Convention center ruling will be meeting’s focus

Bankruptcy verdict kept tax-benefit agreement for new owner of business

The Texarkana, Ark., Advertising and Promotion Commission will hold a special meeting to discuss a recent judge’s ruling concerning the Arkansas Convention Center.

The meeting is scheduled for 4:30 p.m. Thursday at City Hall, 216 Walnut St. The ruling is the only item on the agenda.

In a reversal, a federal bankruptcy judge ruled in September that all tax-benefit agreements in place before the convention center was sold will continue.

During its regular meeting Oct. 19, the commission heard a briefing about the ruling from its legal counsel, Josh Potter, but tabled deciding whether to appeal it. Potter offered his opinion that any appeal of the ruling would be expensive and almost certainly futile.

“I don’t think there’s any use in attacking those opinions,” he said.

At issue is the annual payment of $150,000 in financial incentives negotiated between the center’s original owner, Dr. Hiren Patel, and the commission. 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 the 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 Sept. 19 at the end of the hearing in bankruptcy court in Plano, Texas.

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.

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, has said he intends to develop land adjacent to the hotel and convention center into an indoor sports facility. He also intends to build baseball fields.

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.