Arkansas: Ballot Initiative Would Open Door to Let Local Governments Create Economic Development Districts

On November 3, Arkansas voters will consider Issue 3, a constitutional amendment to potentially expand the state’s economic-development tools.

If approved, Issue 3 would allow the Arkansas General Assembly to authorize Economic Development Districts within cities, counties or cooperative areas. These districts could finance economic development projects, issue bonds and levy taxes, assessments or other charges. Property within a district would be exempt from ordinary property taxes and instead subject to charges established under the new system.

The proposal is of special interest for the Marketplaces Industry because it extends economic development incentives beyond traditional industrial projects to commercial real estate and redevelopment and could ultimately create new financing options for shopping centers, mixed-use projects, redevelopment, parking, roads and other infrastructure needed to make projects viable.

A 2025 draft implementing bill—SB 647, which did not become law—specifically contemplated eligible projects including retail, restaurants, entertainment, housing, hospitality and infrastructure. The General Assembly would determine many of the operating details through future legislation to address how districts are created and governed, how charges are determined, how incentives are awarded and how existing property owners and businesses are treated.

ICSC will continue to monitor and report on this issue.

For more information contact Jim Hill at jhill@icsc.com.