Center to receive full tax incentives
Judge: Convention hall’s new owner has right to A&P payments
In a reversal, a federal bankruptcy judge has ruled that all tax benefit agreements in place before the Arkansas Convention Center was sold will continue.
At issue was the annual payment of $150,000 in financial incentives negotiated between the center’s original owner, Dr. Hiren Patel, and the Advertising & Promotions Commission of Texarkana, Ark. The 15-year agreement, which began in 2011, included a rebate of any city hotel and restaurant taxes the convention center would owe over the term of the deal.
When James Naples of Texarkana purchased the center in April, Judge Brenda Rhodes denied a transfer of the benefit. However, she did rule that A&P Commission would continue to uphold another agreement of $84,000 in annual incentive payments to the center. That agreement runs from 2014 to 2020.
Rhodes reversed her earlier ruling Tuesday at the end of the hearing in bankruptcy court in Plano, Texas. According to a docket entry in the case, a formal order that the judge is expected to sign is being drafted by lawyers and is due Sept. 26.
Texarkana lawyer Josh Potter, who represents the A&P Commission, said he has recommended that the
A&P Commission call a special meeting to discuss the judge’s revised ruling. He said a decision concerning a possible appeal to the federal 5th Circuit Court of Appeals has not been made.
In May, Naples filed a motion for reconsideration of Rhodes’ initial ruling, arguing that both agreements should remain in force, as per federal bankruptcy law. The A&P Commission responded by filing an objection to Naples’ motion. A hearing on the issue was scheduled for September.
The convention center was in danger of foreclosure for millions in unpaid loans when Patel-owned Texarkana Hotels LLC filed for bankruptcy in April 2016. When sale of the center became probable, the city of Texarkana, Ark., the A&P Commission and the Arkansas Economic Development Commission filed objections to the conveyance of the tax
benefit agreement.
Naples, who bought the center for $6.55 million, said in a previous interview that he intends to develop land adjacent to the hotel and convention center into an indoor sports facility. He also intends to build baseball fields on the site.
The A&P Commission authorizes use of revenues from the city’s 3 percent hotel and 2 percent restaurant taxes in support of tourism and hospitality industries. llarowe@texarkanagazette.com