Roadblocks to XNA deannexation being explored
HIGHFILL — An early compromise negotiated between airport officials and the city of Highfill could complicate any possible plans to de-annex Northwest Arkansas National Airport from the city.
The potential snag is an agreement negotiated around the time the airport was being built to keep Highfill from interfering with airport operations.
Scott Van Laningham, first CEO at the airport, said when the site was selected, it was in an unincorporated area of Benton County, which was fine with the Airport Authority. Between site selection and land acquisition, landowners in the area asked to be voluntarily annexed into Highfill. Airport officials did not try to stop it.
“The concern was, for the folks out there, they were worried that Bentonville was going to jump out there and get the airport, and then they’d have zoning and leash laws and all of that, and so they wanted to annex to Highfill,” Van Laningham said.
Highfill, with a population of 320, annexed much of the newly announced airport site in 1995. Then, by a 40 to 7 vote, residents annexed more of the area in 1997, according to election records.
The airport was built and opened in November 1998.
In 1999, airport officials became concerned because smaller towns around airports in other parts of the country had tried to restrict airport operating hours. Many of those disputes ended up in lawsuits, Van Laningham said.
“We had the internal discussion that, well, it’d be safer if we just got de-annexed from Highfill; then we wouldn’t have to get into a legal scuffle with them one way or the other,” Van Laningham said.
“Not that they had ever suggested they were going to do something like that, but there were other places that had, and we thought it’d be safer and in the best interest of the airport to just de-annex.”
Van Laningham said he reached out to area legislators and Airport Authority members and there appeared to be no opposition to the idea. A bill was floated in the state Legislature to address the issue.
“Then the bill gets filed, and it came as a public surprise to the folks in Highfill,” Van Laningham said. “There was a bit of a firestorm. I got calls from state legislators asking what the hell I’d stirred up.”
Enter then-Rep. Jim Hendren, who represented that area of Benton County in the Legislature. Hendren suggested he, Van Laningham, and then-Highfill Mayor Jerry Harwell sit down and work out a compromise.
“Our biggest concern was we did not want to be subject to any of Highfill’s ordinances or rules and regulations,” Van Laningham said. “So, that was the language Jim came up with. The compromise is we would remain in the city of Highfill, but we would be exempt by statute from any of Highfill’s rules, regulations or ordinances, and that’s how it’s been for basically 25 years.”
Highfill was able to continue collecting sales taxes from businesses at the airport. The airport was also given an option to deannex should Highfill ever be annexed or merge into another city.
“There has always been a gosh, we don’t get any services for that,” Van Laningham said. “I know. I understand. But, that was the compromise that we came up with.”
Aaron Burkes, CEO of the airport, said he has been unable to find any documentation of a written agreement related to the compromise. He also doubts any agreement could effectively restrict the General Assembly from implementing changes in the future.
Board minutes from March 1999 show the board discussed the compromise as it pertained to state legislation that would allow the airport to deannex. That state law was passed and mirrors the compromise. The board voted to approve the compromise, 10-1.
Looking for answers
The airport board voted unanimously in September to have staff explore the pros and cons of deannexing from Highfill, as well as how the process might work and what approach it should take. They’re seeking advice from outside attorneys.
“As we do from time to time, on matters requiring specific expertise, we have engaged Mitchell Williams as outside counsel to examine what the airport’s legal options are concerning de-annexation,” said Brian Burke, attorney for the airport.
The attorneys have not yet shared any opinions regarding de-annexation, according to Andrew Branch, chief operating officer.
Highfill Mayor Michelle Rieff said it would be economically catastrophic if the airport de-annexed. A large part of the city’s revenue comes from sales taxes the city receives from businesses operating at the airport. The city uses that money to pay off two outstanding bond issues, about $7 million.
Rieff said the city spends $700,000 a year on bond debt service. The city has projected it will receive $750,000 in sales tax proceeds next year.
City officials are communicating with airport leaders, Rieff said.
“The city has levied a two-cent sales tax for businesses in our city limits. We receive sales tax funds only from car rentals, shops and restaurants at the airport,” Rieff said. “This tax is paid by customers, not the airport. If the airport were to detach, we would not receive that sales tax revenue, but neither would the airport.”
Airport officials said Highfill has benefited from tax dollars generated by the airport, but the airport gets no services from Highfill in return. The airport has its own police and fire departments and maintains roads and other infrastructure on airport property, they say.
Airport officials said sales tax money now going to Highfill could perhaps be used instead for projects at the airport that would benefit the region as a whole.
“The Northwest Arkansas National Airport is a government entity that was created by the region to serve all citizens of Northwest Arkansas, not to benefit any single community,” Burkes said.
Jeff Hawkins, executive director at the Northwest Arkansas Regional Planning Commission, said, based on maps, it appears de-annexation could also be problematic because it could create noncontiguous islands of incorporated Highfill territory, which according to at least one state law can’t be done.
That island prohibition was amended into state law about 20 years ago after property owners de-annexed out of Cave Springs and annexed into Rogers, leaving noncontiguous remaining pieces of Cave Springs, he said.
Maps show the airport is mostly surrounded by incorporated territory. Bentonville and Highfill touch Northwest National’s borders. The Airport Authority does own property outside of Highfill city limits, purchased in 2007, which would be contiguous with other airport property inside the city limits by their corners touching. That parcel is in an unincorporated area of the county.
Hawkins said Arkansas laws regarding annexations and de-annexations are numerous — some are friendly, others not so much.
One allows the annexation and de-annexation of property from one city to another by mutual agreement. Another allows property owners to initiate a de-annexation from one city and annexation into another city if the city they are in refuses to provide requested services, Hawkins said.
Landowners can get together and petition to annex into another city. There’s also a way for cities to annex unincorporated islands. A city could also put a proposed annexation on the ballot for an election to detach territory and put it back in the county, Hawkins said.
Hawkins said he believes some of the state laws would apply and others would not. Annexations and de-annexations are about the property itself and any property owner — in this case the authority — has a right to seek annexation or de-annexation of their property, he said.
Annexation laws do not appear to address the loss of revenue issue, Hawkins said.
Losing your identity
Residents attending the Highfill Fall Festival on Saturday said the airport is a valued member of their community and plays a large role in the city’s identity.
“I personally hope that they will stay a member of the Highfill community,” said Johanna Loftin. “I think it adds a lot to this growing area, and they certainly have always been included as part of Highfill — they’ve been number one in Highfill.”
Loftin said the city continues to grow, adding subdivisions, and the restaurants and gas stations in town benefit from airport traffic. She said a proposed hotel on the airport property would be beneficial to the city as well.
“I just think it would be kind of a slap in the face to Highfill if they move out,” Loftin said.
Anna Myers said she’d be sad to see the airport detach from the city.
“We have a lot that comes from that airport being here. That’s our main thing for Highfill, our airport,” Meyers said. “So, I think that it would be bad.”
Dianne and Jim Burrus watched the festival parade with their grandchildren who scrambled for the candy being tossed.
“I don’t think it’s a good idea,” Dianne Burrus said. “I think it’s a benefit for Highfill, and I don’t see that the airport’s being injured any by paying those taxes.”
Dianne Burris noted the city is growing and the revenue from the airport has helped sustain that growth.
“We’ve got three subdivisions started just right here in town, not to mention the ones on the outskirts,” Burrus said. “So, I’d hate to see it happen.”
Ken Sauer and Tom Tate were walking around checking out the festival and the car show.
“I think that the airport’s asking for a whole lot, and I think supporting the community is a major thing,” Sauer said. “I didn’t know you could even do it. I didn’t know it could even be considered. But, I think it’s wrong of the airport.”