U.S. Marshals Museum supporters looking for nine-month one-cent sales tax

by Tina Alvey Dale (tdale@talkbusiness.net) 2,218 views 

Updated rendering of the planned U.S. Marshals Museum under construction in Fort Smith.

The U.S. Marshals Museum will go before the Fort Smith board of directors Tuesday (Dec. 11) to ask for a special election to ask the voters for a one-time, non-renewable, nine-month one-cent sales tax to finish the project and allow for the opening of the museum in late 2019.

A presentation to make the request is on the agenda for the board’s study session, scheduled for noon Tuesday at the Fort Smith Public Library.

“With only $17 million left to raise, it’s time to ensure the USMM legacy is established as an anchor for economic development and impact in Fort Smith, as well as a hub for civic literacy across the city, the region, and the nation,” supporting documentation for the request included in the board packet for the meeting states.

Construction of the museum formally launched in July.

Museum budget figures place the total project cost at around $49.266 million, down almost $10 million from estimates two years ago. The previous figure included over $5 million in land donations. Adding those back into the budget places the total project cost around $54 million, with the museum picking up about $4 million in savings through a design retool and value engineering, it has been previously reported.

The museum will feature five immersive galleries: Defining Marshals; The Campfire: Stories Under the Stars; Frontier Marshals; A Changing Nation; and Modern Marshals. It will also include a National Learning Center, Hall of Honor, conference rooms, general office space, retail space and a large lobby for community partnerships. Additionally, it will feature an exterior dining area, green-space, full-service restaurant, and a monument donated by the Five Tribes. Los Angeles-based Thinkwell: The Experience Co. are designers of the exhibit and will use subcontractors for the installations.

To date, nearly $35.4 million has been raised in cash, pledges and in-kind land. Of that, 54% came from Fort Smith/Van Buren and 23% came from the state of Arkansas, information provided to the board of directors said.

“The majority of (the funding) is because of the vision of philanthropic individuals and organizations in this area who believe in what the USMM will mean for Fort Smith through its educational programming and economic impact,” museum provided documentation states. “The USMM building currently under construction, including the USMM campus and Hall of Honor has been funded through cash and pledges receivable currently in play. There is $17 million left to raise including an allocation for interest on potential loans that will not be necessary with public support.”

The museum is asking for the board to approve the appropriate ordinances that would set a special election for March 12 for a one-time, non-renewable, nine-month only, one penny sales tax, which would be levied beginning July 1 and would expire permanently March 31, 2020.

The United States Marshals Museum Foundation would pay the city’s cost for the special election.

The approximately $15-$16 million revenues the tax would generate would go to finish the remainder of the USMM project, the information stated.

Fort Smith Mayor-elect George McGill, who takes office on January 1, 2019, said he wants more information on the proposal before taking a position.

“I’m waiting for details and giving it thought,” McGill tells Talk Business & Politics.

“The revenue from the requested sunset tax will be used to fund the production of the museum experience (exhibits), FFE (Fixtures, Furniture & Equipment), startup costs, working capital/cash reserves, and remaining contingency,” the supporting documents said.

The supporting documentation for the request also states that a Public Facilities Board comprised of community residents will own the USMM building and grounds and it will be outside of the control of the City of Fort Smith Government.

“The Arkansas Constitution and law enacted by the Arkansas Legislature require that public funds (proceeds from a Gross Receipts or Sales Tax) be expended for public purposes. If expended for a facility, the property may be owned by a ‘Public Facilities Board’ (PFB),” the documents said.

The PFB will be created by an ordinance passed by the board of directors, and that PFB would purchase the USMM building and grounds from the U.S. Marshals Museum, Inc., for the amount derived from the one penny sales tax for nine months.

The value of the building and grounds will be about $22 million, $7-8 million more than the estimated proceeds from the sales tax.

“The PFB, as owner of the Museum building and grounds, would lease these to the USMM. It would hold the USMM accountable for the performance of its many public purposes in education, economic, downtown, and riverfront development, and more. The rights and obligations of the PFB and the USMM would be spelled out in legally enforceable contracts,” the documents said.

Furthermore, the USMM board of directors would operate the museum, and neither the city nor the PFB would be responsible for future operational expenses of the museum.

“The people of Fort Smith value their historic downtown, their connectivity to their Marshals Service past, and see the significance of preserving their culture for future generations. Economic benefits to downtown revitalization, riverfront development, and the national recognition flowing from having the Museum in Fort Smith are powerful reasons why we’re asking for consideration of a limited-time, special sales tax. We’ve asked the City Board of Directors to carefully study our request and decide on sending this issue to the voters,” said Jim Dunn, president of the U.S. Marshals Museum Foundation.

The USMM will operate on a $2.5 million annual budget. Current projections cap annual fundraising needs at $600,000 with the remainder of the required revenue being earned through admission, retail and food and drink sales, facility rentals and special programs and events, including spring and summer camps.