How Economic Development Money Can Be Used, A Primer

With all the discussion around the developer, TR LLC, requesting economic development money from the city- I thought it'd be a good idea to break down Ordinance No. 2358 which outlines how these funds can be spent. For the whole she-bang, I'm attaching the pdf of the Ordinance below. Then I'll try to explain it in non-legal jargon.

Ordinance No. 2358.pdf

Download PDF • 426KB

First, a very abbreviated overview. The city collects taxes and then uses that money for different items the city needs. These funds are typically assigned to certain areas they can be spent through an ordinance. An ordinance is a formal law or regulation enacted by a local government authority, such as a city council or county board, to govern local matters. The one we're discussing today is the Economic Development fund that has been heavily discussed lately in city council meetings and on social media.

Now, the ordinance referenced clarifies how that money can be spent in Section 4 (a):

So, under this ordinance the money can be used for the following,

• stimulate the local economy;

• create private-sector job opportunities; or

• accomplish both goals.

Based on that language, economic development money could reasonably be used for:

• Infrastructure serving a development, such as water, sewer, drainage, roads, utility extensions, access improvements, or site preparation.

• Preparing property for redevelopment, including demolition, environmental work, clearing, grading, and removal of obsolete structures.

• Business recruitment and expansion, including projects that attract a new employer or help an existing employer retain or add jobs.

• Publicly owned buildings or facilities tied to economic activity, such as industrial buildings, airport hangars, business parks, or workforce-training facilities.

• Land acquisition, buildings, equipment, or improvements connected to qualifying economic development projects.

• Professional economic development services, such as engineering, planning, appraisal, recruitment, feasibility studies, and project administration.

• Downtown or commercial redevelopment projects when the city can document that they stimulate investment, reuse vacant property, generate sales-tax revenue, or create jobs.

• Matching funds for state or federal development grants.

Arkansas law recognizes land, buildings, infrastructure, equipment, facilities, and improvements used for the development, retention, or expansion of qualifying businesses as economic development projects.

That's a simplified overview of how that all works and how it may be used in the future for any projects that come before the council. So, if you or someone you know are going to start a business, expand a business, or have an idea please run it by the city. The money is there to better our community and if you have a business that meets the qualifications it would be great to hear about it.