I shared yesterday restaurateur Mark Abernathy’s critique of a plan for the Little Rock Board of Directors to vote next week on calling a bond issue election to pledge the two-cent hospitality tax to a bond issue of up to $73 million for a much-needed renovation of Robinson Center, the WPA-era auditorium/music hall that has been our city’s primariy small road show/performing arts space since forever.
Abernathy felt, for one thing, that things seemed to be moving quickly. About two weeks from a vote by the Little Rock Advertising Promotion Commission on the plan until a vote by the City Board to call the election. He followed up on his note yesterday with some further comments, worth mentioning because I talked a bit with city convention bureau leader Gretchen Hall on some information I couldn’t get yesterday. Said Abernathy:
I agree that Robinson Auditorium has to be dealt with. … [but] we have not had a chance to review it and discuss alternatives. Unfortunately, they don’t want to allow anyone the time to do that. … You need to know that this will only affect my business because I’ll lose customers that are pissed off because I took a stand on this. … That is exactly why most people in my industry won’t stand up. … They promised to include us and keep us in the loop but they have done the opposite. If this huge project was funded by the general city sales tax there would have been months of meetings, public hearing, input from the public and feedback from interested parties.
There’s more. But you get the drift. I’m sympathetic. I prefer pay as you go. Opening Alltel (now Verizon) Arena with no debt was wonderful. Same thing for the Statehouse Convention Center expansion, paid by a general temporary sales tax. I’m sympathetic, too, because — good as the Robinson redesign looks, there’s something in me that wishes for an even grander public project. I was just in Iceland, where Reykjavik, not as big as Little Rock, has a new architectural treasure of a concert hall. Could/would local taxpayers pay for a monument? If they could be sold on the intrinsic value and the many benefits — see Sydney, Australia’s opera house — maybe. But this is Little Rock. I’m a realist. Also, see the plans. This isn’t just a touchup of a dreary, hard-to-use facility with out-of-compliance elevators and escalator. It’s a reimagining, It will open the north side to the river with glass walls and new event space, for one thing.
I think — today and in this city and state — a countywide sales tax for Robinson would be a longshot. (It would be fair, given the arena.) But any new sales tax in tough economic times hits poor people hard.
Mark is a little off in indicating this arose suddenly. It’s been under study — and heavily reported — for more than two years. Using the hamburger tax to support a bond issue has been a potential financing mechanism mentioned almost from the beginning. And, realistically, it’s the most politically palatable. The recent commission vote, in the view of most who participated, was just the logical next step after the preliminary design and cost estimates were in.
Use a city sales tax? The city sales tax is only producing about $21 million a year. A new temporary one-cent levy would take four years, counting some short-term borrowing to pay for the project, estimated at $68 million. It would be a tough sell to poor people. Nobody thinks a countywide tax stands a chance. That leaves the hamburger tax. It produces about $11.5 million a year. The bond issue necessary for this project will take almost half of it, about $3.8-4 million a year. ((About $2.4 million a year is currently going to the original convention center bond issue, but is about to end.) Over 30 years, that means some $50 million could go to interest charges. But that’s the way bond financing works. You get your money upfront for instant construction. You do pay with future dollars, which typically are worth less, and interest rates are pretty low these days.
Abernathy isn’t convinced. He suggests, for one thing, a blend of hamburger tax money with a temporary sales tax. And he continues to have his long-held objections to the city’s focus on projects centered downtown.
For the next 30 years every time you order a hamburger, a soft drink or a steak you’ll be paying for tens of millions of unnecessary interest. Tens of millions that could have been spent on something that benefited West Little Rock taxpayers and restaurants….the ones who pay most of this tax. How would you feel if you were a West Little Rock restaurant or hotel and had to watch your customers’ tax money go to fund another huge downtown project without having any input in the decision? Especially when most of the money is already spent downtown. Now you have three A & P commissioners that own businesses downtown who will benefit disproportionately from this.
These are good people doing bad things. It’s disappointing because they know better but don’t have the courage to simply say….”You know we screwed up, we need to slow this down and let everyone get a good look at this before we take it to a vote.”
Abernathy is a survivor in a tough business, a participant in many a good civic project and not afraid of standing up. So I’m happy to give him a platform. I just don’t know if I’m ready to join him on the ramparts.