Supporter of downtown development bill promises return

A bill that would create a 20% tax credit for construction in a central business improvement district may be dead, but it will be resurrected in the 2010 or 2011 Arkansas General Assembly, according to Greg Nabholz.

Nabholz, CEO of Conway-based Nabholz Properties, also was a key advocate in helping Rep. Tracy Pennartz, D-Fort Smith, attempt to get HB 1060 a place in the Arkansas economic development toolbox.

HB 1060 — approved by the Arkansas House but failing to get out of a Senate Committee — sought to create an investment tax credit for renovation and development in central business improvement districts in Arkansas. The investment tax credit would be equal to 20% of the first $1 million of qualified rehabilitation or development expenditures incurred for a qualified project. The bill allows for up to $10 million in tax credits to be allowed annually.

BEEBE FACTOR
Opposition from Gov. Mike Beebe, who believed the $10 million hit on state revenue was too much, sank the bill in the Senate.

Nabholz said Beebe’s support of economic and tourism development has been remarkably progressive and aggressive, but that Beebe should have supported HB 1060.

“The problem is, this bill got lumped in with all the other tax exemption bills, although this one is really an economic stimulus bill,” Nabholz said. “He (Beebe) needs to be on board. I firmly believe he gets it. He has a great track record in economic development and for downtown things like this. But I think unfortunately he listened too much to DF&A (on 1060).”

COOL PLACES
Nabholz, who serves on the board of the Conway Downtown Partnership and on the board of Argenta, a downtown Little Rock development group, said Arkansas communities can improve their ability to recruit new jobs and a talented workforce by investing in their downtown areas. Nabholz cited the past few years of renovation in Conway’s downtown area as a reason Hewlett-Packard chose to locate a 1,200-person operation about 3 miles away from downtown Conway.

“The only way we can do that (attract young, talented professionals and good-paying jobs) is to create the cool places to live,” Nabholz said.

HB 1060 was needed because renovation and new construction is often more expensive in a downtown area. A downtown parking deck to encourage or support commerce could be built with retail and office space on the first floor and parking space on the upper floors. “In many cases,” Nabholz argued, the 20% tax credit might be what provides financial feasibility for the parking deck.

BROAD SUPPORT
Support of HB 1060 from more than 60 chamber, city and trade associations is an indication of the belief that investment tax credits generate more return to the Arkansas economy than the $10 million in tax revenue losses, Nabholz said.

One of those supporters included John Castro, director-location incentives group with Cushman & Wakefield. Castro is working on the opportunity analysis survey that could help secure private dollars in the effort to develop more than 85 acres of Fort Smith riverfront property.

Castro noted in a letter of support for HB 1060: “With the ability to include ‘Arkansas Investment Tax Credit Opportunities’ as part of our National Marketing Campaign for The RIVER Fort Smith Project, our Project Team will not only assist Fort Smith, Arkansas in procuring ideal prospects for this development but will also use the newly passed HB 1060 to proactively market the entire State of Arkansas as a cost-competitive state in which to invest in capital projects and to create jobs and long-term opportunities.”

A version of HB 1060 will return in the 2010 or 20111 legislative session, Nabholz said. And in the next round, Nabholz hopes to have more than 200 chambers, cities and other groups supporting the effort. He also hopes to have Beebe’s support.

“It’s going to come back, and it’s going to come back bigger and better,” Nabholz said. “We have to, if we want to see our economies continue growing, we have to see Arkansas cities reinvest in the downtowns and the hearts of the community.”