The Little Rock Technology Authority board of directors on Wednesday (Oct. 11) revealed that the city’s taxpayer-financed startup incubator will be completed this week and come in $2.5 million under budget only six months after the downtown development first opened this spring.
In a brief monthly meeting, authority board members cheered the financial highlights of the Tech Park whose development was accelerated in 2011 after Little Rock taxpayers approved a $22.5 million sales tax referendum to finance the project.
According to the Tech Park’s financial report by board director Dickson Flake, capital costs for the completed first phase of the development ended at $21.3 million, 9.4% below the forecasted budget of $23.5 million. The biggest portion of the budget was $12.6 million in property acquisition costs and $6.8 million for construction.
“I think the people of Little Rock will be really pleased now only at what has been done, but what’s being done,” said Tech Park board member Jay Chesshir, also chief executive of the Little Rock Regional Chamber of Commerce.
Flake’s financial report also noted that the Tech park received about $90,000 in monthly rental income in September from the authority’s portfolio of downtown properties, including $18,700 from 39 tenants that lease space at the newly-renovated facility. Flake and Tech Park Executive Director Brent Birch also said the authority has received its final disbursement from the local bank consortium that financed a $17.1 million loan to fund the first phase of the development.
“All in all, I think the tenants are pleased in what we’ve being able to put together,” said Birch told board members. “Everyone in here are really getting settled, they’ve been here for six months now.”
In March, Tech Park officials delayed the grand opening of the long-awaited office space for emerging tech and startup companies for a month until the contractor completed final work on the multi-tenant, 38,000-square-foot facility located at the center of the downtown district in the 400 block of Main Street.
The now connected three adjacent properties, formerly owned by the partnerships headed by Little Rock billionaire Warren Stephens and the law firm of local attorney Richard Mays, is now outfitted with 76 private offices and 75 open co-working at the Main Street location. The six-floor complex is fronted by its only retail tenant, the heavily-trafficked coffee bar operated by Blue Sail of Conway that opened in late March. The taxpayer-supported project also includes office suites, meeting and event space, indoor bike racks, 24/7 access and onsite parking, and a corporate-level conference room named after former authority chair Mary Good.
At Wednesday’s meeting, Birch told Talk Business & Politics he and board members will soon begin the process of “formal strategizing” for the second phase of the multi-stage technology and research park. Following last month’s board meeting, Birch said the Tech Park’s newly-revised master plan calls for six stages of development with Phase Two now planned on the parking lot between the new Tech Park headquarters and the KATV building, located at the corner of Main and Fourth streets. The original plan called for five phases and second phase was to be located at the Tech Park-owned parking lot next to the Rose Law Firm on the opposite side of Fourth Street.
“(We) determined this property is not necessary for future phases and will not be pursued for purchase,” said Birch. He added that the next stage of the downtown tech village will include a mix of office space and a state-of-the-art wet/dry laboratory facility for computing and science research.
Once formal planning on Phase 2 begins, the Tech Park board plans to issue a request for bids for architect design services. The final four phases of the downtown project that are expected to be mostly new construction and include an 800-car parking deck, retail and restaurant space, and office accommodations for established tech companies.
Phase 3 and 5 plans will be evaluated following studies on what to do with the Five Main Place building when the state of Arkansas’ lease agreement expires in 5 years, and whether to move forward with plans to purchase the adjacent KATV building. Phase 4 is now targeted to be a parking deck along Scott Street, while the final stage will include new construction for more office and lab space at another downtown parking lot owned by the Tech Park located west of Main Street.
Birch said Tech Park officials are still in “a holding pattern” concerning negotiations on acquiring other well-known downtown properties, including the historic KATV building. He said KATV’s corporate parent, publicly-traded Sinclair Broadcasting, has not yet revealed its plans for a possible sale on the downtown offices that house Little Rock’s oldest continually operating TV station.
“We don’t need the building right now anyway. We’ll just keep doing what we’re doing until …,” he said.
In other board business, Tech Park official approved a 12% raise for Birch after a brief executive session, upping his annual salary from $120,000 to $132,000, effective immediately. The Tech Park’s lone employee received a 15% raise a year ago.
Authority Chairman Kevin Zaffaroni also announced he would step down from his post at next month’s meeting. Zaffaroni took over the helm of the seven-person board in March 2016, replacing Good who serve for several years. The former Acxiom Corp. executive said he was stepping aside to give others in the community an opportunity to serve on the public-facing board as it enters the next stage of development.
After the Tech Park’s monthly meeting adjourned, board members, Chamber officials and Little Rock Mayor Mark Stodola held a casual event on the sixth floor of the downtown development to highlight some of the successes of various startup companies that now that lease space at the facility.
The featured early stage companies included Bond.AI, Cobbler Media, Corporate Insight Strategy, Few and PFITR. Birch said the turnkey space earmarked for small or startup technology-based companies is now leased at 83%. Long-term lease space, which is 33% leased, is available on the 5th and 6th floors of the facility.