TEXARKANA -- The new owner of Texarkana's Arkansas Convention Center made a pitch for a fresh financial partnership with the city Advertising and Promotion Commission.
At the commission's quarterly meeting Thursday, James Naples requested $200,000 a year and a rebate of hotel and restaurant taxes collected at the convention center. The three commissioners in attendance tabled taking any action on the request.
Naples stressed that he wants to build a mutually beneficial relationship with the commission and city. Making the convention center a success will require partnership, he said.
"It's something that we don't feel like we can afford to do by ourselves. ... I think if there's some type of joint venture with the city and A&P, that we can accelerate the programs that we're starting now and then continue with them, and I think everybody would be pretty happy with them," he said, touting sales and marketing efforts that have attracted more than 2,500 visitors to the convention center in June and July.
"You guys need help, we need help, and that's why we're here today. I think the request is fairly reasonable given the rate of return it's going to have. We also want to partner with the city. Anything the city brings, anything they help us get, anything that we need help getting, we're going to cost share it with you. We're going to pay the expenses, we're going to split the profits, and it's a way to help you get some of this money back you've spent on this project," Naples said.
Financial transparency is a top priority, he told the commission.
"This will be handled a little different than it was handled with the last owners, OK. This money all goes into an escrow account with strict accountability back to you to where the money's being spent. I mean it's only going to be spent on the convention center and the furtherance of the city. I have no desire to take this money and run with it," Naples said.
Tim Johnson, a commission member and city director, expressed optimism about the city's relationship with Naples.
"I think that this proposal that you have here, it makes me very excited as to the potential of the things that we can see take place here. I certainly hope that we can see a way to work some kind of partnership with you," Johnson said.
Naples bought the convention center in April for $6.55 million. The convention center's previous owner, Texarkana Hotels LLC, a company owned by Hiren Patel, filed for bankruptcy in April 2016 to avoid foreclosure of the property by MidSouth Bank, which was owed millions in unpaid loans.
Naples has asked a bankruptcy court to reconsider its ruling denying him certain tax benefits the commission awarded Patel. A hearing on the matter is scheduled for September.
Chief Judge Brenda Rhoades ruled that annual payments of $84,800 to the convention center from the Advertising and Promotion Commission will continue. The payments began in 2014 and are scheduled to end in 2020.
However, the judge denied the assignment of $150,000 annual payments negotiated between Patel and the commission, which began in 2011 and were to continue for 15 years. That agreement also included rebate of any city hotel and restaurant taxes the convention center paid during those years. Rhoades ruled the rebate will not transfer to Naples.
At Thursday's meeting, the commission voted to recommend a new procedure for collecting the 3 percent hotel and 2 percent restaurant taxes it is in charge of allocating, including how to handle tax delinquencies. A city ordinance enacting the changes will now go before the Board of Directors for a vote.
Commission attorney Josh Potter developed the new system after researching what other Arkansas cities such as Little Rock and Conway have done, he said.
Anyone conducting business subject to hotel and restaurant taxes would need a permit from the commission to operate and would be required to file a monthly return showing gross receipts. The commission would have power to examine business records to determine the returns' accuracy.
A business delinquent in paying its taxes would incur late penalty fees and risk losing its permit. If the delinquency continued, the commission could take action in court to stop a business from operating until full payment is made.
State Desk on 07/23/2017