Little Rock tech park development still stalled as authority seeks to close key financing, real estate deals

The initial phase of a $24 million downtown tech development remains tied up in negotiations as the Little Rock Technology Park Authority board learned Wednesday that a bank consortium-backed financing deal and an $845,000 buyout offer for a crucial piece of downtown property were still on hold.

Brent Birch, executive director of the publicly-financed authority, told Tech Park board members that he was still awaiting a signed letter of commitment from a group of six local banks, let by Conway-based Centennial Bank, to move forward with a $17.5 million financing package to jump start the much-talked about downtown project to spur the city’s startup and tech community.

“My notes show that I am waiting to get a commitment letter back from the banks. The banks have got our (proposal), but we are still missing a couple of pieces,” Birch said during the meeting at the downtown Little Rock Venture Center.

The tech park chief explained that attorneys from Little Rock law firm Mitchell Williams are negotiating with the banks’ legal counsel, hammering out responsibilities and details of the financial arrangement. He said once a deal is reached, the agreement can then be reviewed and approved by the seven-person board.

Board member Jay Chesshir, president and CEO of the Little Rock Chamber of Commerce, said he hopes a copy of the agreement could be publicly disseminated so that any questions concerning the financial arrangement will be out in the open. The Arkansas Federal Credit Union (AFCU) has threatened the board with legal action if it did not cancel a proposed deal for the authority to negotiate with a consortium of local banks for the proposed $17.5 million financing package.

“From the perspective of our review and the press review, what we might to do is send out a list of completed information, that way everyone gets it and the public gets it,” Chesshir said.

The other crucial item on Wednesday’s agenda was a standing buyout offer from the authority on Nov. 2 to purchase the law offices of Little Rock attorney Richard Mays at 415 South Main Street for $845,000.

Following a recommendation by Birch at the authority’s previous meeting only nine days ago, the seven-person board voted unanimously to extend the offer to the Little Rock attorney on Tuesday (Nov. 3), based on the higher of two appraisals from local firm Ferstl Valuation Services.

Immediately after that meeting, Mays said he would consider all his options concerning an $845,000 offer on the table from the tech park board. “I plan to consider their offer and take all of the issues under consideration and respond,” Mays told Talk Business & Politics. “I have been in this building a long time, it may be difficult to make a decision … but I’ll do the best I can.”

At Wednesday’s meeting, Birch told the board members that “the offer has been submitted to (Mays) as approved by the board,” but “it has not been accepted.”

Board member Dickson Flake, who is in ongoing negotiations with Mays, added he believes the board will not receive an offer from the Little Rock attorney by its Nov. 16 deadline. “At this point, there is no indication that (the offer) will be accepted,” Flake said.

Tech Park chair Mary Good, who stated at the last meeting that the authority did not want to give the public impression that it was trying to take May’s land, again stressed she hopes the board does not have to act with such proceedings. “Let’s hope we get a response,” she said.

Still, if Mays refuses the offer, the board did vote 5-to-1 at the last meeting to hire Mitchell Williams to prepare an “eminent domain” condemnation lawsuit by Nov. 18 with the stipulation that Flake would continue talks with Mays in hope of reaching a resolution.

Board members have also argued openly about whether the “public use” condemnation process, which gives public bodies to power of the government to take private property for the use and benefit of the public, is legal in this situation. Board dissenter Darrin Williams, a banker, attorney and a former high-ranking Democratic state lawmaker, has publicly sparred with Good over whether or not the board can win a drawn-out case against Mays if the issue goes to court.

In other business, the tech park board entered into a 15-minute executive session to consider “employment matters” at the end of the meeting. After emerging from secret, the board voted unanimously to give Birch a 5% raise. He was hired as the authority’s lone employee in July 2014 at an annual salary of $100,000.

Other meeting highlights included:

·         Due diligence work continues on downtown properties owned by limited liability partnerships headed by Stephens Inc. CEO Warren Stephens that the authority is seeking to purchase for a sum of $10.8 million. Birch said he has reached an agreement with Smith & Goodson to do the title survey work and they are expected to start in the next week or so. The environmental site assessment work will soon be performed by a contractor hired by the state Department of Environmental Quality.

·         The LR Tech Park @ 107 Space is back up to full occupancy with 20 current members. New tenants include OneTwoSee, Nushores Biosciences and Infolob Solutions.

·         David Cummings of the Atlanta Tech Village will speak at a meeting scheduled on Nov. 18 at the Little Rock Chamber of Commerce.