Downtown developer gets clear direction on funds

At a special meeting Friday, the Texarkana, Ark., Advertising and Promotion Commission voted to make clear how a downtown developer may use funds it previously awarded him.

The commission voted to specify acceptable use of $20,000 it awarded David Peavy, owner of 1894 LLC. Peavy may use the funds only to establish utility connections across Front Street Festival Plaza, where he plans to make a coffee shop out of a vintage railroad lounge car.

At issue was the legal use of A&P funding, which is limited by state law to the promotion of a city’s tourism and hospitality industries. The commission collects 3 percent hotel tax and 2 percent restaurant tax revenues and allocates them to help fund organizations and events it judges will bring visitors to Texarkana.

Commission attorney Josh Potter advised the panel on Peavy’s funding in a May 16 letter.

“For this project, the applicable section of the ‘Use of Funds’ statute states that funds may be used for ‘construction, reconstruction, repair, maintenance, improvement, equipping, and operation of public recreation facilities in the city or the county where the city is located if the city owns an interest in the center or facility.’ …

“The city does not own an interest in 1894, LLC’s train, but it does own an interest in front street plaza. 1894, LLC has agreed to utilize these funds to provide utilities across the front street plaza to the proposed site of the train car. These utilities include, waste(,) water, data, and electricity. The funding shall be strictly awarded for this use only and Mr. Peavy is prepared to sign an agreement to that effect,” Potter wrote.

Commissioner Brandon Cogburn clarified with Peavy that the agreement will operate on a reimbursement basis. The commission will not simply write Peavy a check but instead will reimburse him for approved projects totaling no more than $20,000 in cost.

Peavy is building the coffee shop on city-owned land at Front and Olive streets under a franchise agreement the city Board of Directors approved in December 2017. He also owns and is renovating 1894 City Market, the former Ritchie Grocery building, across the street at the same location.

The commission was unable to vote on a pair of new funding requests, one from Twin City Sports and another from

David Peavy, owner of 1894 LLC, may use the funds only to establish utility connections across Front Street Festival Plaza.

Gathering of Authors, because its bylaws state all sitting commissioners must be in attendance for such votes. Chairwoman Joyce Dennington was absent.

The city is seeking applications to fill three vacancies on the commission, an at-large seat and two others that must be filled by owners or managers of local hotels or restaurants.

In January the commission nominated and in February the board approved Cogburn to complete the term of the previous at-large commissioner, who resigned. That term ended March 21, but the commission has voted to allow Cogburn to continue to serve until the board approves either him or another nominee for a new four-year term. Cogburn participated and voted in commission meetings on April 5 and April 19.

Before the meeting Friday, Potter cited an Arkansas attorney general’s opinion stating that an A&P commissioner with an expired term may continue to serve until reappointment or replacement.

“In the absence of such a reappointment or replacement, the sitting commissioner would nevertheless be authorized to act as a de facto officer. … I will note in this regard that the acts of de facto officers are valid and enforceable,” the opinion states. The opinion offers no guidance on how long such a de

facto arrangement may continue.