Metrocentre commissioners reaffirm earlier vote to dissolve Little Rock improvement district

The commissioners of the Metrocentre Improvement District Commission on Tuesday reaffirmed an earlier vote from a March meeting approving dissolution of the pro-downtown entity once the board receives a petition from a Stephens Inc.-led group wanting to shutter the 43-year old business improvement district.

During an early morning meeting at the headquarters of the Downtown Little Rock Partnership, Metrocentre attorney David Menz told the group it was inevitable that a Stephens Inc.-led initiative to would soon get enough petitions to dissolve the improvement district authorized by the Legislature in 1973 to improve the city’s downtown area through tax-free bond issues.

“There have been a good number of petitions that have been signed, but I have not seen them yet,” said Menz, a local attorney and downtown property owner. “I have had calls from some of the properties owners asking, ‘What is the position of this Commission?’ – and I’ve said they have voted to dissolve the district if the requisite amount of petitioners voted to have it dissolved.”

Menz also told commissioners he has discussions with small and larger property owners that are part of the 230-plus members of the urban improvement district, including Stephens Inc. attorney David Knight, who has served as a spokesperson for a group of large downtown property owners who are looking to dissolve it.

Last week, Knight was able to convince the Tech Park board to unanimously adopt a measure to dissolve the local business incubator’s 3.1% stake in the city’s Metrocentre Improvement District Commission that it received after the $11.6 million purchase of two partnerships affiliated with Stephens CEO Warren Stephens for nearly 142,500 square feet of building space, or 3.25 acres, in the downtown area.

Stephens, which owns the Capitol Hotel and the downtown skyscraper bearing the investment bank’s name, has a 15% stake in the district and recently approached other property owners in the downtown area to get enough petitions to dissolve the district. Knight, executive vice president and general counsel for Stephens, told the Tech Park board members that after the Metrocentre’s 30-year old bonds were retired several years ago, many of the districts more than 230 members thought that the entity’s operations would simply end.

According to Menz and Knight, the improvement district now owns a downtown parking deck lease at Sixth and Scott streets, a large Henry Moore sculpture at Fifth and Main, and a “small amount of cash” from the parking agreement.

At Tuesday’s Metrocentre board meeting, Menz said some of the smaller downtown property owners are concerned about the clean-up of their properties if the improvement district is dissolved. Menz said the Downtown Little Rock Partnership makes use of the “pass-through” fund to clean up downtown properties, pick-up trash, spray lots, and do other small maintenance jobs. Menz added there had been some “misinformation and concerns” from some property owners about the $100,000 assessment fee and how it has been used.

“One of the property owners went as far as to look at what he is going to pay this year and divided out, and said $2.12 a day is a really good deal,” Menz recalled. “I said: ‘It is interesting that you feel that way.’ But the feeling among a lot of the larger property owners is they have their own security and their own clean squads.”

Menz also said there have been some questions raised by out-of-state property owners about maintenance issues, but he said the Stephens-led group is close to the number of petitions necessary to dissolve the Commission.

“So here we are. I think it has been a slow process …, but I understand they are least close to 50% now,” he said.

Later in the meeting, Menz and Metrocentre Chairman Bob Shoptaw explained to other commissioners that once the group is dissolved, it will be up to the city of Little Rock to pass a resolution to officially shutter the improvement district. Once that happens, all of the assets will revert back to the city.

Gabe Holmstrom, executive director of Downtown Little Rock Partnerships, and Little Rock attorney Scott Schallhorn, president of the downtown group’s executive committee, told the Commission they were agreeable to whatever decision the Metrocentre board decided to make. Little Rock Mayor Mark Stodola, who did not attend the meeting, also sits on the executive committee with Holmstrom, Schallhorn and Shoptaw.

And although the panel took no action concerning the dissolution process, Shoptaw did ask the group to approve two other measures to make sure the Downtown Partnership is able to continue providing ongoing services to the downtown property owners until the city takes over the district.

At the end of the meeting, Shoptaw reminisced about how the improvement district was instrumental in leading the discussion that led to the renaissance and growth in the downtown Main Street area and the River Market district.

“Sitting here at the 11th hour, we look over our shoulders and there have been plenty of challenges over the years,” Shoptaw said. “But in some ways, we have gone through the tough time, (and) we are seeing the downtown area gain momentum and grow out of the River Market and I like to think that the Metrocentre (commissioners) played a small part in what we are seeing now.”