The Little Rock Technology Authority’s board of directors had a robust debate Wednesday (April 11) on the future of the downtown startup village as the taxpayer-financed nonprofit moves forward with design plans for a second stage of development.
The Tech Park directors took up nearly an hour-long discussion after Executive Director Brent Birch presented the board with a draft proposal of an architectural contract that could cost up to $150 per square foot to handle the design and planning of the unfinanced second phase of the downtown startup village.
In outlining the contract, Birch told board members he has held long talks with Little Rock-based WER Architects ever since the board selected the local architectural firm out of a beginning pool of six companies to lead the project on Dec. 20.
“This was a tough one based on a building we are not 100% sure of how big it is going to be, or what it is going to look like,” Birch said of the three-month negotiations. Initially, the Tech Park’s request for proposals called for architectural firms to design a 17,500-square-foot building between the Channel 7 building at Fourth and Main Streets and the authority’s headquarters at 417 Main St.
Under the plan presented at Wednesday’s board meeting, the board is hoping to design a STEM-focused building centered around the Little Rock firm’s expertise in research and wet/dry lab space design, a key feature of the authority’s request for proposal. Based on the board’s square foot ceiling rate, the design phase of the unfinanced project costs are estimated at between $1.24 million and $1.5 million.
Before approving the contract, Tech Park Director Kevin Zaffaroni urged board members to seek public input to come up with an architectural design that would create a “street buzz” for the city’s downtown Creative Corridor that combines an arts, entertainment and business district within the mixed-use neighborhood in the heart of the city.
“Is anyone talking to us or thinking about – while we are in the design phase – what we are going to do be a good member of Main Street?” asked Zaffaroni. “I’m sure there are people that have a plan that ‘Wow, this would be great for Main Street.’ Because we are using public funds for this, I think we should know what that is.”
After considering Zaffaroni’s question, Tech Park directors Jay Chesshir and Dickson Flake told the former Acxiom executive that the authority needed to first consider the nonprofit’s public mission to lure startups, knowledge-based firms and entrepreneurs to the Little Rock area.
“When you look at the core of (downtown Little Rock), I think you have to look at what assets are missing and what would make this more of a 24-hour marketplace as opposed to just being a business marketplace,” said Chesshir, CEO of the city’s Chamber of Commerce. “But then you have to weigh that against our purpose for building this (development).”
Flake added that the authority needs to wait and react to what the market demands. Like Chesshir, the local real estate developer said the Tech Park board is constrained by the authority’s public purpose and private sector competition for downtown office space.
“If there was a market for an Amazon or a Walmart store, they would be here,” Flake said. “We will be doing things for a demand that we might now not have.”
Toward the end of the long discussion, Chesshir said he believes the authority must be open for a design that “creates synergy” with the local downtown residents and the city’s Creative Corridor. The city’s top job recruiter later added that there is a strong need in the downtown area for office space for growing technology firms that have moved beyond the startup phase and are now full-fledged companies, citing Apptegy and First Orion.
More than two years ago, WD&D was selected by the Tech Park directors to design the authority’s current $30 million-plus multi-tenant, 38,000-square-foot facility located at the center of the downtown district on Main Street. The downtown development was accelerated in 2011 after Little Rock taxpayers approved a $22.5 million sales tax referendum to finance the project.
“This has become that startup facility that then allows for the flow for mature companies to go into a building like we are talking about and there’s space there for that next move,” Chesshir said at the Tech Park’s new boardroom.
‘PAPER TIGER’ PROJECT
Toward the end of the lively discussion, Flake said it was premature for the authority to move full-speed ahead into the second phase of the project without architectural designs and financial backing.
“We are what the industry in project development calls a ‘paper tiger,’” Flake said. “Until we have financing for the whole project and can show what we are going to do with it — it’s like a convention center trying to sell space when they haven’t financed the convention center. So, we are not real to a CEO making a decision.”
Following the long debate, the board gave Birch unanimous approval to move forward with finalizing the contract with the local architectural firm. After the meeting, the Tech Park’s lone employee reiterated there has been no discussion on the final cost or financing for the second phase of the development.
“We will go through the planning process and then firm up what that number is, and that is what they’ll get paid,” Birch said of the WER contract. “Then they will take those plans and tell us this is how much the building will cost.”
In other business, Venture Center CEO Lee Watson told the Tech Park board that Gov. Asa Hutchinson and an executive with Jacksonville, Fla.-based Fidelity Information Services (FIS) will announce the 10 companies selected to participate in the 2018 VC FinTech Accelerator program on May 2.
Backed by the Fortune 500 financial technology firm and run by the nonprofit The Venture Center, a year ago the program received close to 300 applications from early-stage financial tech companies in 40 countries.
Last year, chosen companies were each given $50,000, with a potential to earn an additional $100,000 to $300,000, and participation in a 12-week program that includes “in-depth mentoring and training” from FIS and The Venture Center. The program concluded with a Demo Day at the Clinton Presidential Library.
After hearing from Watson, the Tech Park board approved a three-month rental agreement to house the 10 companies on the development’s empty top floor at a total cost of $24,000. Under the agreement, the Venture Center will make a $10,000 cash payment to the Tech Park and provide the authority with a $14,000 in-kind sponsorship for the upcoming Fintech program.