Ad hoc group formed to study convention center issues

The Fort Smith Board of Directors approved names for an ad hoc committee Tuesday night that is charged with coming up with funding and/or operations options for the Fort Smith Convention Center.

Citizen members of the committee are:
Tom Caldarera, restaurant owner
George McGill, businessman/insurance
Kevin Moran, Sparks Health System
Lavon Morton, ABF Freight System
George Moschner, Baldor Electric Co.
Craig Rivaldo, Arvest Bank
Ben Shipley, attorney
Steve Williams, University of Arkansas at Fort Smith

The board is asking the committee to consider options to correct a looming funding shortfall once about $1.8 million from a state turnback program ends in June. The board is also requesting the ad hoc group report back within 6 weeks.

City Director Gary Campbell said all those appointed were first contacted to see if they could or would serve. Campbell also said the board is not providing the ad hoc group a list of options to consider, rather the ad hoc group is expected to look at the issue with fresh eyes and bring ideas and options back to the board.

BACKGROUND
More than 13 years ago city voters approved a $55 million package — through a half-cent sales tax — to build a modern convention center, modern library facilities and to build the first phase of a master riverfront plan. One of the selling tools was that the state would funnel about $1.8 million a year in turnback funds to the newly expanded center through 2010 to pay off bond debt and support operations.

The city’s portion of the state’s tourism turnback funds are set to expire in 2010. The received around $1.8 million annually from the turnback program. Between 2001 and 2007, the city collected $13.23 million in turnback funds, with $4.36 million of that used to help pay down the 1997 sales and use tax bond debt. Proceeds from turnback funds between 2008 and 2010 are estimated at $4.47 million.

A partial solution to the issue is to merge the management of the convention center and the Fort Smith Advertising and Promotions Commission. That process is underway with both parties tentatively agreeing to the merger.

The cities in Arkansas that have successfully merged tourism and convention center operations have done so with revenue from a prepared foods tax — aka, hamburger tax. Fort Smith has in place a 3% tax on hotels with which the A&P collected $803,591 in 2008. That amount is not near enough to cover A&P and convention center operations. A 1% tax on prepared foods in Fort Smith would generate between $1.5 million and $2 million annually. Fort Smith is the only large tourism city in Arkansas without a hospitality tax on restaurants and other prepared-food providers.

Other options that have been considered include instituting a business license fee that could collect up to $1.9 million annually, and asking voters to readjust the 1% street tax so that a certain percentage goes to the convention center and quality of place projects. The street tax collects between $17 million and $20 million a year.