FORT SMITH -- During its regular meeting Tuesday, the Fort Smith Board of Directors gave the go-ahead to lend a hand to local industry.
The board voted to adopt an ordinance, as well as an accompanying emergency clause, authorizing the issuance and sale of up to $110 million in industrial development revenue bonds on behalf of Mars Petcare U.S. Inc. and its project to expand its facility at 10000 Roberts Blvd. in Chaffee Crossing.
Fort Smith has tried to regain manufacturing jobs since 2011, when the unemployment rate in the city reached nearly 10%. In 2011, one of the city's largest employers, Whirlpool, moved its operations out of Arkansas to facilities in Iowa, Ohio and Mexico.
At its height, Whirlpool employed about 4,500 people in Fort Smith. By the time it closed, only 850 people worked for the company in Fort Smith.
The unemployment rate in the Fort Smith metropolitan area has gone down steadily during the past several years. It was 3.6% in September, according to the U.S. Bureau of Labor Statistics.
In 2016, state officials went to Fort Smith to celebrate when Mars Petcare announced its expansion.
At the ceremony announcing the expansion, Gov. Asa Hutchinson referred to the closure of Whirlpool when he said, "We've more than made up for that loss."
In addition to $400,000 from the Quick Action Closing Fund, an incentive program run through the Arkansas Economic Development Commission, and $100,000 for worker training, Mars will receive tax rebates from the state, commission Executive Director Mike Preston has said.
Deputy City Administrator Jeff Dingman said the city adopted a tax-back resolution for the benefit of the expansion project in 2017. The project itself is complete, with Mars Petcare being ready to proceed with issuing the bonds for it.
Mars Petcare, according to Dingman, has indicated that 130 full-time jobs would be added to its existing workforce as a result of the expansion. To this point, with the completion of the project, most of those jobs have been added.
"The average wage is $25.92 per hour," Dingman said. "This increases Mars Petcare's local employment by 64%."
In a memo to City Administrator Carl Geffken, Dingman wrote that the primary advantage of industrial revenue bonds is the reduced property taxes on the project.
In accordance with the payment in lieu of tax agreement that is also authorized by the ordinance, Mars Petcare will pay the equivalent of 50% of the normal property taxes for a period of 10 years.
The language of the ordinance includes approvals of the necessary trust indenture between the city and the trustee, and the lease agreement between the city and the company.
Dingman said in his memo that Mars Petcare will be solely responsible for the debt service payments of the bonds, with the city having no obligation to make bond payments.
"Staff recommends approval of the attached ordinance," Dingman wrote. "This $110 million investment supports the board's stated priorities and the economic development objectives of the city's comprehensive plan related to fostering economic development and job creation in Fort Smith."
State Desk on 11/20/2019