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El Dorado revitalization owes a lot to 1-cent tax

by I.C. Murrell | September 18, 2023 at 2:48 a.m.
Paul Choate

Editor's note: This is the second of a two-part series examining El Dorado's improvement of its quality of life as Pine Bluff approaches a sales tax election.

EL DORADO -- When Bill Luther first moved to El Dorado in 2004, the city did not have a Murphy Arts District.

That's the entertainment hub of this city of slightly less than 18,000 that brings in big-name acts like rock band Foghat, which is coming later this month. The district was established in 2017 thanks in part to a $10 million contribution from a 1-cent El Dorado Works tax, which voters approved in 2015 as a vehicle for capital improvements and cultural events. State and private funding also contributed to the district's creation.

"How that was developed, I think, was critical to the successful passage of the tax," said Luther, president of the El Dorado Chamber of Commerce. "We had two focus groups, and we had it at the Conference Center. It had a wide spread of the community in it."

The tax was seen as an extension of a 1-cent tax approved in 2007 that focused on economic development. In total, the sales tax in El Dorado is 9.75% -- including the state's 6.5% rate, Union County's 2%, and 1.25% in the city.

That's less than the total 10% sales tax in Pine Bluff, including 1.5% for Jefferson County and 2.25% for the city. Presently, Pine Bluff imposes a five-eighths-cent tax for capital improvements and planned entertainment additions such as a Sixth Avenue and Main Street Plaza, the Delta Rhythm and Bayous Cultural District and a go-kart track, as well as educational and entrepreneurial initiatives under a public-private plan called Go Forward Pine Bluff.

Voters in Pine Bluff rejected a renewal of this tax during a special election in May, many of the naysayers citing a lack of transparency over how the tax dollars are used. But city council members have moved to return the item back to the ballot for a Nov. 14 special election, along with a three-eighths-cent tax aimed at supporting Pine Bluff's fire and police departments.

The five-eighths-cent tax will sunset Sept. 30, 2024, unless it's renewed at the polls. The three-eighths-cent tax has no sunset date.

The 1-cent tax in El Dorado will sunset in 2025, and the city has undertaken improvements across the city.

"It's the friendliest place I ever lived," said Luther, a Madison County native and retired Entergy employee. "I've lived in Beaumont [Texas], Lafayette [Louisiana], New Orleans, Forrest City. I had several jobs in Little Rock."

El Dorado's Southern charm has been celebrated with a No. 1 ranking as USA Today's Best Small Town Cultural Scene in 2021. On a Tuesday afternoon, townspeople could be seen frequenting the many small shops and restaurants in the Union Square area, the centerpiece of the city's downtown.

At the Union Square is a guest quarters consisting of 23 suites and 17 luxury suites, according to A train trolley converted into a small restaurant called Off the Rail is also located downtown.

The entire area, Luther said, is the strongest selling point of El Dorado. Having a strong arts district and a scholarship plan for El Dorado High School graduates to attend college for free (or almost free) doesn't hurt the little town, either.

"We're becoming a healthcare destination," Luther said. "What's spurring that along is that they've taken a hospital from for-profit to a non-profit where the margins would remain in upgrading the facility and expanding it and modernizing it."

Paul Choate was elected mayor late last year and sworn into office Jan. 1. He's been an owner of an insurance agency in the city since 1991, and he's charged with helping the city maintain and appropriate funding for a wide range of services, including public works (for which 32% of the 1-cent tax is used), construction and maintenance (20%), economic development (15%) and festival city development (12%), among others.

"We started out 17 years ago trying to do a countywide sales tax," Choate said. "The county voted it down, so the city pulled it into a city [tax measure]."

When the tax was instituted, Choate said, a 10-year return of about $50 million was anticipated. Choate expects that total to surpass $60 million before the tax expires.

"A big part of it, just a few years back, internet sales became taxable in the state of Arkansas. Amazon, being one of the largest, was one of the first ones who said, we understand our obligation. We will collect the tax, and from that point on we saw a bump," Choate said. "We've got a 1.25 percent sales tax, and when you add the extra 1 percent, 2.25 percent is not an excessive city sales tax."

After more street work to be done, Choate anticipates $12 million to $14 million left over, with another $10 million to be generated. Those funds, he said, will be spent for the betterment of the city.

The city has used $3 million to construct the South Arkansas Expo Center on about 25 acres of donated land to the city. The tax has also benefited a sports complex just east of El Dorado that includes eight baseball fields, a pavilion, campsites and two regulation-size soccer fields.

Potential projects are brought forward to an El Dorado Works board that is a five-person public committee of city government and are either recommended to the full city council or rejected.

"It's very transparent because you have to go before the El Dorado Works board and present your pitch with what you're using it for," Luther said.

Go Forward Pine Bluff projects are discussed privately among a board of directors before they are revealed publicly to the city council. The measure has met 80% of a $35 million public sales tax goal and 91% of a $35 million private fund goal as of Sept. 5, according to data provided by Go Forward CEO Ryan Watley.

"For that project to work in Pine Bluff -- my opinion is you need to define the purpose of the money, spend the time to analyze where you need to spend that money and make sure the taxpayers understand you will honor that obligation," Choate said. "I think it's critical you have a firewall between the money and the city council."

  photo  Bill Luther
  photo  The Murphy Arts District in El Dorado is pictured Tuesday, Sept. 12, 2023. (Pine Bluff Commercial/I.C. Murrell)
  photo  Union Square in El Dorado, pictured Tuesday, Sept. 12, 2023, includes a guest quarters and several small shops and restaurants. (Pine Bluff Commercial/I.C. Murrell)

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