FCRA boss believes all parties will be ‘professional’ in dissolution discussions

Editor’s note: This is the second of two stories about the future of the Fort Chaffee Redevelopment Authority. Link here for the first story.

Conflicts between Fort Chaffee Redevelopment Authority officials and regional city and county leaders have been public and often pointed. But FCRA Board Chair Dean Gibson believes all parties are interested in working together toward a positive dissolution of the authority.

Gibson and FCRA Executive Director and CEO Daniel Mann told Talk Business & Politics they are ready to sit down with officials from Sebastian County and the cities of Barling, Fort Smith and Greenwood to develop a transition plan toward dissolution of the authority that was created in 1997 to manage more than 6,000 acres of former Fort Chaffee property that was returned to the region by the U.S. Army.

GOLF COURSE
One of the controversies has involved the Deer Trails Golf Course, which the city of Fort Smith requested be deeded to them so it could stay a golf course. The FCRA board chose not to do so, though they did renew the lease agreement with the Deer Trails Country Club board of directors for another five years in 2023.

The FCRA board has stated publicly it wants to keep the golf course a golf course, but the property remains listed for sale. Mann has said he has kept it listed for sale because he has not been told to take it off the market. Gibson said during a Tuesday (April 2) interview with Talk Business & Politics that the property is not being actively marketed, and Mann agreed.

“I hate to close the door on anything. I feel the City of Fort Smith would feel the same way. If a great offer for a great economic development came in (on the golf course property), I think everyone would want to at least consider it,” Gibson said.

2% MERIT PAY
Another controversy is a 2% merit pay Mann receives on FCRA property sold. Developer Steve Beam, who owns property in the Chaffee Crossing area, filed a complaint with the Arkansas Real Estate Commission in which he alleges that Mann and FCRA may have violated state real estate licensing law. The complaint contends that the merit pay of 2% of the sale price of all real property transactions in which FCRA is the seller of the property as long as he is the CEO violates state law.

Beam said even though the 2% commission is listed as a merit pay instead of a commission it is still in violation of the Arkansas Real Estate Law. Commission on the sale of property is only to go the buying agent or selling agent in a real estate transaction in Arkansas, and the law stipulates that only licensed real estate can act as either a buying or selling agent.

Dalton Person, an attorney representing the FCRA, said the merit pay does not violate real estate law because Mann is operating within the duties of a political subdivision. The investigation is ongoing. Gibson said offering the 2% bonus made good business sense. It incentivized Mann to get the best price for the land, which is what the trust wants and is in the best interest of the four beneficiaries, while saving the trust the 8% commission they had been paying a real estate agent.

Accusations have been made at FCRA meetings, city board meetings, and on social media that the 2% bonus has led to unfair practices of FCRA repurchasing undeveloped land or requiring higher fees for extensions for developing in hopes of being able to repurchase land.

Mann said in the five years he has been with FCRA, the only property FCRA has repurchased is land the owners have come to FCRA and asked if they would buy back. Land is repurchased at the original purchase price plus the cost of any improvements made to the land, Mann said.

The FCRA Board has not yet passed anything that would require a specific amount be paid in penalties for not developing land in the time stated in the contract, but it is an item that will be brought before the board, Gibson said.

“We just want to make it a clear, fair process,” Gibson said. “Several members of the board have asked if we have anything specific we do. Our lawyer told us it was something we should consider.”

Gibson said the board had no desire to punish developers who are making progress but taking a bit longer than expected or specified in the contract. They are hoping to develop policies that will keep property from remaining undeveloped for years on end, he said.

“We are reasonable. We are going to work with people,” Gibson said.

SALARIES, TRUST ASSETS
The amount of money the trust has in its account and the amount it pays out in salaries was also recently addressed by Barling. Barling City Administrator Steve Core said in a March 29 city meeting that there is about $8 million in FCRA accounts. The FCRA financial report from Feb. 29 shows approximately $8.6 million in current assets. FCRA salaries are shown to be about $600,000 annually, Core said.

“That $600,000 (in annual salaries) will gobble up that $8 million,” Core said, noting that there has been talk that FCRA could continue for another 10 years.

Mann said annual salaries for FCRA employees have averaged $586,000 over the last five years, which is down from the $781,000 in salaries paid in average over the previous years.

“I think the trust staff pays for itself in the duties it performs. Some other entity would have to assume that (if the trust were to end),” Gibson said, noting that the beneficiaries would have to pay some of that expense if they were to assume control of remaining assets and property.

COMMUNICATION ISSUES
Representatives of the four beneficiaries of FCRA met Aug. 7 and agreed to a list of questions regarding the dissolution of the trust. An email was sent by Fort Smith City Administrator Carl Geffken Aug. 8, 2023, to Mann and the FCRA Board of Trustees with 10 questions about dissolution. The email was copied to Sebastian County Judge Steve Hotz, Fort Smith Mayor George McGill, Barling Mayor Greg Murray, Greenwood Mayor Doug Kinslow and Barling City Administrator Steve Core.

The questions went unanswered for seven months.

On March 4, Mann sent an email to Geffken, McGill and the Fort Smith Board of Directors answering those questions after he learned about a dissolution resolution on the board’s agenda. But the length of time it took for answers to be sent did not sit well with many on the Fort Smith Board who passed a resolution asking for Mann or Gipson to attend a future board meeting or study session.

“I’ll take full responsibility for the seven months,” Mann said regarding not responding sooner. “I’ll do everything I can as directed by the trustees to sit down and work with these folks to help them understand certain things because I don’t believe that they clearly understand.”

He said there are many things involved before and during dissolution, including selling the remaining land, honoring contracts with buyers, routine maintenance on the grounds and long-term financial obligations of the trust. To name a few, the trust owes the Arkansas Department of Transportation money for some work on Highway 255.

“The discussion needs to be ‘Let’s look at what’s left and what is it going to take from a proactive approach instead of a reactive response, to do those,’” Mann said. “We need to look at where our monies should go in order to speed things up and maximize the benefit for the community.”

Gibson said the FCRA board does not dislike any other entity, though some personally don’t like what is being said publicly about them. He and Mann both agree that in the end FCRA and the beneficiaries can agree on what needs to be done.

“If the Beneficiaries and FCRA could meet and come to an agreement regarding dissolution, that would be far better for the Beneficiaries and Chaffee Crossing,” Geffken said.

Geffken said a meeting between the beneficiaries and FCRA could bring about a positive resolution to the public actions and statements, echoing what Mann said.

“We all get along. I believe we are all professional, and I believe that at the end of the day, we all want the same thing,” Mann said.