Highlights of the Fort Smith Board of Directors Meeting 9/27/22

The Fort Smith Board of Directors study session meeting was led by Vice Mayor Rego in the absence of Mayor McGill. Director Morton was also absent and Director Catsavis left at 8pm before the final agenda item.

The meeting began with discussion of the proposed amendment to the Unified Development Ordinance concerning mini-storage buildings. The changes are based on changes proposed during the 6-28-22 Board of Directors meeting. The amendment will allow for mini-storage facilities to only be permitted in Industrial Light, Industrial Moderate, and Industrial Heavy zoning districts (currently they have been also allowed in Commercial Heavy districts). Approval by both the Planning Commission and the Board of Directors will be needed for all mini-storages. There will also be added stronger design requirements for mini-storages including roof and wall articulations, a decorative 8 ft high screening wall, and limiting vehicle storage to only the rear of the site. Wording will be added for separate listings for indoor climatized facilities and for outdoor non-climatized facilities.

Director Catsavis inquired if there would be a grace period for mini-storages that are already in the process of receiving rezoning or permits. Planning Director Rice answered that there was not, that those still only under review would need to meet the new regulations. Director Settle asked how many are pending currently. Rice answered 3, two that would be in Commercial Heavy districts and one that would be a Planned Zoning District ( 2 on Remington Circle behind Doug’s and 1 climatized facility on South Waldron near Randall Ford). Director Martin said “I feel good about this” in reference to letting those 3 facilities be grandfathered in. Directors Settle, Catsavis, and Good agreed.

Director Catsavis expressed concern about the added costs the new rules would have for developers. He said he is “not usually one for more rules and regulations”. Director Rego said that he is not in favor of the changes and called them a “solution in search of a problem”.

The amendment including grandfathering in the 3 facilities already in the approval process will be voted on at the October 4, 2022 Board of Directors meeting.

The Board discussed the proposed change to the Unified Development Ordinance that would strengthen wording concerning time limits on beginning development for projects that received zoning changes. These changes were previously discussed at the 6-28-22 Board meeting. For conventional rezoning the requirement would be that unless construction is started or a building permit is issued for a development within 24 months the development plan will be considered abandoned (triggering a reversion to the previous zoning). For properties with a change to a planned zoning district (PZD), construction will need to begin or a building permit will need to be issued within the time stated in the project booklet and if that does not occur in time a new project booklet will need to be submitted and go back through the approval process before development can begin. The Board of Directors will also be given the authority to impose a time limit in addition to any set by the Planning Commission.

Director Rego mentioned that sometimes zoning change is requested by a developer and things fall through and extra time is needed to get back up and running. He expressed worry that it might be “putting undue burden” on property owners and expressed doubt in his support for the measure saying “I don’t know.”

Director Settle expressed that he did not want properties to be able to be rezoned then sit empty for years and then the developments that they were approved for are no longer appropriate for a neighborhood that has changed around them. Director Rice said that zoning is in perpetuity, so zoning decisions should be made based on being appropriate for the property regardless of the developer or the project. Director Settle voiced his view that the Board should have the ability to place a time limit if they deem it necessary, not just Planning, and that that part of the amendment was “one item at least we should approve that one item”.

Director Catsavis sought clarification on if the amendment would affect being able to sit on property long-term (like for purposes of speculative investment). Rice clarified that the change would not be a factor unless the property owner initiated rezoning. Just holding on to a property would not change at all.

The Board heard a presentation from Fort Chaffee Redevelopment Authority Executive Director Daniel Mann about the current land availability at Chaffee and the FCRA’s future plans through 2024. Of the 7000 acres deemed excess after the military base closure, 5,104 were conveyed to the FCRA for sale. The remainder were conveyed to various entities for “public benefit” and have been used for the I-49 expansion, Janet Huckabee Nature Center, the landfill, and Ben Geren Park. In 2002 the FCRA established Master Development Guidelines for things like building design, landscaping, lighting, and signage.

There are currently 1523 acres still available. 914 are within the city of Fort Smith and 200 of those are not suitable for development. Those undevelopable acres are planned to be used for outdoor recreation amenities like public open space and nature trails A total of 2,232 acres have been sold. 539 of the are already fully developed. 392 are partially developed. 929 are undeveloped. 372 are not developable. 1, 183 were conveyed at no cost rather than sold. Of those conveyances 289 went to Fort Smith for economic incentive projects including ACHE, Graphics Packaging, Glatfelter, Umarex, Mars Petcare, and Phoenix Metals and for projects including Fire Station 11. The future dog park will be conveyed.

There have been $268,364,398 in total public contributions to Chaffee Crossing with $140 of that coming from the federal government (mostly for I-49), $40,913,896 coming from the state, $72,463,238 coming from municipalities (primarily Fort Smith), $943,470 from the county, and $14,043,794 from the FCRA property sales.

Based on data from property owners, $2.3 billion in capital investments have been made at Chaffee Crossing. Mann pointed out that that is an 8.5 time return on the public dollars invested. 2021 was a record year for capital investments with $431 million invested (dominated by Mars expansions). Between $200-250 million in capital investments are predicted for 2022. 2021 was also a record year for property sales with over $5 million sold. It is predicted that 2022 will be another record year with an estimated $5.5-6 million in sales. Chaffee has brought in $21.8 million in new property taxes since 2011 with $3.9 million of those going to Fort Smith.

4132 total jobs are projected for Chaffee. Currently there are 3484 jobs at Chaffee. The top job types are 47% in the commercial/retail industry, 30% are in manufacturing, and 8% are in education. Mann spoke about the suffering our community felt when Whirlpool closed down and how at peak Whirlpool employed 4500 people in 2006 and only had 917 employees at its final closure in 2012 and that the estimated impact of losing that 917 on the local economy was $56 million. The growth at Chaffee has generated 4-5 times that, and the job numbers are nearly a recovery of the lost jobs.

Mann gave the residential development at Chaffee major credit for its impact on the Air Force’s Foreign Military Sales program decision to choose Fort Smith. $737 million in capital investments have been made in housing. 42% of the housing developed or in the process of being built currently are single family homes. There are predicted to be a total of 5000 housing units at Chaffee soon, providing (based on averages) housing for 12,500 people.

The historic district, strategically planned to help encourage development on the east side of I-49, has been a challenge but is improving. In 2020 it became a planned zoning district and an entertainment district. Chaffee hosts 40+ community events per year including a successful and growing monthly Farmer’s Market. There are historic and cultural facilities including the Elvis Barbershop, Chaffee History Museum, and Veterans Memorial.

Director Dawson said “FCRA has done more than any regional or government board to provide economic growth to our area”. She added that in discussions with the top 5 major contributors to the Chaffee community she heard high praise for the FCRA and for Mann.

Director Catsavis voiced criticism for the FCRA saying “It seems to me there are some internal issues out there that need to be addressed”. He inquired who does the appraisals for FCRA. Mann responded that they don’t use appraisals citing the quickly changing market and focus on creating value and looking for development projects that fit the vision for Chaffee Crossing. Catsavis asked why the FCRA’s $4 million in the bank isn’t being distributed to the trust’s beneficiaries. Mann responded that the money is for long term financial obligations including $1 million for trails, $1 million for the Department of Transportation, the dog park, and costs related to the 825,000 SF distribution center that will be built in Barling in October or November.

Catsavis asked about the attendance of members of the Board of Trustees at meetings. Mann answered that they have not been short of quorum but that there are currently 2 open seats on the Board. One member resigned as a result of taking a new job and Chancellor Riley resigned based on growth at the University of Fort Smith and plans to focus more on legislation efforts in Little Rock.

Catsavis asked about the FCRA’s payroll. Mann answered that it is currently at its lowest since 2010 with being $531,000 for 5 people including himself.

Catsavis asked when the FCRA intends to be done. Mann answered that he predicts looking at property sales that the FCRA will be finished in about 3 years. In response to Director Settle saying that there will eventually be a “time to start figuring out how to get this thing back to just a piece of land”, Mann said that is “exactly what we’re doing”. Mann said “ We’re here to work ourselves out of a job”. He mentioned the reduction in FCRA employees from 12 to 5 and the FCRA no longer leasing any properties. He also mentioned that the obligation to maintain and keep open for military use 5.2 miles of FCRA owned railroad track as a challenge in the organization's winding down stages.

Catsavis asked if Chaffee business owners are encouraged to attend FCRA meetings and if public comments are allowed. Mann responded that meetings are announced as public meetings and that public comments were instituted as a part of the meeting in the last 2-3 months and are for commentary on the agenda items only. Director Martin criticized the meeting time as a cause for lack of participation saying the “3:30 time slot for me is terrible”.

Director Catsavis ask how the FCRA Board of Trustees positions are filled. Mann explained the process of application, interview, vote by the FCRA Board, and final appointment by the Quorum Court. Director Settle expressed a preference for having beneficiaries of the trust have a say in who is on the board, suggesting a board made up of 2 members from each beneficiary (Fort Smith, Barling, Greenwood, and Sebastian County) and one at-large member. Dalton Person, legal counsel for the FCRA, said that there is a provision in the irrevocable trust that stipulates beneficiaries cannot be be involved in the day to day governance or management of the trust. Settle argued that membership on the Board of Trustees isn’t involvement in the day to day governance and said “FCRA should not appoint its own members”

Director Dawson expressed that she does not feel changes to the Board of Trustees policy are necessary and that corporations don’t allow the public to pick their board. Director Settle argued that the difference there is private companies versus a public trust. Dawson said that with the FCRA’s positive impact on the economy “ours is not to question if the board is operating as well as it should. According to the data it’s being very efficient.”. Director Martin said that the success should not be connected to the oversight in that way. He also expressed worry about conflicts of interests and challenges having property owners on the board and a desire for checks and balances on the board. Dalton Person said in his view having a property owner on the board is no different than a member of a municipal board living in the district they represent. He also mentioned that the public trust operates on different procedures and restrictions than a municipality calling the FCRA “our own unique construct that has been rather successful for the last 20 years”. Mann clarified that the Board of Trustees does not make any decisions regarding tax dollars, only reinvestment of money from property sales.

Director Martin asked about the property repurchase procedure mentioning that he’s heard about different unequal experiences regarding extensions on time to develop property and costs for extensions. Person responded that over 50% of the sold properties are not yet developed and that there is no set process but rather a careful evaluation of properties on a case by case base and working with owners on extensions but that the FCRA’s mission to ensure economic development sometimes leads to enforcing the contracts’ repurchase clause to prevent speculators just sitting on land. Mann added that 95% of extensions applied for are granted.

Director Martin asked how many lawsuits the FCRA is currently involved in. Person answered 3. Director Dawson added “less than our Board is facing”.

The Board discussed the recent denial by the Eighth Circuit Court of Appeals of the City’s appeal concerning the consent decree and whether the City should appeal the case to the US Supreme Court. The appeal being denied means that the City will be required to repair or replace all sewer pipes rated 4 or 5 on the National Association of Sewer Service Company scale. If the City had won the appeal, Fort Smith stood to save $140 million.

Director Settle voiced his opinion that if the City is going to appeal the Board should vote on that. He suggested that the issue be put on the agenda for next week’s meeting as a resolution directing the administration to file an appeal.

Director Rego mentioned that Paul Calamita, Fort Smith’s attorney for the consent decree issues, said that there would not be a high likelihood the case would be taken up by the Supreme Court. Rego asked about the cost of the appeal. Administrator Geffken responded that the main costs if the Supreme Court would hear the case would be the costs of flying the counsel, staff, and consultants to Washington DC. Director Settle said in support of filing an appeal “It’s third and inches. If we ask and they don’t take it we’ve done everything we could” and “If you don’t ask you do not know.”

The issue will be added to next week’s Board meeting agenda.