A Little Love For Downtown Arkansas

In last year’s legislative session, several efforts were made to advance the agendas of downtown redevelopers. Not all the measures passed.

This year, a more united yet disjointed effort will be made to urge the passage of five new laws – all aimed at encouraging more economic investment in downtown redevelopment.

Talk Business sources confirm that a "package of bills" won’t be introduced, but a loose coalition of developers, planners and proponents of reinvestment in downtowns will get behind 5 significant pieces of legislation this session. Only one of the bills has been filed so far.

HB 1118 by Rep. Tracy Pennartz, D-Fort Smith, is her second effort to create a tax credit for the rehabilitation and development of older buildings in central business improvement districts.

Pennartz’s bill creates a 20% investment tax credit for projects between $50,000 and $1 million within those districts, which typically exist in larger downtown communities. The credits could be used to renovate older buildings that don’t qualify for historic tax credits or to build new ones. Currently, the bill is parked in the House Revenue and Tax Committee.

Downtown renaissance supporters will also mobilize behind four other concepts that are expected to be filed as legislation before a March 7 filing deadline. The four measures include:

STAR bonds – Sales Tax Revenue (STAR) bonds are a long-term financing mechanism where an area of a city or county – such as an entertainment or retail district – can enact a local sales tax which pays back the bonds used for infrastructure improvements, property acquisition, or site preparation. The idea is that tourists to a region pay the bulk of the sales taxes.

Innovative financing for rail, rivers and trails – Supporters are looking at existing laws on the books and experimental efforts in the other states to find creative ways to secure financing for light rail projects, river ports, and bike and hiking trails.

Creation of tax-exempt arts districts – This initiative would involve prohibiting or limiting income taxes and sales taxes levied on businesses making and selling artistic goods within a district’s boundaries. Proponents argue that the ancillary businesses and traffic that comes from these arts enterprises – for instance, potters, painters and such – would more than offset the tax breaks.

Arkansas "Great Places" program – Modeled after Iowa, a "Great Place" program could better market cultural destination areas in the state. Downtowns typically house strong artistic and cultural businesses. A more coordinated tourism effort for these creative communities could be an economic boon for downtowns.

You can learn a little bit more about the coalition efforts for these bills from a newly created web site, www.downtownarkansas.org.