Director Seeks Joint Bond Issue

Proposal Would Fund Arts Center, Park, Amphitheater

— The Advertising and Promotion Commission’s executive director wants city officials and commissioners to jointly help pay for Walton Arts Center renovation, a regional park and a permanent venue for the Arkansas Music Pavilion.

Marilyn Heifner proposed selling $23.7 million in bonds to pay for the projects in a letter this week to commissioners. The two bond issues would be repaid using both the city’s and commission’s share of a 2 percent hotel, motel and restaurant tax.

At A Glance

Town Center Bond Issue

Voters approved a nearly $7 million bond issue to pay for the Fayetteville Town Center in 1997 by a 1,755 to 1,549 vote. The bonds were refinanced in 2003, and all associated debt is set to repaid in October 2015 using the Advertising and Promotion Commission’s half of hotel, motel and restaurant tax proceeds.

Source: Staff Report

Mayor Lioneld Jordan said Friday he appreciates Heifner’s proposal to use commission money to help build the regional park, but doesn’t want to tie the city’s hands by going into long-term debt to pay for the park.

The mayor said a fixed bond payment over 25 years would inhibit the city’s ability to make other parks improvement using its share of the hospitality tax. The city also would have difficulty finding a way to maintain the park, Jordan said. He estimated maintenance costs for the more than 200-acre park at $425,000 annually.

“That’s a $28 million park. Where am I going to get the rest of the money for it,” he asked.

Using preliminary figures from Stephens Inc., Heifner estimated $11.3 million could be generated by extending voter-approved bonds used to build the Town Center. The bonds are being repaid with the commission’s share of the hospitality tax.

After paying off the Town Center debt and bond issuance costs, Heifner predicted $9.8 million would be available for projects. Of that, $6.5 million could go to the Walton Arts Center, as center officials requested in December. Heifner said Friday remaining money could be put toward the final two phases of the regional park, which has been planned off Cato Springs Road for years.

Since 2002, the city has accumulated roughly $4.5 million for the regional park through its half of the hotel, motel and restaurant tax. That’s nearly enough to begin construction on the park’s first phase, but a far cry from the $27.7 million Parks and Recreation administrators think it will take to build the park as planned.

Heifner suggested the city sell bonds for regional park construction, including a large amphitheater and associated infrastructure that could accommodate the Arkansas Music Pavilion. She suggested the city use part of its half of the hospitality tax to pay the bond debt.

She said sports tournaments at the regional park and concerts at the pavilion would increase tourism and, thus, replenish the tax.

Like the commission, the Parks Department expects to receive about $2.5 million in hospitality taxes this year. The money goes into a park development fund along with green space fees collected from new development. The budget for the fund in 2013 is $3.1 million. More than half of that money is set aside for operation and maintenance. An additional $563,000 will go to the regional park, and $700,000 is budgeted for improvement to Wilson, Walker, Gulley and other community parks during the next five years.

Heifner suggested the city put $733,000 each year for the next 25 years toward a $12.4 million bond issue. Added to the $4.5 million on hand, that would be enough to pay for soccer fields, baseball and softball diamonds, the amphitheater and infrastructure in the first three phases.

By comparison, the commission uses $675,000 of its share of the tax repaying Town Center debt each year.

Connie Edmonston, park director, said last week she first envisioned the amphitheater as a larger version of a pavilion at Gulley Park — with seating in a grassy area nearby. Edmonston said she welcomed plans for a larger amphitheater from any outside organization.

Beth Bobbitt, public relations manager for the Walton Arts Center, which owns the pavilion, said last week that infrastructure costs associated with the regional park site make it an unattractive location for the concert venue. The pavilion is temporarily at the Washington County Fairgrounds while arts center officials search for a permanent home. It’s unclear how their viewpoint would change if infrastructure were in place.

The arts center has also asked the commission for $2 million from its reserve to help renovate its building on Dickson Street.

Paul Becker, finance director, said city officials are devising a plan for how to pay for the park. Ideas, so far, include selling naming rights for the park, seeking private donations and dipping into general fund reserve, which has grown to more than $12.5 million.

The mayor and city officials have made no formal request for commission money to help with the project. The commission will discuss Heifner’s proposal at a regular meeting Monday.

Commissioners, City Council members and, ultimately, voters would have to approve any new bond issue that uses hotel, motel and restaurant taxes.

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