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Danger ahead 

Political clout jams through approval of an NLR shopping center. The only thing missing is a workable traffic plan and money.

PARKING LOT: It would replace this channel for NLR shopping center.
  • PARKING LOT: It would replace this channel for NLR shopping center.
On April 13, North Little Rock Mayor Patrick Hays wrote to U.S. Rep. Don Young, R-Alaska, chairman of the House Transportation Committee, seeking more than $36 million in federal highway funds to provide access to a privately owned shopping center to be built at the juncture of I-30 and I-40. Hays’ request followed by a mere two weeks a decision by the Army Corps of Engineers to permit Belz-Burrow Development Group of Jonesboro to clear the site for The Shoppes at North Hills, an open-air emporium that is to be 13 percent larger than McCain Mall. An $18 million Bass Pro Shops outdoors megastore will dominate the $80 million open-air center, anchoring other shops, restaurants and a multi-screen theater. In March, the Corps issued a 66-page document explaining its decision to permit the development in a sensitive wetland area known as Dark Hollow. That document included an assessment of the complex traffic problems relating to the site, which is bounded by highways that carry the state’s heaviest traffic. That analysis did not mention that federal funds would be sought to route customers to the complex. Rather, the Corps’ document zig-zagged through the tricky issues of how traffic in the area could be rearranged to accommodate the center, whether state and federal highway officials would allow any changes, and, if so, who would pay for constructing them. While acknowledging that its evaluation was to include an assessment of the mall’s impact on traffic, the Corps dodged that responsibility in deciding to issue the permit. Its decision document noted that the developer recognized that “additional proposed transportation systems would be required to access and leave the project site and to reduce or minimize traffic flows into residential areas.” But the Corps failed to require Belz-Burrow to provide plans for the needed “transportation systems,” or to show that the state and federal agencies that control the highways had approved any changes. Rather, the Corps accepted facile assurances from North Little Rock officials “that all road and highway infrastructure improvements would be made.” In accepting that vague promise, without plans, agency approvals or cost estimates to support it, the Corps ignored repeated warnings from the Federal Highway Administration (FHWA) and the Arkansas Highway and Transportation Department (AHTD) that local entities, such as North Little Rock, cannot make – or honestly promise – changes to state and federal highways. Even now that the center has received the Corps’ go-ahead, officials at FHWA and AHTD insist that they have approved no plans – let alone expenditures – for changes in the area. That position conflicts with statements Mayor Hays made to the Corps. Last February, Hays notified the Corps in writing that his city’s traffic engineering staff had “approved” measures “the city planned to implement to handle increased traffic volumes associated with The Shoppes at North Hills.” But as recently as June 21, three months after the Corps approved the permit, Tim Marvin, director of North Little Rock’s Traffic Services Department, acknowledged that no plan had been approved. According to Marvin, “There is no concrete proposal.” The Corps’ decision to permit the mall ended a 19-month review of the proposed development required by the 1969 National Environmental Policy Act, because the site is a wetland. It provides storm and flood water drainage for a large portion of North Little Rock. The evaluation process was not limited, however, to issues of water. The Corps’ review was to consider the project’s impact on the environment at large, including traffic, safety and “cumulative impacts of the proposed activity on the public interest.” More than a quarter-million vehicles pass within a half-mile of the site each day. For most of their occupants, the “environment” along the stretch of road where I-30, I-40 and US 67/167 converge is primarily one of dense traffic. The story of how the Corps negotiated the Belz-Burrow application, the traffic obstacles it presented, and the attendant political pressures is one of evasion, bobbing and weaving. Officially, it began in November 2003, when the Corps published the developer’s proposal and opened a period for public comment. Representatives of state and federal agencies, as well as a few citizens, responded. Many challenged the adequacy of the developer’s plans for redirecting floods. Others questioned the lack of explanation as to how traffic would be rerouted. From November 2003 to March of this year, Corps officials sought designs and redesigns from the developer to address both those concerns. Ultimately, in April, Col. Wally Z. Walters, the Little Rock district engineer in charge, pronounced himself satisfied that the project would “not be contrary to the public interest.” Moreover, Walters concluded, “I feel that sufficient information is available to make a decision without the need for a public hearing.” A group of environmentalists (see sidebar) immediately filed a lawsuit claiming that the plan approved by the Corps still failed to address problems relating to wetlands and flooding. The lawsuit also argued that the Corps bypassed any meaningful review of the mall’s impact on traffic. Indeed, the Corps’ decision to issue the permit without having a “concrete” road plan to assess defeats the purpose of an environmental review. It leaves undetermined what impacts the mall might have on issues such as highway congestion, commuter time, construction delays, truck service to the mall, overflow traffic through neighborhoods, and many safety factors, such as the development’s impact on students attending three nearby schools. Rather than hold out for a traffic plan it could adequately assess, the Corps opted to grant the permit, allow construction to begin, and let whatever conditions resulted dictate what happens next. That roll-over indicated nothing so much as the level of horsepower that’s been pushing this development, despite problems of access that have been well known since at least 2001. At that time, a different developer was interested in Dark Hollow, and Mayor Hays was anxious to help. But when Hays asked the state highway department about the feasibility of constructing a new off-ramp near the interchange of I-40 and U.S. 67/167, near North Hills Boulevard, AHTD Director Dan Flowers had to report bad news: “The design criteria for ramp spacing on freeways require certain minimum distances between successive ramps,” Flowers explained. “The existing interchange is a freeway to freeway interchange. Introduction of a local service type ramp into this area, such as the proposed ramp, would add another decision point for drivers in an already congested area. “If a design is proposed that can physically be constructed that meets freeway design criteria, the approval of the Federal Highway Administration (FHWA) will be required in order to obtain a break in the current control of access. “To obtain this approval, a detailed traffic analysis, based on the projected traffic, will have to be made. This analysis should provide sufficient justification to show the need for the ramp.” Ominously for the developer, Flowers concluded his memo with the note: “The FHWA has previously required, in other locations, that if future development generates the traffic necessary to justify the ramp that most of the development be in place prior to allowing the ramp construction to begin.” In other words, the developer had to take the risk of building – and hope to generate the desired traffic – before highway officials would allow modifications to accommodate that traffic. That developer eventually backed out. But dreams of commercializing Dark Hollow lingered, and in 2002, when Belz-Burrow began discussing a huge new mall with a Bass Pro super store at its center, the mayor’s hopes rose again. It appeared for a time that the project would land in Little Rock, at a location near Otter Creek. But Belz-Burrow wanted to draw on more traffic and, from that point of view, the North Little Rock site, with more than twice the traffic that passes Otter Creek, was unsurpassable. Belz-Burrow opted for Dark Hollow, despite the numerous access problems that still stymied highway engineers. As one federal highway engineer had already written: “For many years, FHWA has voiced concerns that a local connection within an interchange, and especially a freeway-to-freeway interchange, violates driver expectancy and introduces additional, unnecessary decision points in an area where information processing by the driver is already complex.” Carl G. Kraehmer, the FHWA field operations engineer who wrote that 2001 memo, had cautioned: “Any proposals that would cause deterioration in the freeway operation now or in the future should be discouraged ... Any new access proposals should be developed based on the overall freeway system needs and limitations, not as a matter of convenience for adjacent property interests.” The memo slowed nobody down. Noting that The Shoppes at North Hills would create 1,400 jobs and generate “well over” $2.5 million a year in sales taxes for North Little Rock, Hays and the City Council threw their support behind the Belz-Burrow project. Already, the developers stood to gain from federal and state tax incentives. The site in North Little Rock fell within a federal Empowerment Zone, where tax breaks are provided to businesses to help spur job creation. Arkansas voters’ approval in 2003 of a plan to allow creation of Tax Increment Financing (TIF) Districts further sweetened the developer’s prospects. The 2005 legislature passed further legislation making it easier still for use of this financing, specifically to allow capture of school property taxes to pay for improvements needed for private developments like the Bass Pro shopping center. While critics have complained that exploitation of the TIF legislation helps developers at the expense of schools, Hays hastened to assure Belz-Burrow that North Little Rock did not deem that a problem. Hays acknowledged as much on March 3, 2003, when he noted in a letter to Bruce Burrow that “the active cooperation of the school district in which the Tax Increment Financing District would be located is very important and its support is often crucial to the success of establishing the district.” Hays then reassured Burrow: “As I have previously shared with you, I have spoken with the Superintendent of the North Little Rock School District, Mr. James Smith, and James has indicated to me that he would support this project.” (Smith has since retired and, as it happened, the School Board voted to oppose the TIF project.) The fervor in North Little Rock sent local, state and federal engineers back to their computers and drawing boards. But the goal of a safe and practical plan to route highway traffic to and from the development remained stubbornly elusive. In September 2003, Hays vented his frustration in a letter to U.S. Rep. Vic Snyder. “As I mentioned earlier,” Hays wrote, “this effort has been ongoing for over two years, and we are currently at an impasse regarding federal authorization and, as such, the AHTD, along with the local FHWA office has referred this matter to Ms. Mary Peters.” Peters heads the FHWA. Three weeks later, on Sept. 29, Snyder, along with Rep. Marion Berry and Sens. Blanche Lincoln and Mark Pryor, co-signed a letter to Peters about hopes for The Shoppes at North Hills. That letter noted: “But without proper access to the site, shoppers will be forced to detour through multiple North Little Rock neighborhoods to access the shops, causing untenable traffic through quiet local streets. “However, this access problem can easily be remedied by the construction of a new southbound exit ramp off of U.S. Highway 67/167. We understand that the AHTD stands ready to begin this project, with only approval from the FHWA remaining. We urge you to work with the AHTD and the City of North Little Rock to ensure that the needed access can be constructed for this valuable new shopping complex for central Arkansas.” Peters responded the following month, stating that her department was “familiar with the value of this development to the area and the challenge of providing access to it in the congested Lakewood/I-40 and U.S. 67/167 interchange area.” She then reiterated: “The FHWA has long opposed partial interchanges, ramps-off-of-ramps, and left-side ramps that may violate the expectations of motorists. “Moreover,” she added, “based on the traffic estimates provided by the developer, such alternatives would not be able to accommodate the projected traffic.” Undeterred, Belz-Burrow applied with the Corps of Engineers for a permit to build. One of the first state agencies to signal its support for the project was the Arkansas Department of Environmental Quality (ADEQ). Six days after the Corps asked for comment, the ADEQ reported itself satisfied that the placement of a mall in Dark Hollow would “not physically alter a significant segment of a water body and will not violate the water quality criteria.” The Arkansas Soil and Water Conservation Commission and the Arkansas Game and Fish Commission were more cautious. Both expressed concerns, though, ultimately, neither opposed the permit. The AHTD neither backed the proposal nor opposed it. Flowers told the Corps: “Any transportation related improvements or development as a result of this project will be the responsibility of the developer.” The Corps also notified the Department of Homeland Security about plans for the mall. Specifically, it sought comment from officials at the Federal Emergency Management Administration (FEMA), presumably on whether the mall raised concerns about evacuation routes or other security issues relating to the three nearby highways. FEMA did not respond. But the parties promoting the project were busy in Washington. Hays enlisted the help of Rodney Slater, the Arkansan who had served as Secretary of Transportation under President Clinton and who now works as a Washington lobbyist. And members of Arkansas’s congressional delegation were beginning to prove somewhat effective. In January 2004, Congress passed an appropriations bill, H.R. 2673, part of which directed federal highway officials “to work with the Arkansas Highway and Transportation Department and the City of North Little Rock to develop a plan for southbound access from U.S. Highway 67/167 near the intersection of Interstate 30 and Interstate 40 in North Little Rock, AR, no later than March 1, 2004.” But issuing an order and setting a deadline did not solve the engineering dilemma. The deadline came and went. The following week Hays again wrote to Snyder, this time touting a “multi-phased development approach” that he said had “been formulated with input” from city engineers, the AHTD and the FHWA. Hays asked Snyder to try to secure funding “in the amount of $5 million to allow us to begin planning, permitting, [and] construction.” Even as the letters flew, Kraehmer at FHWA was contesting suggestions that an acceptable plan had been found. “I believe that there needs to be a good discussion about these issues before the developer is assured that there is agreement ...” Kraehmer wrote. “We have serious concerns.” When Belz-Burrow announced its choice of the North Little Rock site, company officials projected The Shoppes at North Hills would open by spring 2005. When 2005 arrived, and the developer still did not have the Corps permit, political influence arrived on the scene to get the stalled project moving. Records recently obtained through the Arkansas Freedom of Information Act show that in January 2005, Gov. Mike Huckabee notified Col. Walters of the Corps that he considered the Belz/Burrow project “vital.” Huckabee pointed out that “all necessary state permits and certifications have been issued.” Then, citing the federal bill that directed the FHWA to help Arkansas officials find a solution to the traffic puzzle, Huckabee added: “In addition, several other hurdles have been overcome, including highway interstate access legislation ... to ensure this project becomes a reality.” Like much about the Dark Hollow project, Huckabee’s suggestion that the access “hurdle” had been “overcome” was, at best, a stretch. (Here it might be worth noting that Huckabee has appointed Bruce Burrow of the development firm and his wife to state boards; that Burrow had been a financial supporter of the governor and that one of Burrow’s lobbyists, Ron Fuller, has led campaign fund-raising for Huckabee.) By the time Huckabee wrote to Walters, the deadline set in that legislation was already nine months past. No solution had been found, no agreement reached, no hurdle overcome. Walters responded by notifying Huckabee that Belz-Burrow “has been given 15 days to respond to our request for information on traffic concerns.” With the clock ticking, Hays wrote to the colonel, and that letter, dated Feb. 18, also misrepresented the facts. In it, Hays described certain “transportation measures” he said North Little Rock “plans to implement to handle increased traffic volumes associated with The Shoppes at North Hills.” Hays assured Walters that “these measures have been approved by our traffic engineering staff and will provide adequate levels of service along transportation routes used to access the project site.” He further assured Walters that, “all associated agencies are in agreement that the adopted measures will provide adequate levels of service along transportation routes and will address the increased volume of traffic associated with the project.” What the so-called “measures” were, when all the “associated agencies” had agreed, or in what forum the measures had been “adopted,” Hays’s letter did not say. But on Feb. 18, Hays wrote to Snyder outlining a “project request” to the House Subcommittee on Transportation and Treasury, for funds totaling $11,675,000, regarding “The Shoppes at North Hills.” Three days later, another letter outlining the “project” was sent to the Corps, in response to Walters’ request. The letter came from Barrett & Deacon, a Jonesboro law firm representing Belz-Burrow. The letter described plans for rearranging federal and state highways and roads in North Little Rock. Missing from it was any supporting documentation from the FHWA or the AHTD or even North Little Rock’s department of traffic. The Barrett & Deacon letter cited five “large-scale transportation improvements” it said had been “adopted” by the city of North Little Rock, which would address “projected increased traffic volumes and alleviate safety concerns” associated with the development. “The traffic measures package will cost approximately $8 million to construct,” the letter reported, “and will be funded by the City of North Little Rock, the Arkansas Highway and Transportation Department and the developer.” That contradicts the record of the AHTD in this case and statements made by department spokesman Randy Ort as recently as June 28. Any roads to be built to access the development “will be the responsibility of the developer,” Ort said, “subject to our approval, if they involve our facilities.” The FHWA’s position is equally clear: none of the concepts it had reviewed met “design and safety criteria.” The public has been utterly sidelined in this process. But it too might have had something to say, had it known about the multi-million-dollar changes to highways and neighborhood roads that were outlined in the law firm’s letter. For example, the document described relocating a proposed southbound U.S. 67/167 on-ramp, “to a point just south of McCain Park Drive”; creating an exit ramp from I-40 to connect to North Hills Boulevard, and constructing something called a “Texas Turnaround” at I-30 and 15th Street. Col. Walters now faced a situation like the one the engineer had described Confronting drivers on I-40: a “decision point” in an already congested area. The governor, members of Congress and the mayor wanted the development. But everyone with a say about roads was saying, as the FHWA put it, that “the various concepts submitted ... would not meet design and safety criteria.” Forced to decide, the Corps opted to grant the permit. It breezed past the pile-up on the question of access by resorting to Huckabee’s letter. After all, as the Corps’ permitting document noted, “Gov. Mike Huckabee stated in a letter on Jan. 5, 2005, that one hurdle that had been overcome was interstate access legislation.” By exploiting the nuances of the governor’s use of “hurdle” and “overcome,” the Corps rationalized its decision, allowing Belz-Burrow to overcome an actual and formidable hurdle. The project’s backers moved into high gear. Just two weeks after Col. Walters’ decision, Hays dispatched his letter to Alaska congressman and House transportation committee head Young, chairman of the House Transportation Committee. But the project Hays described in his letter of April 3 was more elaborate than any outlined before. Now, in addition to adding and relocating ramps, and reconfiguring more than a dozen roads, the mayor’s request included building two “interstate bridge fly-overs,” at a cost of $8.5 million each. Hays explained that the “interstate bridge fly-overs” were needed “to provide left-ramp access from U.S. 67/167 southbound to I-40 westbound,” and “left-ramp access from I-30 to I-40 eastbound” – the area bounding Dark Hollow. The bottom line of the mayor’s request: $36.1 million. This article is dedicated to the memory of Sen. Ben Allen, who championed Arkansas’s Freedom of Information Act.
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