LR Tech Park votes to opt out of Venture Center lease, new HQ will be ready by 2017

As construction on the Little Rock Technology Authority’s multi-million dollar tech village picks up steam, the nonprofit’s newly-reconfigured board of directors voted Wednesday (July 13) to opt out of the agency’s lease at the downtown offices and apartment building that now house the Venture Center and its 15-week FinTech Accelerator program.

In a unanimous vote of only four of seven board members attending the monthly meeting, including one listening in by phone, the Tech Park directors agreed to pay a one-time $38,000 fee to get out of the current lease agreement by February 2017.

Tech Park Executive Director Brent Birch told the board members and small audience of about 10 people that the authority should not continue paying rent now that Phase 1 construction on the downtown technology incubator has begun and is on schedule to be completed by early 2017.

“It doesn’t make a lot of sense to hold onto to it,” Birch said of the Tech Park’s multi-year lease with a limited liability partnership fronted by Monarch Investment and Management Group of Franktown, Colo. According to Monarch’s marketing materials, the Colorado investment group owns six properties in the Little Rock area, including the Block 2 Lofts on Markham Street that house the Tech Park’s current offices.

Birch told the board the Tech Park has a one-time option to end the current $9,000 per month lease in early 2017, but has to communicate its plans to the owner by July 31. If the authority doesn’t opt out of the lease by the end of this month, then the rent will increase to $9,143 beginning in August and will increase to $9,329 and $9,515 per month, respectively, in the succeeding years. According to the Tech Park’s financial statement, monthly costs at the taxpayer-backed authority’s downtown offices amount to nearly $13,000, not including expenses for insurance, heating and air services, and maintenance.

Board chairman Kevin Zaffaroni agreed with Birch’s assessment and asked fellow board members Dickson Flake, C.J. Duvall and newly-installed director John Burgess for an affirmative vote. “It keeps us from having any extraneous real estate,” said the former Acxiom executive who took over as chair of the Tech Park’s board in February after longtime Tech Park Chief Mary Good resigned.

Following the unanimous vote in which Duvall participated by phone, board member and local real estate developer Flake told the other authority members that he is negotiating terms with the Colorado property owner to see if they will rescind the $38,000 fee if another tenant replaces the Tech Park on similar terms.

“I am hopeful that they will,” he said.

In other Tech Park business, the authority also approved a resolution to select a local startup firm, Redundant Broadband Development Group, as the back-up Internet provider to Ritter Communications of Jonesboro. In May, the authority unanimously approved a recommendation from Birch to hire Ritter as the incumbent vendor to provide broadband service for tenants who will lease space at the downtown tech village. Under the deal with Redundant, the local startup firm would provide backup broadband service at the Tech Park if Ritter’s connection went down.

Birch also presented a slideshow on the ongoing abatement and construction of the properties that were purchased earlier this year to jump-start the downtown project. Once in operation, the key pieces of the 40,000-square foot development to lure startups, entrepreneurs and maturing tech companies to the Little Rock area will be the three adjacent properties formerly owned by the 415 Main Group LLC, Five Main LLC and DMT Ventures LLC.

The 415 Main partnership was led by Little Rock Attorney Richard Mays, who accepted a $1.03 million offer from the tech park board in late November to purchase his centrally-located downtown law offices. The other two buildings at 417 and 421 Main Street, purchased for $11.6 million, were owned by a Warren Stephens-led limited liability partnership. That property will eventually connect to the Mays building once construction is completed, Birch said.

Wednesday’s meeting was also the first without colorful and controversial chair Good, who was replaced by Burgess as the University of Arkansas at Little Rock’s appointee. On June 29, the university’s recently retired Chancellor Joel E. Anderson appointed the president and co-founder of Mainstream Technologies in Little Rock to the post.

Board members Jay Chesshir, Darrin Williams and recent appointee Nancy Gray of UAMS were absent from this month’s conference. As the board meeting began, Zaffaroni joked that he hoped Burgess’s appointment represented a new era for the authority.

“Mary was here doing a tumultuous time, hopefully you’ll leave that ‘tumultuousness’ behind,” he said.