Retail incentives bill stalls after hearing on 'Project X' and public opposition

Senate Bill 493 was presented to the Agriculture, Forestry & Economic Development committee as a proposal to expand the state's list of economic development projects to include facilities for retail sales of goods. Benny Westfall of Fort Smith described a confidential "Project X" that he said would create 93 jobs with an average salary of $53,000, require $12–15 million of construction, and generate roughly $28 million in initial sales.

"We're calling it Project X," Westfall said, describing a plan to repurpose an existing Best Buy building and citing examples of other cities that used aggressive incentives to land large retail or tourism anchors. He told the committee Fort Smith's board had passed a resolution committing incentives, which Westfall summarized in the packet as a sales-tax abatement (noted in the materials as 22% for six years with a change to 50% for a remaining period described in the memorandum) and estimated total incentives of about $6.5 million.

Randy Zook, president of the Arkansas State Chamber of Commerce and Associated Industries of Arkansas, testified in opposition. "Retail follows rooftops," Zook said, arguing retail is not a mobile, primary industry and that incentives should be reserved for jobs that otherwise would not locate in the state. Jim Hudson of the Arkansas Economic Development Commission (AEDC) urged caution about using state incentives for retail and recommended attention to the constitutional list and the Consolidated Incentives Act to avoid projects that "do not pencil out."

The committee lost quorum during the SB 493 discussion and took a brief recess. After additional testimony and debate, the chair recorded that SB 493 "fails with lack of motion," and no formal committee vote or do-pass recommendation was recorded in the transcript.

Next steps: SB 493 was not advanced at this meeting; proponents and opponents signaled differing views on whether retail projects should be eligible for state-level incentives and on what safeguards ought to apply.