BENTON - A lawyer is questioning Benton's plan to pay $158,273 in incentives as part of a deal to land a Harps grocery store.
As part of Benton's increased efforts to attract retail businesses, the city agreed to pay for drainage and dirt work at the site along Arkansas 5 where a Harps is being built.
David McCoy, who said Tuesday that he's representing "concerned citizens and business people," said he thinks the agreement is against the law.
Retail businesses do not qualify for the same economic development incentives as industry, he argued.
Records released Tuesday under the Freedom of Information Act show the city intends to pay for the work, which includes building a detention pond and pouring asphalt and curb and doing gutter work, when completed. Construction is under way.
City officials haven't decided how to pay for the project, whichgot the green light in July when the City Council passed an ordinance authorizing the deal with Springdale-based Harps.
McCoy entered the fray Dec. 17 with a letter to the city demanding "legal justification for spending taxpayer funds" to help subsidize building the store.
He declined to name his clients.
McCoy said in his letter to city officials that he believes state law excludes such retail outlets such as grocery stores from receiving "these types of economic development assistance projects."
But Alderman Doug Stracener, chairman of Benton's economic development committee, disagrees with McCoy and said the store is indeed industry.
"It does put people to work and brings in money to the city budget," he said.
City Attorney Brent Houston, also defending the incentives, said no case law or statute specifically defines "industry."
"I fail to see any basis to state that there will be an improper use of city funds in connection with this project," he wrote in a recent e-mail to City Council members after McCoy raised the issue.
J. Max Van Hoose, vice president of store planning for Harps, said he couldn't think of any other time when the company got such an incentive from a city to open a store.
"We were really struggling to make that site work economically," he said, noting that the company has opened few new stores in recent years.
Harps has just 50 plus stores in Arkansas, Oklahoma and Missouri.
Stracener said he expects the city will pay for the work out of the street department budget or will allocate money from an existing quarter-cent sales tax designated for drainage and street improvements. The latter requires the approval of twothirds of the City Council.
To use those funds, the city would have to show that the infrastructure improvements at theHarps site benefit a city street, Houston wrote in a memo.
McCoy said he is considering seeking a court order to stop the city from making payments on the work if further research intothe matter indicates wrongdoing. He said he's waiting for the city to turn over more records before taking any legal action.
"We're just gathering information," he said.
Arkansas, Pages 11, 15 on 12/31/2008