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Tale of two cities 

“It was the best of times, it was the worst of times,” begins the famous novel by Charles Dickens.

So it is for Little Rock as another mayoral race gets underway. The city’s population and economy are growing, tourism is increasing and the cultural life is improving. But that growth is putting pressure on infrastructure, jail space can’t keep up with the crime rate and neighborhood leaders disagree about where to direct limited funds.

Perhaps the strongest division is between downtown and West Little Rock, where policy perspectives are shaped by lifestyle choices. To downtown loyalists who live east of University Avenue, West Little Rock is an abomination of sprawl. On the other hand, residents of West Little Rock think downtown is inconvenient, dirty and unsafe.

Both are right, to a degree. But both take advantage of the other’s amenities, whether it is the plentiful shopping in West Little Rock or the dining and entertainment options in downtown.

In that way, it is a productive and dynamic competition, and the success of each area doesn’t have to be mutually exclusive. Still, with all things being equal, West Little Rock’s growth is more expensive and burdensome.

That’s because a majority of the development is new, so the city has to pave streets, expand the public safety network and extend sewer lines and other utilities. And that stretches the available resources even thinner.

Many other municipalities deal with this problem by imposing impact fees, which are simply charges assessed to developers to compensate for the public infrastructure servicing their new properties. Even Bentonville — home to Wal-Mart and bastion of free-market thinking — already requires impact fees for commercial development, and other conservative cities like Rogers and Cabot are seriously considering adopting them. In fact, a heated debate ensued at a public hearing in Cabot this week as the city council prepared to take up the subject at its Aug. 21 meeting.

As those discussions are occurring elsewhere, Little Rock seems to be alone in avoiding a serious discussion of impact fees, even though it is feeling the effects of rapid growth. Tony Bozynski, the city’s director of planning and development, said he doesn’t know why impact fees have not at least been formally contemplated.

“Several years ago there was a study done along the Kanis Road corridor, and at that time there was some discussion about other ways of funding street improvements,” he said. “I don’t think impact fees were mentioned. … I can’t point to any specific reason why it’s not got to the point where someone does a study of street development fees.”

An obvious reason is that city officials are hesitant to challenge developers. But if they lack the political will to recover the costs of unrestrained growth, they should support programs that encourage in-fill development as an alternative to sprawl.

After all, redeveloping vacant downtown buildings and lots would provide numerous benefits to the city. We have already witnessed the disproportional advantages of recovering merely a few blocks of real estate in the River Market. Since that is the part of town most visitors see, the public relations and economic gains are exponential.

Better yet, the city doesn’t have to spend money to accommodate the new developments, because all of the services are already in place.

The only problem is that it typically costs more to renovate existing properties than to build on undeveloped land.

“Redevelopment projects can be an expensive undertaking,” said Ryan Lasiter, a broker with Doyle Rogers Company, which has several historic buildings on Main Street that have been sitting vacant for years. Lasiter previously lived in Memphis, which adopted a series of incentives for developing downtown properties that include tax freezes, tax-exempt bonds and access to working capital.

“Incentive programs, such as the ones offered in Memphis, have continuously induced and encouraged projects that otherwise may not be economically feasible,” Lasiter noted.

With that in mind, the Memphis model would be a good one to follow if Little Rock’s leadership could be convinced that widespread downtown development is in the city’s interest.

Sharon Priest, executive director of the Downtown Partnership, said she has convened two task forces to move forward on that front. “There is nothing we currently have on our wish list, but there will be.”

She added that the Downtown Partnership does not have an official position on impact fees, which is unfortunate, because it would have the most to gain from them. Plus advocating for the fees would work well as a political bargaining chip that could be relinquished in exchange for a package of city incentives for downtown development.

For in the end, if we’re not going to make developers pay for their impact, we might as well encourage a preferable kind.

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