The Little Rock Technology Park Authority on Wednesday (Aug. 8) agreed to hire CDI Contractors LLC as the construction manager for the next phase of its unfinanced downtown startup village just as board members learned that the planned multi-stage development is near full occupancy and turning away potential tenants.
Following several weeks of presentations and meetings with four central Arkansas firms that made the list of finalists to lead construction of the potential multi-million dollar project, the seven-person board moved forward with plans to hire CDI out of a beginning pool of nine bidders.
“We started this whole process with the understanding that we don’t have the money to do it and we’re not going to go beyond the schematic design before we … go out and raise the money,” said Tech Park board member Dickson Flake, a local real estate developer.
CDI, which is owned by publicly-traded Dillards Inc., was the clear choice after board members heard presentations in early June and July from Kinco Constructors, CDI Contractors LLC, Clark Construction and Nabholz Construction. The master plan for the six-stage downtown project calls for the second iteration of the tech village to be built in the constricted space between the KATV Channel 7 building at Fourth and Main Streets and the Tech Park headquarters at 417 Main St.
Now with CDI on board, the Tech Park will begin internal discussions on the huge task of raising capital to finance the project only 14 months after the May 2017 grand opening of the first stage of the downtown development that was largely funded by a $22.5 million sales tax referendum.
“We are very diligently working this process,” said Tech Park Chairman John Burgess, who is also president and CEO of Little Rock-based Mainstream Technologies Inc.
TECH PARK: NO VACANCIES
The Tech Park first hired Little Rock-based WER Architects in late December from a beginning pool of six companies to serve as the architectural firm for the future STEM-focused second phase of the project that is expected to include space for research and wet/dry labs, a key feature of the authority’s request for proposal.
According to Flake and Tech Park executive director Brent Birch, the next step for the project is to reach an agreement with CDI and then begin working with the local construction firm and WER Architects to come up with a design concept that will blend with the authority’s current multi-tenant, 38,000-square-foot facility located next door.
“I think it is safe to say we are actively looking for private and public money …,” former Acxiom Corp. executive and Tech Park board member Kevin Zaffaroni said in response to questions about potential funding.
Little Rock Chamber of Commerce President and CEO Jay Chesshir, who is also part of the seven-person board, quickly chimed in, “We will be searching high and low for any and all (financing) options.”
Earlier in the meeting, the board discussed the urgent need for additional Tech Park-branded office space after Birch apprised the seven directors that the downtown tech incubator in July reached an all-time high of 47 companies that have leased space on the first five floors of the six-story building. Those companies have between 90 and 100 employees, he said.
Chesshir added that he is also working with the Tech Park’s first and longest-running occupant, the Little Rock Venture Center, to lease the spacious sixth-floor at the top of the downtown office building that has been mostly unoccupied since the authority began leasing space in early 2017.
Those discussions, Chessir said, have developed over the past month after Gov. Asa Hutchinson and FIS Chairman and CEO Gary Norcross announced on July 18 to extend the state’s partnership with the Jacksonville, Fla.-based publicly-traded company to host the Venture Center’s three-year old Fintech Accelerator program.
Gov. Hutchinson said he hopes that partnership will further highlight the city as a growing “microhub” for financial technology startups. This year, 10 companies were selected from a pool of more than 280 applicants from 40 countries, and then were given $75,000 after completing the program that included “in-depth mentoring and training” from dozens of executives and mentors in the financial and banking sector.
Chesshir said the Venture Center, which provides training and services to help budding entrepreneurs turn their startups into viable companies, is looking at a five-year agreement to lease the sixth-floor space that overlooks the city’s downtown area on Main Street. The Little Rock group, he said, will continue hosting the Fintech program at the Tech Park but is also looking to expand its range of startup activities.
“I wanted you to know that the Venture Center and FIS are very pleased that (they) are going to be able to lease that entire space going forward,” said Chesshir.
Tech Park board member C.J. Duvall, a former Alltel Corp. executive who also served as a mentor for the 12-week business bootcamp, said the Fintech program is important to the city because FIS’s origin as a Fortune 500 company began only a few blocks from the downtown project. He added that many of the companies that participated in the Fintech training program are now looking to remain in Arkansas.
“It would be a neat opportunity here to create three or four ‘FIS-es,’ but we need that investment here,” Duvall said of the former Arkansas tech firm that reported annual revenue of more than $8 billion in 2017.
That Venture Center lease agreement and the fully-occupied Tech Park space led Birch and the Tech Park board members into another long informal discussion on how the downtown startup landlord can handle the growing demand for extra office space for local startup and tech firms in the downtown area.
Just last month, Birch said leases for new 5th-floor offices, which were just outfitted with new furniture and office suites for larger startup firms needing extra room to grow, were quickly snapped up in just a few weeks after they went on the market. “We can only accommodate so many people,” he said.
Flake later told board members that the Tech Park’s dilemma is a good problem to have as business activity picks up and the authority begins looking for funding for the next stage of development. He added that the authority can always find other downtown space to lease to prospective tenants until the project’s second phase is ready for occupancy.
“Even if we had the money tomorrow, we are still talking one or two years,” he said.