After a lengthy and frank discussion, the El Dorado Works Board agreed to recommend to the El Dorado City Council a $2.2 million-plus funding request from the Murphy Arts District to cover cost overruns in the construction of the MAD amphitheater and playscape.
The approval came with the understanding that city officials will first work with MAD, its attorney — Arkansas House Speaker Matthew Shepherd, R-El Dorado — and the Arkansas Municipal League, who has offered legal counsel and a team to help sort out the matter.
The city council will meet at 5:30 p.m. today in the Council Chamber of City Hall.
During the last regular council meeting on Oct. 4, Mayor Frank Hash said that MAD has not turned over deeds to properties that were acquired and developed with the city’s one-cent, economic development taxes — the former El Dorado Forward and current El Dorado Works taxes.
The El Dorado Forward tax expired in June 2015 after eight years and the 10-year El Dorado Works tax went into effect Oct. 1 the same year.
The city committed a total of $13.4 million from both taxes to the development of MAD, initially pledging $9.02 million in 2013.
In 2016, MAD returned to the EWB and the El Dorado City Council with a request for an additional $3.2 million, which was combined with the $6.47 million that remained from the 2013 funding request.
The money has been used for several components in the first phase of the $100-plus million MAD development project, including sidewalk improvements ($2.75 million), a conversion/renovation of Oil Heritage Park ($416,879.02) and property purchases and construction of the amphitheater and playscape ($9.47 million).
Purchase agreements with the city call for MAD to use city funds to purchase and develop the properties deed the properties to the city, operate and maintain the facilities and enter into a longterm lease agreement with the city at a nominal fee. ($10 per year for 99 years).
After two years of construction, the phase-one projects have been completed, with the grand opening of MAD taking place in the fall of 2017 and the playscape opening in May.
“The deeds and other documents have not been forthcoming,” Hash told city council members Oct. 4, adding that the matter has caught the attention of state legislative auditors.
He said MAD planned to request additional money to address cost overages pertaining to property acquisition and construction.
“It’s a tough decision. It entails public monies and you can’t willy-nilly public monies,” Hash said at the time.
Austin Barrow, MAD president and chief operating officer, subsequently explained that for the past five to six months, MAD has been sifting through invoices for the playscape and amphitheater/parking lot projects.
Per the purchase agreements with the city, the purchase price and remodel/construction estimates were $6.4 million for the amphitheater/parking lot and $2.7 million for the playscape.
Barrow said the amounts for the construction phase were not “bids” but “loose estimates” when the purchase contracts were signed with the city.
Additionally, MAD has also sought legal advice from the AML and learned that the private, nonprofit organization would not have had any legal means to request the additional money from the cit5y had the deeds already been turned over, Barrow said.
He reiterated Tuesday that the invoices have been paid, and additional city funding would serve as a reimbursement for MAD.
Costs
Information provided by Barrow came with a breakdown for the additional expenses, including:
• A total of $775,231.47 for the playscape, the most significant of which is $679,046.18 for an increase in overall acreage, which required additional playground equipment; security cameras; 14-foot tall fencing and lighting.
Barrow said the land acquisition from Union Pacific Railroad for the playscape came with more acreage than initially planned, bumping the size of the play area from 1.5 acres to 2 acres.
The actual cost of the property came to $492,967.55. An environmental impact study for the railroad property was $59,217.74, and constriction increase from a loose estimate of $2.2 million to $2.9 million, Barrow reported.
• Several change orders for the amphitheater, the largest of which was $282,520 to go from grass to artificial turf, drove up construction costs for the amphitheater from an estimated $6.4 million to $7.8 million.
The purchase price for the property was $680,000.
Barrow told EWB members that contractors are supposed to return next week to address problems with some of the playscape equipment, noting that the zip-line has had to be shuttered until the issues are repaired.
He also said that MAD is basing its request for the additional money on the distribution of the El Dorado Works tax, which allots 12 percent of tax revenues to the development of MAD, formerly known as El Dorado Festivals and Events, Inc.
“So you all will be getting your money now, instead of like everyone else, divvying it up,” EWB treasurer Alison Abson said.
In no uncertain terms, El Dorado Works board member Greg Downum told Barrow that he took issue with the process by which the request for additional funding was presented to the EWB.
“I’m just concerned about the level of overage, what’s been overspent,” Downum said. “I’m just not comfortable with how the process was followed. I think the notification could have come earlier.”
Barro reiterated that MAD spent the past several months closing out invoices and final expenditures and Downum doubled-down, saying that he was not debating deadlines, nor that he was opposed to the MAD project.
“As soon as you knew there would be a significant overage, the proper thing to do would have been to come to the board. We could have gotten a heads-up,” Downum said.
Barrow later conceded the point, admitting that “things have been handled differently.”
“We have a great relationship, and for us to continue, it has to be a two-way dialogue,” Downum said.
Hash said MAD and the city will work with the AML to straighten out the issue.
Barrow also told board members that more expenditures will be coming in relation to infrastructure improvements that contractors made to develop MAD.
The expenses will be addition to money the city has spent to install new water and wastewater lines, fire hydrants and drainage systems.
“It was a very undeveloped area,” Barrow said, noting that much of the infrastructure in the area surrounding MAD was built in the 1920s and 30s.
Robert Edmonds, director of public works, said the newly installed systems serve a broad area south of Main Street, not just MAD.
Edmonds and Kenneth Robertson, of the El Dorado Water Utilities, said similar work had to be done in the area of Washington and Locust when the El Dorado Conference Center was built in 2011.
Tia Lyons may be contacted at 870-862-6611 or tlyons@ eldoradonews.com .