West Memphis Super Project Could Get $300M Incentive Fund

By:Ainsley Platt, Arkansas Advocate

Arkansas lawmakers proposed a transfer of up to $300 million into an economic development incentive fund Thursday for a manufacturing “super project” employing thousands of workers that officials hope to attract to West Memphis.

The proposal to tap state surplus funds to offer economic incentives and address road infrastructure needs related to the project was part of a measure detailing the state’s $6.7 billion budget that a legislative panel gave initial approval to as lawmakers near the end of this year’s session.

Lawmakers who spoke with the Arkansas Advocate offered few details about the company behind the project or what it would entail, but House Speaker Brian Evans, a Republican from Cabot, said several states are in the running to land the deal.

He said he believed Arkansas is a finalist and estimated the project would create 4,000 jobs at the outset, with an additional 2,000 jobs after it’s completed.

“This is good red, white and blue American manufacturing,” Evans told reporters Thursday, calling it a “super project.”

The project, if it ends up in Arkansas, would be the second major economic development win in the West Memphis region in recent months. Tech giant Google unveiled a multi-billion dollar data center project in the West Memphis area last year, with that facility already under construction.

Crittenden County has a lot of potential and there have been conversations about the county landing bigger projects in recent years, County Judge Woody Wheeless said.

“Economic development and support from the state level is vital to making anything that’s potentially going to happen be able to come to fruition because the cities and the counties don’t have the types of funds available like the state would have to be able to assist with economic growth,” Wheeless said.

The economic development money was included in revisions to the Revenue Stabilization Act, which outlines what money is available for the Arkansas state government to spend based on expected revenue. The proposal would place up to $150 million in an economic development incentive fund for economic incentives for an “advanced manufacturing, non-data center” facility in West Memphis. Additional funds, up to $150 million, would go into the same fund for public highway and road improvements necessary for the facility.

The transfer for the economic incentives will only happen after the Arkansas Economic Development Commission enters into a “definitive incentive agreement” with the company behind the project that meets certain criteria, according to the proposal.

“AEDC is under a nondisclosure agreement, so they can’t disclose to us anything about the project,” said Joint Budget Committee co-chair Sen. Jonathan Dismang, a Republican from Searcy. “None of the money’s released unless the project’s awarded or accepted.”

The money for road improvements will only be transferred after the Arkansas Department of Transportation estimates how much will be necessary to complete needed road work while taking into account other funding available, such as federal money.

The money for the incentives and the highway improvements would come out of the General Revenue Allotment Reserve Fund.

“We have seen what the steel mill boom has done up in the northeast part of the state, and if we can close the deal on this project, it’s going to be as equally monumental for the eastern and southeastern part of the state as well,” Evans said.

Revisions to the Revenue Stabilization Act are typically the last item passed by the Legislature each session after appropriations bills — which give agencies the authority to spend certain amounts of money, but not the money itself — and is often referred to as the state’s budget.

The Legislature’s proposed $6.7 billion budget for the upcoming fiscal year aligns almost perfectly with the $6.67 billion budget proposed by Republican Gov. Sarah Huckabee Sanders last month.

It’s a $211 million increase over the budget approved by legislators last year, with most of the increase a result of increased funding for school vouchers, formally known as the Educational Freedom Account program. In the upcoming school year, the program will provide participating students up to $7,208 that can be used for private school tuition or homeschool costs.

Legislative leaders say they plan to give the state budget final approval next week and wrap up the session on Wednesday. But Evans said he expects lawmakers to return the following week for a special session on Sanders’ proposal to cut income taxes.

The next fiscal year starts July 1. Under the proposed budget, Arkansas will have a projected $310.2 million surplus for the fiscal year.

Tess Vrbin and Antoinette Grajeda contributed to this story.