Fort Smith Board of Directors places RITA on notice, terminates River Valley Sports Complex

The Fort Smith Board of Directors approved an intermodal port study, overruled the city’s planning commission on a new business development, and terminated its contract with River Valley Sports Complex at Tuesday night’s (Feb. 7) meeting.

The intermodal port study was brought to the Board at last Tuesday’s (Jan. 31) study session by the Western Arkansas Regional Intermodal Transportation Authority (RITA). At the time Fort Smith City Director Tracy Pennartz voiced concerns over RITA’s $40,000 request for help in funding the $200,050 contract with John Vickerman of Virginia-based Vickerman & Associates.

Pennartz was hesitant to move forward since the already cash-strapped city had not set aside any funds for the expense in the 2017 budget. But as Director Keith Lau noted, “it’s a small investment for a potentially large return.” Pennartz joined Lau, the other five directors, and Fort Smith City Administrator Carl Geffken in agreeing it was “now or never.”

Vickerman has worked as consultant on 67 of the 90 North American deep water ports, including two of the largest in New Orleans and Chicago. The study could take up to nine months to complete, at the end of which Vickerman will put a call out for requests for expressions of interest (RFEIs) to find a developer, who would then theoretically bear the cost of building any resulting infrastructure.

If RFEIs fail to attract a viable developer, the city would “reconsider its support” of RITA, Geffken said to the Board’s agreement. Geffken told Talk Business & Politics after the meeting the RFEI process will run for an additional nine months, giving RITA essentially 18 months left to produce a result.

Marty Shell, owner of Five Rivers Distribution, which manages port operations in Fort Smith and Van Buren, told Talk Business & Politics that while the study could be great for economic development, “I am glad the Board wants to have clawbacks on it as well.”

He continued: “I’m all for growing the pie and making this area a better place, but I do think there needs to be a cutoff that says, ‘How much time are we going to give this RFEI to get a response back’ and ‘Are we going to stop funding RITA or continue to fund RITA going forward?’ I think this Board is concerned about taxpayer dollars, and I think they addressed the issue they needed to address.”

As a private developer, Shell did not feel using the study to attract an outside developer would be unfair to his business, and that overall, “I think it’ll help the whole industry, because these are federal government dollars being spent; it’s subject to the Freedom of Information Act; and this is stuff I can use myself that I’m not having to pay for.”

“If somebody wants to spend $300 million to develop a 150-acre site they don’t own the land on that’s in a flood plain, I’ll make them a hell of a deal on the port I’ve got,” Shell added.

The city of Fort Smith has contributed $239,000 to RITA funding over the last six years and budgeted $40,000 for 2017. RITA is funded annually in equal amounts by five organizational bodies — the Fort Chaffee Redevelopment Authority (FCRA), the cities of Fort Smith and Van Buren, and the counties of Sebastian and Crawford. Sebastian is the only body yet to approve the $40,000 expense. Included in the scope of services for the Vickerman study will be $8,610 for data collection; $70,000 for a target market assessment; $39,000 for a conceptual terminal development plan; $37,440 to prepare the RFEI; and $45,000 for RFEI solicitation and outreach. While the study calls for an additional $40,000 from each body, the final tally will come closer to $32,000 thanks to leftover grant money from the city of Van Buren on a prior study.

In 2009, RITA received $375,000 in state funding to study options for intermodal port operations in the Fort Smith-Van Buren area. In 2012, the body voted to sign a cost-sharing agreement with the United States Army Corps of Engineers to move forward with the feasibility phase of the Northwest Arkansas Regional Port (formerly known as Lavaca Slackwater Harbor). That report was completed in December 2013.

RIVER VALLEY SPORTS COMPLEX
Also Tuesday, the Board decided to terminate the River Valley Sports Complex contract after three years of missed deadlines and $1 million in land improvements. Geffken said other parties have expressed interested in finishing the softball fields the RVSC would have overseen and he would be pursuing dialogue with Board approval.

The Board voted unanimously to terminate, with Director Mike Lorenz stating the Board had been “excessively patient” with RVSC organizers, Sen. Jake Files, R-Fort Smith, and Fort Smith businessman Lee Webb, also chairman of the Arkansas Economic Development Commission (AEDC).

The pair were administrators for the project and were using mostly in-kind services, private donations, and a director-approved $1.6 million contribution from the city to advance the complex. At a previous study session, Webb acknowledged the project’s many missed deadlines as a frustration, but also observed the draw schedule had not caused the city to be out any funds in excess of the agreed-upon milestones.

When asked by Director George Catsavis to provide a hard deadline, Webb said he could give an “arbitrary” date, but he did not want to continue the cycle of projecting completion dates that could not be met.

“I feel like we’ve been getting the same information for nearly a year now,” Director Lorenz responded. “We’ve had assurances before, and I feel like there’s not an overall game plan that says, ‘Here’s our finish date, and here’s how we’re going to get there.’”

Webb and Files entered into the agreement with the city in 2014 with a target completion date of June 10, 2015. Substantial completion after the second extension pushed the next date to July 22, 2016 with an opening day of July 31. After missing that deadline, other dates followed — one in mid-October 2016 and one in mid-December. Neither Files nor Webb were present at Tuesday’s meeting.

GUSANO’S PIZZA
Lastly, developer Rodney Ghan won an appeal on a previously rejected request for a zoning change and variance. The Board’s override on the city planning commission’s 5-1 vote against — fueled by some area residents’ opposition — will allow Ghan to push forward on additional parking at 4605 South P Street in order to accommodate existing commercial buildings.

The development will be home to a Gusano’s Chicago-Style Pizza and an existing tanning/salon and laser treatment facility. Ghan said he is also in the discussion phase with an Asian bakery. If that deal goes through, it will leave a fifth and final slot open among the 10,400 square feet of space. Ghan will have invested $2.2 million in the buildings and parking lot once construction is complete. This number does not include any additional private investment the businesses themselves have made or will make to become operational.