LITTLE ROCK Gov. Mike Beebe said Monday he'll ask lawmakers to put more money into a fund created to attract new businesses to Arkansas and help existing ones because virtually all of the $50 million originally set aside has been spent or offered to various projects.
Beebe said he doesn't know how much money he'll ask for from the Legislature in next year's session for the "quick action closing fund," but said it will be significantly less than $50 million set aside in last year's session. The Arkansas Economic Development Commission said that $25.8 million from the fund has been committed to various projects. But Beebe said that virtually all of the $50 million has been offered in some way to companies.
"It's virtually all used up, if all the projects in the mills, if you will, come into fruition," Beebe told reporters. "Some have been offered as an incentive in commitment, but people haven't yet decided if they're coming. But you don't do it after they decide they're coming. You do it in conjunction with trying to get them here."
The largest share of the fund, $10 million, was offered to help attract Hewlett-Packard Co. to Conway for a project announced last week. The money will go toward a $28 million, 150,000-square-foot building that the Conway Development Corp. is leasing to HP.
The city of Conway has devoted $2.2 million toward the site along with the $28 million, plus it previously put $5 million into development of the industrial park. HP will also be eligible for performance-based incentives from the state that would provide tax credits.
So far, the state has paid out $6.18 million from the fund, with $6.03 million going toward LM Glasfiber, a Denmark-based manufacturer of windmill blades that is building a $150 million plant in Little Rock and is already in production at a temporary site.
The remaining $150,000 has gone toward Daisy Outdoor Products' relocation of its assembly plant from Missouri to Rogers.
A project list provided by the Arkansas Economic Development Commission said the state has de-obligated more than $2 million that had been promised for Future Fuel of Batesville. The money had been promised to the firm to research and develop biofuels.
The agency said that incentives were offered based on the possibility of Future Fuels receiving a grant from the federal Department of Energy, but the firm did not receive the grant.
Under a set of guidelines for the fund drafted by the Economic Development Commission, no single project can be given more than $10 million. Beebe, however, has the authority to allow more to be spent.
Joe Holmes, a spokesman for the commission, said he didn't know how much of the remaining, uncommitted money in the incentive fund had been offered to potential projects nor how many prospective companies have been offered the funds.
"They're on the table, but they haven't been accepted. They're not done deals yet," Holmes said. "Not all of them will be. You can just about bet on it."
The incentive fund, which was proposed by Beebe during his campaign for governor in 2006, was funded last year from the state's budget surplus. Fiscal officials have said the state's budget surplus could grow to more than $164 million by July 1, a figure significantly less than the more than $1 billion in surplus cash the Legislature and governor inherited last year.
"It'll be dependent on how much General Improvement Fund money we have and what other obligations we have for the General Improvement Fund," Beebe said. "There's no way to tell at this juncture, but it's going to be significantly less for a lot of reasons, how significantly less we don't know."
