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Council approves Act 9 bond mechanism for Cargill/Tyson project and sets hearing on related easement changes
Summary
Council approved an ordinance that uses Act 9 authority to facilitate rehabilitation of the former Cargill facility (title transfer/leaseback mechanism), and set a Jan. 13 public hearing to consider abandoning a storm-drainage easement tied to the project; the city also approved vacating portions of blanket utility easements at 1210 S. Thompson.
Councilors approved an ordinance invoking Act 9 to authorize issuance of industrial development bonds and related lease/leaseback documents to support a significant rehabilitation of the former Cargill plant at 730 Randall Welby Road, a project described by staff as an investment by Tuscan/Tyson Foods. Outside counsel explained that Arkansas law requires title to noncharitable property that will receive a property-tax exemption to be held in the name of a local government, so the financing structure transfers title to the city at closing and leases the property back to the project company.
The city attorney briefed council that the pilot structure includes documents such as a bond purchase agreement, trust indenture and a payment-in-lieu-of-taxes agreement; outside counsel clarified that interest on Act 9 bonds is taxable. Council adopted the ordinance on recorded vote (6–0).
Related to that project, council approved a resolution setting a Jan. 13 hearing to consider abandonment of a storm-drainage easement needed for the developer’s site plan; the clerk will publish statutorily required notice. Council also approved an ordinance to vacate portions of two blanket utility easements on property at 1210 South Thompson and adopted the emergency clause to expedite that action.
City staff said the property associated with the easement petitions remains owned by Cargill Meat Solutions at the time of the meeting; council approved the actions without recorded opposition.
