Two weeks after pushing through a $4.925 million bond issue for upgrading and expanding the North Little Rock Municipal Airport, Mayor Joe Smith is pulling back on his plans and will ask the City Council today to repeal its approval of those bonds, according to new legislation.
An ordinance filed Friday to add to the City Council's meeting agenda today also will allow council members to vote their expected approval for $10.875 million for the city's planned Justice Building, which will be the new headquarters for the city's Police Department and courts.
The individual bond amounts are for $10 million for the police and courts and $4.5 million for the airport, with the excess amounts to cover fees and required reserves.
"This repeals the ordinance that was passed Aug. 26 and replaces it with authorization to issue bonds only for the police and courts building and to withdraw the authorization to issue the $4.5 million bonds for the airport improvements," City Attorney Amy Fields said Friday.
What the City Council passed, 5-4, on Aug. 26 -- with the mayor casting the decisive fifth vote -- combined both of the capital improvement revenue bond issues under one ordinance as Series 2019A and 2019B. The four council members who voted against the legislation had asked to split the two bond issues into separate pieces of legislation, and even unsuccessfully tried to amend that ordinance.
Smith had argued then that splitting the two bond issues would cost the city an extra $30,000 only to let some council members "say they voted against it."
Smith then asked the city's airport commission to hold a special meeting Aug. 30 to fast-track lease agreements with an aviation company that operates out of the city airport hangar ahead of the end of a 30-day referendum period required after the City Council's approval. After conferring with the city's bond counsel just prior to that meeting, Smith conceded that things needed to slow down concerning the airport project.
"When you get in a hurry, you make mistakes," Smith said late Thursday afternoon, ahead of filing the new legislation. "So I'm going to stand down. It will cost us more money, bond-wise. I'm not going to borrow some money knowing I can't come back with a lease that makes me happy. So we'll go back and split them up.
"I don't think we can do a long-term lease on buildings that we have bond indebtedness on," he said. "I haven't gotten final word from our bond counsel on that. So I'm not real comfortable with it."
Smith said that tying the two bond issues together means that any delay in the airport project's bonds could jeopardize moving forward with the new Justice Building, which is scheduled to start construction as early as November.
"We can't wait on the justice center," he said.
Issuing bonds for the $30 million police and courts facility wasn't the issue, council member Debi Ross said Friday after receiving the notice of the special call addition to today's agenda. Ross, Beth White, Linda Robinson and Jane Ginn voted against the combined bond issues Aug. 26.
"We are all in agreement on this one," Ross said. "There's never been a question about the Justice Building needing completion. This one [the new ordinance] to me is just a no-brainer.
"I'm glad we get to vote on them separately," she said. "It's what we asked for in the first place."
The airport bond issue was to pay for improvements including a new general aviation center, a corporate aircraft hangar and expanded parking at the city's airport at 8200 Remount Road. The project also includes space for a $1.125 million restaurant that the airport would lease to the locally owned Homer's restaurants, which would own and manage the establishment as a private business.
The lease issues in question focused on the North Little Rock Jet Center, the fixed base operator that manages the city hangar. The center sells fuel and performs other services for private and corporate aircraft and leases space for corporate jets.
The existing lease, in place for 20 years, doesn't expire until March. The proposed lease would be for an initial term of 10 years with two options for extension of 10 and five years. The annual rent is $32,943, adjusted for the cumulative consumer price index every five years. The lease also carries a provision in which the city pledges that it won't sell aviation or jet fuel.
At the Aug. 30 commission meeting, some in the airport community voiced objections to the length of the lease, the annual rent amount, the provision to prohibit the city from selling fuel and the rushed time frame.
Smith didn't speculate on when the airport project would return to the City Council for discussion, or how adding the restaurant would be affected. The airport commission isn't going to take up the lease agreements again until its October meeting, Fields said.
"I was trying to get them all together to save money, and we didn't have enough time to negotiate a lease with the [fixed base operator] and the restaurant," Smith said. "These are both kind of built-to-suit kind of leases and are a lot more complicated. As I've gotten into working on these leases, I can't make it happen in the amount of time I need in order to get the money for the justice center."
Metro on 09/09/2019
Print Headline: Airport bonds' repeal vote set; bill splits funding for North Little Rock building