Bill and Hillary Clinton National Airport/Adams Field will appeal a Pulaski County Circuit Court ruling that says the state's largest airport owes the county $450,000 in property taxes.
"This is an issue that could well affect far more than the airport," Bryan Malinowski, the airport's executive director, said in a briefing Tuesday to members of the Little Rock Municipal Airport Commission, which oversees the commission.
Circuit Judge Alice Gray sided with Pulaski County Assessor Janet Troutman Ward's office, which billed Clinton National for the property taxes on what at the time was three vacant buildings.
The judge's decision came in an appeal by the assessor's office of a March 2, 2018, ruling by Barry Hyde, the county judge for Pulaski County, that the airport was entitled to the tax exemption. The airport had filed the exemption paperwork on Oct. 13, 2016. Ward's office denied the request on Oct 27, 2016.
As county judge, Hyde, who isn't a lawyer, is the jurist for county court, which is the venue for certain cases, including those involving property taxes.
The airport's attorneys had argued that the buildings, which include a parcel that once housed a Hawker Beechcraft facility that customized its line of business jets, were public property used exclusively for public purposes. Under Article 16, Section 5(b) of the Arkansas Constitution, such property is exempt from taxation.
Gray agreed that the buildings were public property but also agreed with attorneys for the assessor who argued that the buildings were not being used exclusively for public purposes.
Even though the buildings were vacant, Gray said the properties were being marketed to private companies.
"While it is possible that the three properties at issue in this case also served some other public purpose, they are still taxable because they must have an exclusively public purpose to be exempt from taxation," the judge said in her ruling on Dec. 27 of last year.
Typically, airport property is subject to property taxes when the building is being used by a private entity, such as Hawker Beechcraft. That company vacated the building in 2013 after it filed for bankruptcy protection.
The airport's requests for property-tax exemptions on two other properties, the former Southwest Airlines reservation center and the former Carrier building, also were denied.
The airport has since found tenants to lease much of the Hawker Beechcraft complex, as well as the former reservation center.
In a memo to the commission, Malinowski said Gray's decision "would be problematic for all public entities that hold properties which are subject to revenue generation from private leases.
"Counsel for both the airport and the city believe Judge Gray's ruling is contrary to law and are committed to appeal the decision to the Arkansas Court of Appeals, where we expect the county court's ruling to be re-instated. At a minimum, the decision will clarify this contested matter of law."
The airport is being represented by the Little Rock law firm of Taylor & Taylor after the assessor's office objected to the airport's regular attorneys, Cross, Gunter, Witherspoon & Galchus, participating in the case. The assessor's office said the airport's law firm had a conflict because it worked on the employee handbook for the county.
Clinton National has paid Taylor & Taylor a total of $32,159.08 over three years for the firm's work on the case, according to Shane Carter, the spokesman for the airport.
Bill Walker, a former state senator who was appointed to the airport commission this month to replace Jesse Mason, said he would like Taylor & Taylor to brief the commission when appropriate because the case could set precedent.
"This has far-reaching implications for cities and counties across the state -- school districts and all of that," he said.
Metro on 01/22/2020