The Fort Chaffee Redevelopment Authority (FCRA) unanimously approved assignment of 200 acres from the Degen Foundation to the Arkansas Colleges of Health Education (ACHE) Real Estate Holdings at Thursday’s (July 21) meeting.
The move is an administrative procedure aiding the Arkansas College of Osteopathic Medicine in order to work within the framework of a $60 million grant that comprises most of the $106.9 million in funds the school has received since its announcement in 2014. Kyle Parker, president and CEO of ACHE, explained to FCRA board members that the ACHE LLC “will essentially hold the real estate to lease or sell property that fits inside” of its mixed-use designation.
“The reason for us doing that is so that we will have some taxable things, and we will have some nontaxable things that reside inside of that LLC,” Parker explained, adding that “tax lawyers and brighter people than I am said you need to spin that into an LLC.”
He continued: “The sole member of the LLC is ACHE, and the sole member of ACHE is the Degen Foundation, so everything is controlled with the same grant that has been done, and that’s how it will operate. So, if you grant this to us, our board will assign that land to the LLC, and the LLC will have a lease with the medical school building, for example. And then the medical school building will be paying payments to the LLC.”
From a taxation standpoint, “it just spins back around and comes right back to ACHE, the parent itself,” Parker said. The reason for this, in a nutshell, is that there will be “situations where a restaurant or hotel or ice cream parlor – who knows essentially – will need to be broken apart separately from the 501(c)(3).”
The Arkansas Colleges of Osteopathic Medicine will open in the fall of 2017 with 150 students, but land activity for ACHE begins sooner with an Aug. 9 groundbreaking planned for the previously announced $7.9 million Mercy Clinic-Fort Smith facility – ACHE’s first official tenant.
Work began in February 2015 on the $32.4 million facility located in the Chaffee Crossing area. The school will be housed in a three story, 102,000-square-foot building, and a fully operational osteopathic college is expected to serve about 600 students. Each class will have 150 students. Initial planning estimated that the new college would employ around 92 (full-time equivalent jobs) with an average salary of $116,000 – not including adjunct professors and other part-time support. College officials in recent months ramped up efforts to add faculty and staff in support of the fall 2017 opening.
REAL ESTATE SALES
Also Thursday, the FCRA approved $231,550 in real estate sales encompassing 16.5 acres. The first sale to Shire Inc., was for 13.9 acres at $14,500 per acre and completed the real estate development company’s option on 21.1 acres it had previously purchased from the FCRA for $211,000. Shire is receiving a credit of $60,500 on a sewer lift station to serve Phase II of its residential development, but the company will need to pay additional costs to extend sewer lines while FCRA pays for the line from Interstate 49 to the Stoneshire Phase I south property line on Chad Colley Boulevard.
The second transaction with buyer Larry Evans was for 2.6 acres and contained four buildings located on Taylor and Ward Avenues. The sale price was for $10,000 an acre plus an additional $5,000 for the four buildings. Evans will update and renovate the buildings for personal use and rent small office/storage areas to other tenants.
The FCRA voted unanimously to exercise its repurchase option from The House of Restoration Church. Pastor Tashala Devrow had submitted an extension request to the board, noting that “from a financial standpoint, we are not where we would like to be to begin the building process of building our church.”
Devrow continued: “I know without a shadow of a doubt we will build our new church on our property, but I’m unsure of when that will take place. We are currently still raising funds to be able to build. We are thankful to God for blessing us with this property and look forward to more funds being received to move forward with our building process.”
The FCRA voted to deny the request unanimously because The House of Restoration was already seven years into its contract and was only about “a quarter of the way” into its fundraising, according to FCRA Executive Director Ivy Owen.
No Church representatives were present at the meeting for comment.
The next regular meeting of the FCRA will be held on Aug. 18.