AG: Hospitality tax money may support UA project

Arkansas Attorney General Dustin McDaniel said Tuesday (Oct. 23) he believes Arkansas law would allow the Fayetteville Advertising & Promotion Commission to provide financial support to a planned performance hall renovation at the University of Arkansas.

The UA needs the project — the historic men’s field house to be transformed into a beautiful 600-seat concert hall — to hold performances squeezed out of their rightful place at the Walton Arts Center.

University of Arkansas Chancellor G. David Gearhart has asked the commission to consider gifting $1 million to the project over three years. Total cost is about $17 million. Gearhart told the commission that the venue would bring more visitors to the area, thus more HMR taxes to collect.

The Fayetteville A&P sought McDaniel’s opinion on Gearhart’s request.

Gearhart has argued that the need for the UA to have its own performance venue stems from tight booking at the Walton Arts Center, where UA faculty, student and various musical and vocal ensembles have been conducting many of their concerts and recitals. The only other venue is the 60-plus-year-old Stella Boyle Smith Concert Hall, which seats just 238 for some 300 concerts a year. It’s time the university had its own updated performance venue, Gearhart has said.

The UA Board of Trustees voted Sept. 7 to renovate a 1930s field house into a 650-plus-seat performing arts center and to name it for Jim and Joyce Faulkner, a Little Rock couple who gave $6 million toward the $17 million project.

Questions submitted to McDaniel by Rep. Uvalde Lindsey, D-Fayetteville, were:
• Is it permissible in any manner for a city to use its advertising and promotion tax income to contribute to the renovation of an arts venue for a state university?

• Can the Fayetteville Advertising and Promotion Commission commit to assist in financing this project over a three year period?

In his seven-page response letter Lindsey, McDaniel said he is not “fully informed of all the material facts,” but believes the A&P Commission may donate hospitality tax revenue to the UA project.

“Of course, a court of competent jurisdiction with full access to the facts may reach another conclusion; however, I believe that would be unlikely,” McDaniel noted.

Continuing, McDaniel advised: “As a general proposition, however, on the basis of the facts supplied and assumed, it appears likely that one or both of two provisions of the relevant statute would permit the proposed use.”

However, McDaniel also advised on a big-picture financial decision.

“Local officials should examine a city’s fiscal affairs in each instance to determine whether a given commitment is consistent with the constitution. The whole of the city’s revenues, contracts, and allowances, not just those of the A&P commission, must be considered,” McDaniel wrote.

Link here for a PDF of the McDaniel letter.