North Little Rock is proposing to revive annual payments to the North Little Rock Economic Development Corp. more than two years after a Pulaski County judge ruled that such payments were unconstitutional.
State voters approved a constitutional amendment in 2016 to make it legal again for municipalities to allocate money to chambers of commerce or private economic development promoters.
A resolution being submitted to the City Council at its meeting Monday evening asks that North Little Rock enter into an agreement with the one-person Economic Development Corp. for $275,000, money that was previously budgeted for this year but wasn't ever allocated. The amount was included in the 2017 North Little Rock Electric Department budget.
For next year, the amount will be reduced to $200,000, city Finance Director Karen Scott said.
The city issued requests for qualifications Oct. 25 and received two replies in the allowed two-week response period.
The city selected "as the most qualified" the North Little Rock Economic Development Corp., the promoter previously used by the city. Todd Larson is the corporation's executive director and has a rented office in the city Chamber of Commerce building. A Virginia company, P3 Innovation Strategies of Chantilly, Va., was the other applicant.
In 2015, Pulaski County Circuit Judge Mackie Pierce ruled that Little Rock and North Little Rock could not legally pay their respective chambers or private entities for economic development services.
Pierce said in his ruling that the payments "clearly and totally" violated the Arkansas Constitution and that there was no proof of what services were provided to the cities.
The judge also said the cities used the payments to get around a constitutional provision that barred municipalities from paying private businesses without getting something in return.
In the November 2016 general election, state voters approved an amendment that in part changed the law so such entities could receive payments to support economic development projects or services.
Cities across the state have been renewing relationships with their respective chambers since the amendment took effect.
The Little Rock Board of Directors approved in April a $300,000 contract with the Little Rock Regional Chamber of Commerce.
North Little Rock hasn't continued an annual appropriation -- as much as $16,000 -- to the North Little Rock chamber, and never had a written contract with the chamber.
North Little Rock Mayor Joe Smith said last week that it "took us awhile" to draw up a request for qualifications since the law changed. Larson's work helping the city had continued, even without the city's appropriation, he said.
"During the past two or three years, when we weren't giving any money for that, [the corporation] had money in the bank and were able to keep our economic development progress going without more funding," Smith said. "I'm glad about continuing this progress because it's been very successful."
North Little Rock recently announced a planned $10 million investment by First Orion Corp. to build a five- or six-story building to complement a planned $4 million downtown, public plaza on Main Street and provide just under 200 jobs by January 2019.
The building will be near the $16 million Thrive Argenta apartments under construction.
The objective of the Economic Development Corp., Smith said, is to have someone "to get up every morning and work to make something happen."
"Having an individual with Todd's experience is invaluable because of his connections," Smith said.
North Little Rock paid $1.3 million from 2010-14 for economic development services, according to city Finance Department records. The payments were for $250,000 yearly 2010-12 and $275,000 yearly 2013-14.
The city issued requests for qualifications soliciting economic development services that would include: "Planning, marketing and strategic advice and counsel regarding job recruitment, job development, job retention and job expansion; Supervision and operation of city property used for economic development purposes; and, Negotiation of contracts for the sale or lease of city property for economic development purposes."
The resolution being proposed to the City Council includes in its attached contract a provision for a property management plan that says the city will provide by Jan. 31 a list of "property that is owned or controlled by the City and available for economic development purposes."
"Economic development has to be one of our top priorities," city spokesman Nathan Hamilton said. "The people expect it. They want the city's administration to work on bringing jobs to North Little Rock."
Metro on 12/10/2017