Resolution supporting tax credit group gets Baker veto

Fort Smith Mayor Ray Baker has vetoed a resolution of support for a Fort Smith Housing Authority project that seeks to use a federal tax credit program to fund development projects in low-income areas of the Fort Smith region.

The Fort Smith Housing Authority is preparing to establish itself as a Community Development Entity (CDE) to bring the development potential of New Markets Tax Credits to the region. New Markets Tax Credits were created by Congress in December 2000 for the purpose of funding commercial, retail and residential projects in low-income regions. (Link here for a more detailed explanation of the program.)

The city board on June 1 voted 6-1 to issue a resolution supporting the CDE, with City Director Andre Good opposing. Good’s opposition was based on the CDE’s potential use of eminent domain. However, CDE officials later agreed to withdraw all provisions related to eminent domain and instead bring such a request to the city board in the event it becomes necessary.

“Yes, this addresses my concerns with eminent domain. Thank you so much for taking this back to the table!,” Good noted in an e-mail to Ken Pyle, director of the Fort Smith Housing Authority. “I wish you and the Fort Smith Housing Authority great success with this endeavor.”

Mayor Baker was not appeased. He thinks city staff should be the entity managing the New Markets Tax Credit.

“I am very disappointed that the City Administrator or his staff did not bring this item to the attention of the Board of Directors,” Baker noted in his veto statement (see below for the complete statement). “We have a paid Administrator and staff whose responsibility it is to be up on such programs.”

Baker’s veto also includes an allegation that the Housing Authority CDE helps only a few.

“I urge the Board and City Administration to actively become a part of this program and not wait for projects that will be brought to the Board for approval, thus continuing to benefit only a few,” according to Baker’s veto statement.

Pyle said all other groups have been excited about the tax credit potential, and finds unfortunate the Mayor’s superficial objections.

“The thing that is disappointing about this is that I can’t find a single factual basis for his veto. It’s all about feelings,” Pyle said.

As to Baker’s allegation that the Housing Authority’s involvement would benefit only a few, Pyle was quick to respond.

“That’s a question you need to ask the Mayor. He needs to answer that question. … That’s just crazy.” Pyle said.

He said the recent $2 million-plus Nelson Hall Homes project benefited many area contractors, suppliers and vendors. He said Harry G. Barr Co. manufactured many of the windows.

“If you know anything about the Nelson Hall project, you know that it injected millions of dollars into our economy. … The (New Markets Tax) credits will do the same. Frankly, the Mayor just doesn’t understand how this can work and how it can help the entire region,” Pyle said.

The city board will vote on Baker’s veto at its June 15 regular meeting.