Fort Smith, A&P seek to amend convention center agreement

The city of Fort Smith and the Fort Smith Advertising & Promotion Commission may enter into a short-term agreement to operate the Fort Smith Convention Center until there is resolution — up or down — on a 1% prepared food tax.

A 1% prepared food tax was enacted Feb. 24 by the Fort Smith Board of Directors to resolve a more than 10-year search to plug an annual convention center operating deficit predicted to occur when state turnback money dried up. The state turnback program ended for Fort Smith in June 2010 from which the city received about $1.8 million a year. The tax was to go into effect June 1, with the Fort Smith Advertising & Promotion Commission to incorporate management of the center into its overall tourism and marketing program.

However, a legal battle that ensued after the city found insufficient a petition effort to force a vote on the tax has delayed collection of the tax and implementation of a lease agreement between the city and A&P. The lease agreement was set to begin today (July 1).

“The enactment of the prepared food tax is currently in abeyance. I believe it’s still in the city’s best interest for the A&P Commission to operate the convention center. The A&P Commission is willing to do so, provided the city pays the operating costs,” Fort Smith City Administrator Ray Gosack wrote in a memo to the Fort Smith board.

Under the amendment, the city would pay the A&P about $61,000 per month from the convention center’s reserve fund of $826,146 (as of May 31). The amended lease agreement, if approved by the A&P Commission and city board, would be in effect until a 1% prepared food tax is implemented or until Nov. 30, 2011.

The A&P Commission has a special meeting set at 2 p.m., July 5, at Miss Laura’s Visitor Center. If the commission approves the amendment, it will be on the agenda for the city board meeting scheduled for 6 p.m., July 5.

The staff recommends approval of the lease amendment,” Gosack noted in the memo. “This will provide for operation of the convention center by the A&P Commission while implementation of the prepared food tax is in abeyance. If there’s any questions or a need for more information, please contact me.”

If the 1% prepared food tax is pushed to an election and rejected by voters, the entire agreement between the city and A&P will require a second look.

“The city and the A&P will have to re-evaluate the relationship to determine the best way to operate the convention center under that condition (voter rejection of the tax),” Gosack told The City Wire.

Also on Friday, Frankie Hamilton retired after more than 16 years managing the convention center — a facility that grew from a small civic center built in 1966 to a modern convention center expansion funded with a half-cent tax approved by voters in 1997. More than 100 attended a Friday morning retirement ceremony and reception — held at the convention center — for Hamilton.

Claude Legris, executive director of the Fort Smith Advertising & Promotion Commission, will assume duties as convention center manager, even without a formal agreement in place.

“The transition of the convention center management to the A&P Commission is the direction we’ve been moving for the last several weeks, and I saw no reason to abandon it because of a 4-day gap between Frankie Hamilton’s retirement and the board’s meeting schedule. July 5 is the board’s first meeting following the court ruling,” Gosack explained.