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High Demand Foreseen for State’s New $10M Site Development Program

4 min read

The Arkansas Economic Development Commission announced in a press release on Monday the creation of the Arkansas Site Development Program, a program designed to distribute $10 million in matching funds for site development programs throughout the state.

Funding from the Arkansas Site Development Program can be used for a range of projects, including extension and improvement of public infrastructure, dozer or dirt work, grading, site mitigation, site rehabilitation, due diligence study costs and other site development-related activities deemed necessary by AEDC.

The money is intended to be spent over a two-year period.

Clint O’Neal, executive director of the AEDC, said the two-year time frame is to prepare for longer projects. Some grants, such as soil boring or due diligence studies, might take just a few months. But some communities will likely apply for infrastructure projects, such as extending water and sewer lines, clearing trees and projects that can take longer to execute.

O’Neal said there has already been significant interest in the program. The AEDC hosted a Zoom call on Thursday to share information on the program and around 40 community members and interested businesses participated. 

“We know that there is so much more demand out there than [can be funded by] the $10 million,” O’Neal said. “So it’s kind of challenging to gauge how many applications we might have and matching that to the funding, but I suspect we’ll have a lot more demand than what we are funding.”

The eligibility rules for the sites are that they must be a greenfield site of at least 30 acres and an economic development organization, chamber of commerce, or a city, town or county in Arkansas must own them.

Interested groups must present a minimum match of 5% of the project’s estimated cost. The match can be made in cash or through in-kind services. Examples of an in-kind service can be a county with the equipment to perform some of the work to extend a road or do some site grading. Or, an engineer or a volunteer with the chamber of commerce could dedicate their time to participating in the project with a professional service.

Although there is not a cap on the grant amount a single project can receive, O’Neal said AEDC will act diligently to ensure the funding isn’t taken up by just a few projects.

“We wanted to create some flexibility not knowing exactly what the response would be,” O’Neal said. “I think we will be in a better position to make some of those determinations once we look at all the applications after the application cycle has closed. No, we did not put a cap, but we’ll certainly want to leave room to fund several projects.”

Arkansas is not the first state to introduce a site development program. Several others, including border states Tennessee and Mississippi, have similar programs.

O’Neal said the AEDC studied several different models of how states are running similar programs. He said Arkansas, unlike some states, is not looking to get into the business of owning sites or providing grant funding for acquisition of sites. 

“For us, it’s more about really supporting communities that have taken on the initiative themselves to either own land so that they could control it or find the prospect that they really want that’s a good fit for their community and to be able to sell it at a reduced rate or give it away with with a contract in exchange for jobs,” O’Neal said. “Communities in Arkansas that have really taken on the initiative to own property, option property and put themselves in a position for success — this really accelerates their efforts.”

O’Neal said common priorities for businesses are creating speed to market and eliminating risk. Companies can start construction immediately if a site is already served by infrastructure and shovel-ready, putting them in a position to move faster versus if they had to worry about various site development components.

Once demand is measured after the application process closes, O’Neal said he thinks the potential to increase the funding could be a part of the discussion in the next legislative session, starting in January.

“I think it’s something that will really have a lot of statewide support,” O’Neal said. “I could see us going back to the legislature to have discussions about what that might look like for the future of the Arkansas’ site development program. Certainly nothing has been committed by the governor’s office or by the Legislature, but certainly I think it could be part of the conversation.”

The program is geared around supporting local economic development organizations and local community leaders, O’Neal said.

“We are not looking to enhance the value of privately owned sites,” O’Neal said. “We are looking to accelerate the economic development efforts that communities have undertaken by going down the pathway of acquisition of these sites and just accelerating the site development initiatives that they have.”

The program was first proposed in January 2023. Lawmakers approved funding three months later.

There is not a fee to apply. The application can be found on the AEDC’s website and will be open from June 10 until Sept. 2.

After the deadline, an AEDC committee will review requests and send award notices in November.

 

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