The Fort Chaffee Redevelopment Authority (FCRA) real estate review committee on Wednesday (May 16) voted to reject a second offer from Memco on approximately five acres of Roberts Boulevard property across from Graphic Packaging.
Memco had plans to build a warehouse/office space of 27,000 square feet for its Fort Smith operation, with designs on future expansion at the site.
Headquartered in Hollister, Mo., the company is a family-owned business started by Julie and Robert Middleton. Memco maintains Arkansas-based sales and distribution centers in Fort Smith, Jonesboro and Springdale, and locations in Harrisonburg, Va., and Kansas City, Kan.
Memco is a private company and does not share financial data, but its LinkedIn profile shows it employs between 51-200 employees across all locations.
They began working with Fort Smith regional customers in 1999, establishing an office in 2009. At a FCRA meeting in April, Larry McGriff, vice-president of operations for the company, said Memco plans to be in Fort Smith “for the lifetime of the company,” adding the initial offer of $25,000 an acre would leave enough room to sustain the business’s growth “up to 50,000 or 60,000 square feet.”
The company’s offer also asked FCRA to handle the utility extensions — an expenditure typically shared by the city of Fort Smith that could cost anywhere from $130,000-$200,000 depending on the size of the lines that would need to be installed (10-inch or 18-inch, respectively).
The company’s second offer included the utility extension request, but raised the proposed purchase price to $35,000 an acre, increasing the overall total Memco was willing to pay by $50,000 to $175,000. For committee member Don Keesee, who made the motion to deny, the problem with the offer went beyond pricing.
“For any dollar amount, for that entity, that is not the place for it,” Keesee said, adding that after two similar warehousing offers, the trust needed to consider changing the land use map.
“Right now, we do show it industrial. Let’s change it to commercial, retail, whatever all that would be. It backs up to the college’s property. It’s sitting on the freeway. The minute that a bridge is announced — not built, but just announced — that property … (someone) would pay $150,000 an acre for it and not even flinch.”
Bob Cooper, who manages real estate transactions for FCRA, said he tried to source other locations at Chaffee Crossing for Memco, but the company didn’t find the other options accessible. For committee member Paul Beran, “none of the sites should be considered.”
“All of these (nearby) industries are producing something. What if a company comes to us, building some computer product or a more 21st Century kind of product that is more high value than just storing things?”
Beran believed it was in the best interests of the property to hold over the property for a use more in line with the current “industrial village” use.
Committee chairman Galen Hunter recommended asking Memco to take a second look at additional properties at Chaffee Crossing, but for now, the trust is not willing to budge on the location in question.
Talk Business & Politics reached out to McGriff on Thursday afternoon for comment. McGriff would only say the company’s next move was “TBD (to be determined) at this point.”