Matt Mershon with content partner KATV Ch. 7 reports:
Little Rock’s city board of directors voted unanimously to accept the consent agenda Tuesday night, including the appropriation of nearly $6.8 million in advance funds to the Little Rock Tech Park Authority. LRTPA said the money was essential to purchase three buildings that will be the anchor of the proposed tech park.
The funds allocated on Tuesday were dollars already accrued by the Little Rock 3/8th cent sales tax, voted in by city residents in 2012. When the sales tax was voted on, $22 million was set aside for Tech Park purposes.
Tech Park Executive Director Brent Birch, said they asked for the money already collected to finally get the ball rolling on a project without much to show over the last few years.
“We can buy some of the properties in chunks, versus having to take it all at one time,” said Birch.
The money appropriated by the city on Tuesday is for Phase 1A of the project – which is roughly 80% of the total property expected to be acquired for the future Tech Park campus.
Birch said the money appropriated from the city won’t cover the whole purchase price and construction of Phase 1A – but rather approximately half of the purchase price of two Stephens-owned buildings and the Mays Law Firm on the northeast corner of Main & Capitol in downtown Little Rock.
The purchase price for 415, 417 & 421 Main Street in downtown’s “Creative Corridor” is right around $13 million and doesn’t include an additional $11 million in construction-related costs.
“Of course there’s furniture and the professional services associated with the project – architects, engineers,” said Birch.
For the rest of the money, LRTPA is looking for investment from local banks to the tune of about $17.5 million in a fixed-rate loan with a six-year term. On Monday, the Tech Park board published a 67-page request for proposals to start progress on acquiring private funds.
But what may be daunting for investors is the lack of commitment. While there is interest from several large companies – Fortune 500 and Fortune 200 companies, according to Birch – there is only one tenant actually signed up to be housed in the proposed Tech Park, and it’s not a tech company.
The Arkansas Department of Higher Education currently leases part of the building at 421 Main (the former Exchange Bank Building), the lease locked in for the next 12 years – providing cash flow of a little more than $1.1 million per year before any new tenants arrive.
“You actually have to have a facility for these companies to call home and actually set up shop in,” said Birch. “That’s what we don’t have and this purchase will allow us to get started.”
If private financing is secured and property acquisition goes to plan, construction on Phase 1A could begin as early as January 2016 and if construction stays on schedule, LRTPA expects results by next summer.
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