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Little Rock sales-tax package would steer $5.5M to downtown ambassadors program

by Joseph Flaherty | August 30, 2021 at 7:04 a.m.
Gabe Holmstrom, executive director of the Downtown Little Rock Partnership, speaks during a press briefing at Union Plaza in downtown Little Rock in this May 5, 2021, file photo. (Arkansas Democrat-Gazette/Staci Vandagriff)

Little Rock Mayor Frank Scott Jr.'s "Rebuild the Rock" package would steer millions of dollars to a downtown nonprofit group should voters approve a 1 percentage-point increase in the city's sales-tax rate on Sept. 14.

Under a spending resolution adopted by the city board this summer, officials plan to allocate $5.5 million of the new revenue from the increased sales tax to the Downtown Little Rock Partnership -- a tax-exempt 501(c)(3) group -- over the next 10 years for the expressed purpose of funding its ambassador program.

That sum is larger than the amount symbolically earmarked for the Museum of Discovery ($4.25 million) as well as for renovations to City Hall ($5 million) under the "Rebuild the Rock" resolution.

The largest slices of the new tax revenue would fund parks, public safety and infrastructure. The sales-tax increase is expected to generate approximately $530 million in new revenue over the tax's 10-year lifetime.

The Downtown Little Rock Partnership's ambassadors are meant to serve as a visible presence in the downtown area and wear bright uniforms. They pick up trash and work closely with the Little Rock Police Department, according to the Downtown Little Rock Partnership's executive director, Gabe Holmstrom, who said he picked up on the idea from other cities.

"When there are people causing an issue," he said ambassadors sometimes form relationships with them and can ask them to stop or move on.

Ambassadors will call the police if necessary, Holmstrom said Thursday by phone. Sometimes, at night, they will escort people to their cars, he said.

If people who are panhandling are seen going into restaurants, employees will call the ambassadors, he said.

Holmstrom said, "This is a way where they can be an immediate help as they're right there on the street to help, you know, deter some of this bad activity."

He said the organization has relied on as many as four ambassadors over the years.

Currently, the group is down to two, he said. One is employed via a contract with a security firm and the other is a full-time employee of the nonprofit, he said.

The city already provides a significant amount of money to the Downtown Little Rock Partnership.

In an email, city spokesman Spencer Watson said the total funding to the Downtown Little Rock Partnership in 2020 amounted to $196,994.92 -- a figure that includes specific contracts for events and programs such as the ambassadors.

So far this year, the city has provided $102,361.64 to the nonprofit group through August, Watson said. The sales-tax plan would provide $550,000 annually to the group for 10 years, he said.

In a follow-up email, when asked if the $550,000 would be disbursed to the Downtown Little Rock Partnership on top of the preexisting funding, Watson provided a response from senior mayoral adviser Kendra Pruitt, who confirmed it would.

Funding would follow on top of the $145,000 allocation budgeted for the group in 2021, Pruitt said.

"The Rebuild The Rock funding is specific to expanding the Downtown Little Rock Partnership's ambassador program," Pruitt said in the statement. "Ambassador programs have been used in cities across the country with a great deal of success. By putting additional people on the street, it will provide LRPD with additional eyes and ears, as well [as] give local businesses a direct, immediate contact in the event the need arises."

According to the nonprofit's most recent available Form 990 filed with the Internal Revenue Service, in 2019, the Downtown Little Rock Partnership reported just more than $771,000 in revenue.

A $550,000 annual contribution from the city would represent a boost equivalent to approximately 71% of the organization's 2019 revenue without accounting for the preexisting municipal funding.

Holmstrom said he expects "the vast majority" of the new funding would go to significantly expanding the ambassador program, but acknowledged his group is working off estimates right now.

In particular, the areas covered would be the River Market District, the Main Street business corridor and the Main Street neighborhood known as SoMa, he said. Holmstrom said the individuals will all be licensed security guards.

The 2019 Form 990 of the Downtown Little Rock Partnership listed zero employees of the organization.

When asked about the statement on the tax form, Holmstrom said he did not know why it listed zero employees. He said the group has four full-time employees, including himself, and zero part-time employees.

When asked for his annual pay, Holmstrom said, "I don't know that I need to answer that."

The Form 990 for 2019 said Holmstrom received zero compensation as the organization's executive director.

When asked if that statement was also an error, he said, "Yeah, I mean obviously that's an error, but I'd have to check with our accountant."

In an Aug. 16 news release, the Downtown Little Rock Partnership said its board of directors had voted to endorse the sales-tax package. The message did not mention the additional funding designated for the nonprofit group under the resolution approved by the city board.

"The Downtown Little Rock Partnership Board voted to endorse the penny sales tax not only for the benefits it includes for downtown, but for the city as a whole," Holmstrom said in a statement included with the release. "Little Rock needs to pass this tax to invest in our city and support growth."

Print Headline: 'Rebuild' tax to benefit nonprofit

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