeed gulled the voters for the better part of a year now but in the end they will prove lethal, not merely anesthetic. Though the plans are now in limbo, the city Board has wanted to include much of the Little Rock School District in six redevelopment districts, which will enable it to siphon off school taxes to pay off bonds that the city will issue to defray real estate developers costs or to otherwise enhance their developments. As proposed, the biggest beneficiaries would be the developers of the giant Summit Mall in western Little Rock. It would be hard to find anyone outside the wM ERNEST DUMAS orbits of real estate interests and public school from the citys school children, but the city board could be about to do it anyway. The Little Rdck schools and its children are only the first victims of tax-increment financing
other cities will follow once Little Rock shows that it can be done. Little Rock got to be first, only weeks after 140 years of constitutional protections for children were subtly dismantle^ because developers had acquired die Little Rock city government in a series of lethargic board elections. Once die board enacts ordinances creating die redevelopment districts, school patrons will circulate petitions to refer them to the voters, who will kill the financing unless the city can arouse the school haters in numbers enough to ratify them. Even at that, the Arkansas Supreme Court or the federal courts may not go along with the artifice, even though it was sneaked into the state Constitution. It is a good question whether even by a deceptive constittJtiona] amendment people can abrogate a solemn contract between government and the voters. Every school tax in Arkansas history was approved under a constitutional bond that guaranteed voters that none of the taxes they approved could ever be diverted to any use but the schools. Il appeared in the 1874 Constitution and in amendments ratified by the voters in 1926 and 1948 that authorized schools to collect ad valorem taxes if voters approved them. It was necessary to promise voters that the schools would not be used as a pretext for a tax increase that would then be used for another purpose. It was never done until now. That constitutional protection was quietly removed by Amendment 78 of 2000, or at least city officials and developers hope they have removed it The Little Rock schools and its children are only the first victims ot tax-increment financing
other cities will follow once Little Rock shows that it can be done. How that came to pass at least should offer us a lesson we should not soon forget Tax increment financing was piggybacked onto an amendment that lets city and county governments buy expensive equipment on installment which was almost universally endorsed. The complicated redevelopment financing got almost no attention. It was supposed to be a method to let cities or counties spruce up a blighted neighborhood. Infrastructure improvements in a decrepit neighborhood that led to development could be paid for by the extra taxes generated by the property improvements. The amendment says the extra taxes for all taxing units would be diverted, but it was generally assumed that the extra taxes would be those that would be collected by all the taxing units of city and county governments: their general and capital-improvement funds, libraries, police and firemens pension funds, water and sewer improvement districts and the like. Nowhere in Amendment 78 does it mention that it alters Amendment 40, the school finance law. Nowhere are the schoolseven mentioned. Had it done so, school forces would have been aroused, and the amendment would never have been ratified. You cai search the newspaper stories and editorials about die amendment during the 2000 election without finding any mention (hat schod taxes would be those diveTtedL Not until 1,385 words deep in a 35-page enabling act passed by the legislature this spring does the word school finally appear in (he law. Under the definiticn of all taxing units it includes school districts. The bill was approved with scant debate and passing mention in the media. Hijacking the Constitution takes stealth and a couple years of planning. In the future, well have to check the passenger manifest for bond lawyers, developers and city officials. <6. o o CM City leaders ponder propriety of owning property in UF districts m csi e BY CS. MURPHY ARKANSAS DEMOCRAT-GAZETTE Little Rock Mayor Jim Dailey and two city directors own property within proposed redevelopment districts, die hotly debated financing tool that fonn^ tax dollars away from schools and li-jraries to revitalize targeted areas. Concerned that they could bt CITY BOARD, School Board face off on issue. Page 1B. have a conflict of interest. City Directors B.J. Wyrick and Dean Kumpuris say they will bow out of discussions and wont vote on the proposed districts that include their property. Dailey, however, says he will participate fully unless he directly benefits from the deal The city attorney says its legal for the city leaders to discuss and vote on how the districts should be drawn and how the money should be spent But Wyrick and Kumpuris say its not that simple when dealing with an issue that has school officials and some residents saying the districts would undermine public education. The city directors say they are trying to balance their desire to set policy with the need to avoid any appearance of crafting a scheme that would benefit themselves. I dont want peo^e to think Im trying to feather my nest Wyrick said. Within these redevelopment districts, tax increment financing. or TIF. would be used to channel new property taxes into revitalization projects, such as improvir^ streets, upgrading sewers or repaying a developers See DISTRICTS, i-'age 6A a 9 w Districts ' Continued from Page 1A construction costs. These taxes, applied to increases in property value, would otherwise go to schools and libraries. By channeling millions of tax dollars for specific initiatives, city board members ate in the position to alter dramatically the way Little Rock manages growth and redevelopment. Don Zimmerman, executive director of the Arkansas Municipal League, said city directors could easily protect public trust while discussing TIFs if they at least disclose possible conflicts of interest That way. everyone would know ahead of time that this particular director owns property that is to be included in a district," he said. liie size of a city directors property as it relates to the size of a proposed district should be considered, he said. If it was a small district that would benefit only the [city] director and one other property owner, then they should recuse," he said. If its just a situation where you are one of hundreds or thousands of property owners and your interest isnt more significant than anyone else, I think it would be proper to fiil-ly participate. A DIFFICULT CHOICE The potential conflicts arose last month when City Manager Cy Carney six proposed redevelopment districts that would include the Little Rock port a portion of southwest Little Rock, midtown, downtown and an area in west Little Rock that would include the proposed Summit Mall Little Rock School District officials immediately objected, claiming the districts would keep the citys schools from collecting new property taxes. Reacting to the criticism, Dailey recommended that city leaders reduce the number of districts ftom six to three. Then last week, the mayor proposed reducing them again this time from three to one. Now the mayor supports a single downtown redevelopment district one that includes a three-story warehouse at East Third and South Rock streets that Dailey is transforming into loft apartments. The S3 J million project would When the city board began convert upper floors of the old Daileys Office Furniture Co. into 36 one- and two-bedroom loft apartments. Office and retail space will be offered on the ground level Though TIFs Dailey are designed to increase the value of an entire redevelopment district, Dailey said he doesnt believe his property will directly benefit in a way that warrants his recusal. After all. he notes, his investment in his downtown property is already ------------- enhancing its value with or discussing the TIF issue, Wyrick without a TIF. . was put in an awkward posi- If anything, well be adding tax dollars to the district if a district is being formed, Dailey said Wednesday. Were going to be paying the same amount of taxes, one way or the other. New Party Chairman Jim Lynch, who successfully pushed Dailey to recuse on the Summit Mall issue over a potential conflict of interest, said he doesnt have a problem with the mayor or city directors current involvement in redevelopment districts. But the potential for future conflicts exists, he said. Its really hard for me to understand why he wants to continue to be mayor and be heavily involved in real estate, Lynch said. Youre obviously going to continue to run into a clash of conflict. I just dont see how he can do both. Dailey said the key to balancing his role as mayor with his private interests is to avoid anything that would directly benefit his property. "If there was situation wh^ I would get direct personal gain, I wouldnt be able to accept that or I would recuse, he said. don because a proposed TIF district in southwest Little Rock could save her money. Wyrick, who owns 95 acres of pastureland off Alexander Road, pays about $16,000 annu-ally to a water improvement Kumpuris, an at-large city director, said he hadnt thought about a possible conflict of interest until Wyrick asked City Attorney Tom Carpenter about her property Tuesday. But it didnt take district that would be part of a proposed Wyrick 5,000-acre redevelopment district. Little Rock officials have said they could use money collected STEPPING ASIDE Little Rock officials have been intrigued by how redevelopment districts were used by other cities to revitalize once blighted areas. Noting that most other states allow TIFs, city officials lobbied state lawmakers to pass a law that would allow them in Arkansas earlier this year. from the district to pay off the troubled water districts bonds, issued 20 years ago to pay for wa-teriine extensions. That would reduce Wyricks annual payments. Ive not participated in discussions on this," said Wyrick, who represents Ward 7. 1 thought it was time for me to disclose that I own property down there." Wyrick said this week that she may eventually recuse herself but she has mixed feelings on it I represent the people who are ray next-door neighbors, she said. Weve paid on these taxes for 20 years, and its time for this to be over. But on the other hand, you should always avoid the presence of evil." Kumpuris' office and two family-owned buildings are located on University Avenue, inside a proposed midtown redevelopment district. Kumpuris long to decide how to address the issue. "If we make that a TIF, I would recuse on it," he said. Kiimpurisand his family own a vacant building Kumpuris on the comer of Main and Fifth streets that would also be included in the proposed downtown district. He said he will drop out of discussions on that district too if city directors resolve to draw it If we talk about it in the abstract, like we do ri^ now, that's OK," he explained. But I think once you start saying youre going to vote for something that will do something, you probably should get out of that deal. MAKINS THE CALL Dailey decided to disqualify himself from voting on the Summit Mall development because his brother-in-law. Hank Kelley. has ties to the project Dailey said then that he feared the move could set a precedent that would bar him from voting on any city matters involv-irg Flake & Kelley, a Little Rock real estate and property management firm in which Kelley is a partner. Kelley is also coordi-natii^ the redevelopment of Daileys downtown property. Arfcan^s ethics la^ dont address when city directors should recuse or abstain from voting, said State Ethics Commissinn Director Graham Sloan. The city's code of ethics, however
requires public officials to disclose matters that have a financial impact on themselves or their relatives and refrain from voting when they or their immediate family could benefit. Although the city's ethics code allows city directors to sit with the audience when the board is discussing matters ftom which they have recused, Dailey left Summit Mall hearings entirely. Board discussions so far have been too general to merit recusals, said Carpenter, who issues formal opinions on conflicts of interest. We're talking about the concept of TIF districts and whether the city should be involved in them, he said. "When the discussion starts getting into specifics such as b^oundmes or specific projects, then the question comes much closer. But I dont think theres a hard and fost Hile at this point. As long as the board is participating only in public mus-ing
on die topic, recusals won't be necessary. Carpenter said. Until there is some sort of legislative action, such as an ordinance or a resolution, the board hasnt done anything," he said. "Theyre quite sensitive to it and are not going to do anything inappropriate. i". f- l it views swapped friendly but firmly School officials tell city their doubts BY EUSA CROUCH ARKANSAS DEMOCRAT-GAZETTE The Little Rock Board of Directors and the Little Rock School Board got down to the nitty-gritty Monday night while discussing tax increment financing a redevelopment tool that both bodies view differently. Their first joint meeting on the issue sounded adversarial at times, as talk of legal challenges milled with a few friendly remarks about fmding middle ground on the tool known as TIE About 30 watched from wooden chairs as the seven School Board members and 10 of the 11 city directors bantered behind a horseshoe of tables inside Parkview Magnet High School. How are we going to move this forward? a frustrated City Director Dean Kumpuris asked. In the audience, a man held a yellow sign that said, Dont stiff our kids. Because TIF would divert some property taxes otherwise designated for schools to redevelopment districts, school officials I question its legality. School Su- ! perintendent Ken James sent a letter last week to Attorney General Mark Pryor asking him for an opinion. Though Arkansas voters approved TIF last November, doubts over implementing it have city officials worried, too. City Attorney Tom Carpenter plans to ask the Arkansas Supreme Court to consider the question when it takes up a lower court ruling that declared the states school funding formula unconstitutional. School Board members told city directors Monday they wouldnt file a lawsuit against the city but warned that others likely would take Little Rock to court if officials use TIF funds for development purposes. This is a serious constitutional question about whether a TIF district can take money thats been voted as school millage, School Board member Baker Kurrus said. I dont know how this case will See TIFs, Page 3B TIFs Continued from Page IB come out. But it will be tried. Most certainly. Nearly all 50 states use TIF in some form to spur development and redevelopment by forming a district and freezing its property values. As a project increases those values, the additional funds are used for such improvements as road work or refurbishing old buildings rather than for schools. Once the districts expire in Arkansas they can last for up to 25 years the new property taxes start trickling into regular taxing bodies, such as schools and libraries. Little Rock would be the first Arkansas city to use TIF. In August, city leaders proposed creating six redevelopment districts one of which encompassed the $b0 million Summit planned for a wooded site near Interstate 430 and Shackleford Road. On Sept 7, Mayor Jim Dailey proposed reducing the number of redevelopment districts to three. Last week, he retreated even further and proposed reducing the number to one downtown district. With redevelopment projects already under way downtown, Dailey said he wants to create the district and move forward. I just hope that we dont just shut down the progress on TIF while we work through the legal issues, he said. Most city directors said that its best to move slowly with TIF and that downtown where growth is occurring but needs a push south along Main Street and east and west along Capitol Avenue would be the best starting place. We definitely want it to be a win- win, City Director Barbara Graves told the School Board members. | While several School Board [ members nodded as their city counterparts talked about their desire to redevelop downtown and create a 10-year district rather than a 25- year one as law allows, the discussion ended up again and again at a possible legal roadblock. If its earmarked to come to us, its got to come to us, School Board member Tony Rose said of property taxes. School officials point to Article 14, Sect. 1 of the Ariunsas Constitution, which prohibits school tax revenues from being appropriated for any other purpose [or] to any other district than that for which it is levied. Another provision, Amendment 74, guarantees that at least 25 mills of assessed value go toward maintenance and operations at each of Arkansas 310 school districts. Approved in 1996, the amendment aims to correct disparities in funding between rich and poor school districts. A mill is one-tenth of a cent for ' every dollar of assessed property val-' ue. The Little Rock School District collects 44 mills on property tax bills. The debate over TIF will continue in coming weeks. Kumpuris suggested that the city board approve the downtown district and set aside the TIF revenues that would come from it until legal questions are settled. Though city and school officials left smiling at one another and shaking hands, they agreed that in the end, whether Little Rock uses TIF will come down to a court decision. What I keep hearing the city board saying to the School Board is, why dont we all work together to spend your money? School Board member Rose sail I dont like it o 3 O" (D N) aiSti September 1 8, 2 0 0 2 Pulaski County district tax PRECINCT FOR 039A/098K/099B/299D Berea Bapt. Church . .11 097H Sherman Park Com.. Ctr. .......................0 . 098D Hanis Elementary School .14 098G/908N/998P/998Q Meadow Park Elem. .1 098J Calvary Baptist Church. 108L First United Methodist . .0 .58 120A/408A/4O8B First Baptist (Maumelle) .. .83 125H/135H Crystal Hill Baptist Church...........15 125I/725B/735A Henderson UMC ..................8 . 128K Outlook Pointe ........................... 135AZ135B/135E Winfield UMC........... 135C/135D Lake Maumelle F.D.............. 135F C.A. Vines Ark. 4-H Ctr................. 135G Highland Valley UMC.................. 135J/145A Maumelle Assembly of God 135K/155A Chenal Valley Church .... 135Q Parkway Place Baptist Church ! 139B/149A Bayou Meto Elementary 149C St. Stephens Episcopal ......... 149D St. Jude's Cath. Church ......... 149E First Presbyterian Church ..., 149F/149H Jacksonville B & G Club .129 .15 . .6 .. .14 14 .1 . .0 .4 .46 .65 .47 .26 .18 229B/329J/339K First Bapt. (Gravel Ridge) . .58 229E Sylvan Hill Comm. Church .. 239A Reuther Hall/I.E.U.Local .... 239C/299E Indianhead Lake Baptist 239F Jack Evans Senior Ctr.......... 239G Sherwood Youth Center .... 239H/298A First Baptist (Sherwood) .43 .88 .73 .51 .71 .60 300B/320A/320D Immaculate Heart of Mary .10 320C/320E Oak Grove High School .... 329F/329G Northwood Middle School .. 329H Sylvan Hills UMC........................... 3291 Good Shepherd UMC .................... 335J Chenal Rehab & Healthcare......... 349L Zion Hill Baptist................................ 408C/408D Belwood Elementary........... 408E/418F/420A Amboy Baptist Church 408J Berean Baptist Church .................. 408K/428L St. Anne Parish Hall.............. 428M/518C/529A Indian Hills Baptist ... 518K NLR High/East Campus................ 557K/957E/957M South LR Comm. Ctr. . 566H/956F Geyer Springs UMC ........... 5661 Lewis St. Ch. of Christ .................... 567J Cooperative Extension Serv.......... 7171/917B/957G Metropolitan Career Ctr 725A/726D David 0. Dodd Elem.............. 726K/726L LR. Fire Station #18 ........... 817C Parkview Christian ......................... 817D Baseline Elementary ..................... 817EArch SLVol. FD .............................. 817F/957J Mills High School .................. 817H New Haven UMC............................ .16 . .122 .36 . .22 . .2 . . .38 .1 . .4 .0 .11 .11 .0 . .0 .0 .0 .0 .4 .0 .0 .2 .4 .17 .9 . .15 857G/917A/957L Wrightsville City Civic Ctr . .18 909M/909N Plantation Agri. Museum..............8 . 957H Pilgrim's Rest Baptist 9571 College Station Comm.Ctr. 957K L.R. Fire Station #4......... Early Vote Courthouse............. Absentee.................................... Totals......................................... .0 .10 .0 . .11 .. .40 .. .1430 AGAINST ..........12 .............0 .............9 .............0 .............0 .............9 ..........14 ...........20 ..............1 ...........19 ..............7 ..............8 .............1 .............6 .............1 .............0 .............4 ...........29 ...........35 ...........39 ...........13 ...........16 ...........46 ...........27 ...........51 ...........65 ...........45 ...........46 ...........36 ...........26 ..............2 ............95 ...........12 ...........16 .............0 ...........43 ..............0 ..............0 ..............1 ..............8 ..............7 ..............0 ..............Oi ..............0 ..............0 ..............0 ..............0 ..............2 ..............0 ..............4 ..............2 ...........34 ..............8 ..............7 ...........12 ...........10 ..............0 ...........16 ..............0 ...........20 ...........37 .........921March 1 4, 2 0 0 3 School Board backs break for Bass Pro LR district tentatively approves sharing future tax money to bring store to city BY ANDREW DeMILLO ARKANSAS DEMOCRAT-GAZETTE ed, but city leaders say it would help them make their case for The Little Rock School Board the project. LciiLdLivci This helps immensely, Lit- tiveT^msday'to attract'^$18 tie Rock Mayor Jim Dailey smi tentatively endorsed tax incen- lived lULUOUa)' tw ' . ' , . million Bass Pro Shops outdoor They are a key partner in this. ' A public hearing on the dis- Ro Ji
. trict is to go before the Little With a 5-0 vote, the board Rock City Board of Directors on gave initial approval to a pro- April 1. The Otter Creek Land posed redevelopment district Co. has offered Bass Pro Shops that would use tax-increment 30 acres west of the Interstate financing. Little Rock city lead- 30-430 interchange for an Outers want to use the financing door World Store. Legislation has been filed in the Arkansas General As- megastore to southwest Little method to help the company pay its debt on the project. Approval of the district by sembly making large retail de- the School Board is not need- See TAX BREAK, Page 3B Tax breaks pires, which could take up to builds nearby. 25 years in Arkansas. Hodges has said he hopes the Under the Bass proposal. Little Rock megastore would an- however, the school district chor a complex of restaurants, stores, banks and offices. Continued from Page 1B velopments such as the Bass Pro would begin sharing in the rev- store eligible for state tourism enue after the first three years, incentives now reserved for tra- and that amount would increase which Arkansas voters approved Past efforts to implement TIP, ditional tourist attractions. The throughout the life of the pro j- as constitutional Amendment 78 ! site requirements in the bill ap- ect. in 2000, have failed. Little Rock For the first five years of the leaders withdrew numerous TIP patently would lock out North i IF Little Rock, which has also of- redevelopment districts life, Bass proposals in 2001 after school of- fered Bass Pro a location. Pro will collect a higher per- ficials and others complained Tommy Hodges, president of centage of taxes than the school that the districts cheated schools Otter Creek Land Co., called district. out of revenue that flows from In the sixth year Bass Pro and increased property values. Thursdays vote an important mcreased values, first step. the school district will split the The proposed revenue shar- Without the School Board money evenly. From the seventh ing of the Bass Pro TIF appeared approval, I dont think the city year to the 15th and final year of to quell that concern among would move forward with the the redevelopment districts life, some School Board members TIF, Hodges said. Theres still the school district will draw a Thursday. a lot of work that has to be done. progressively higher percentage I think we did the right thing. If the district is approved. Lit- of the property's taxes. We just need to pay close atten- tle Rock would be the first city In the final year, it is esti- tion to this, board member Larin Arkansas to use tax-increment mated the school district will ry Berkley said. Its got some financing, known as TIF. The draw $1.1 million, with Bass Pro huge potential for the city, and method was first used in 1952 in drawing about $528,000. we dont want to stand in the California as a development tool Its a great deal for the school way of that. for run-down areas with declin- district, board member Baker Board members added that ing property values. Kurrus said. If it needs a boost they want to continue reviewing Once created, a TIF district and it helps the school district, the proposal as it moves forward captures increases in property Im all for it. to make sure it benefits the dis- values and funnels new tax rev- Otter Creek Land has given trict. enue toward improvement proj- 200 acres next to its proposed Were basically setting a ects within the district. Unless site to the Arkansas Game and precedent here today, said board otherwise negotiated, schools Fish Foundation, the nonprofit member Mike Daugherty. I want and other taxing jurisdictions get arm of the Game and Fish Com- us to be real careful with what the same amoimt of tax revenue mission. One commissioner said we do. I would feel uncomfort- they did before the redevelop- last week that a state nature cen- able giving anyone a carte ment district was formed. ter that had been headed for blanche on something like this. Usually the jurisdictions do North Little Rock likely would Information for this article was con- not benefit from the new prop- instead be built on the land do- tributed by C.S. Murphy of the Arkan- erty taxes until the district ex- nated by Otter Creek if Bass Pro sas Democrat-Gazette.March 1 9. 2 0 0 3 Reel em in For Bass Pro, TIF and Little Rock ERE S AN easy decision for Little it?would start sharing the revenue Rocks not always decisive board from its tax break with the school district of directors: after the first three years. And by the sev- . new Tax Increment Financ- enth year, the school district would be mg (TIE) district for southwest Little able to collect a lot more of the taxes on Rock so it can land an $18-milhon Bass the property. Pro Shopand all the business t-h--a-t--s AU the while, a Bass Pro Shop would businesses to southwest Little , L remember Rock, which would reaUy benefit if these the, ufr tiff over TIF districts a couple of 30 acres near 1-30 and 1-430 became a years back. Some city directors wanted to hub of economic activity. CTeate a TIE ^trict for the Proposed By the way, just what is a Bass Pro Sumnut MalL But plans for the mall got Shop? Or, in this case, an Outdoor World Store? Think of it as a giant, outdoor, toe TIE i^trict never got started, mainly super-Wal-Mart of sporting equipment because it sounded suspiciously like cor- Dozens of bass boats, hundreds of rods n porate welfare. A tax break for maU de- reels, aU under one roof. Better yet visit velopem after theyd decided on toe site? the Bass Pro Shop in Springfield, Mo., Huh-uh. And a tax break at toe expense and see what we could have raht cheer in of a local school district? Double huh-uh. Little Rock, Ark. But a TIF ^trict can be a good thing Little Rocks school board has already when It s used for the right kind of proj- approved this TIE districtunanimously, ect A store and busmess magnet like Now its in the hands of toe citys board of Bass Pro Shop IS toe right kind of project directors. You can reassure City Hall For sixers. Little Rock (Otter Creek, about toe benefits of this TIE district at a ^ecifically) is still trying to land Bass public hearing on April 1st. But this ought J ^^^onderS a Bass Pro 1JEgosh, to be a no-brainer, even for City HalL sounds like a fancy fishing boat doesnt Lets reel in that Bass Pro Shop.
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