FORT SMITH - The Fort Smith City Board of Directors will gather in a special meeting Monday night to consider granting special incentives and industrial revenue bonds to an unidentified company who is considering locating a facility in Fort Smith.
Because the city signed an agreement of non-disclosure, the firm is referenced as “Project Platinum” in city documents and memorandums.
“The current request is on behalf of [Project Platinum], who plans to build a new facility in Fort Smith, Arkansas by investing $38,000,000 in new manufacturing equipment and construction of buildings. The proposed project could add up to 150 jobs to the region.” Deputy City Administrator Jeff Dingman said in a memo this week. “The Tax Back program is a state and local sales tax refund incentive to attract business growth or expansion to Arkansas. The incentive applies to capital purchases associated with construction of new facilities or expansion of existing facilities (such as equipment or building materials) and does not apply to ongoing purchases. The majority of the incentive will be derived from the state sales tax rate. However, in order to participate in the program, the local governments must also agree to the sales tax refund.”
Dingman goes on to say that the company anticipates building a 100,000 square foot facility to accommodate their plans. The value of the proposed industrial revenue bonds would be equal to the $38,000,000 that the company plans on investing.
“Because the equipment and building purchased with the bond proceeds is technically owned by the city through provisions the state’s Municipalities and Counties Industrial
Development Revenue Bond Law, the real property and equipment is exempt from property taxation.” Dingman went on to say in the memo. “However, [Project Platinum] would make annual payments in lieu of taxes in the amount of 50% of the normal taxes due for a period of ten years. The payments would be distributed to the school district, the county and the city in the same fashion as property tax payments are distributed. The bonds are not general obligations of the city. They are payable solely by [Project Platinum] and the city bears no responsibility to pay them.”
The request to the city was initiated by the Fort Smith Regional Chamber of Commerce and the Arkansas Economic Development Commission.
