City of Fort Smith to lease Blue Lion as meeting space for board of director, other uses

The Fort Smith Board of Directors on Tuesday (April 6) approved a resolution authorizing an agreement with the Board of Trustees of the University of Arkansas wherein they would assume the lease of the Blue Lion facility at 101 N. Second St. in downtown Fort Smith.

Assistant City Administrator Jeff Dingman has said the facility will be used for meeting space for the BOD and other city commissions and boards.

The UA has leased the facility as the Blue Lion at UAFS Downtown since 2012. They paid an initial payment of $15,005 and make monthly payments of $5,408 in a 15-year lease to own agreement with the Central Business Improvement District (CBID), which owns the building, city records show. At the end of the 15 years, the university had the option to purchase the building for $10, Dingman said.

The agreement will have the city take over the lease for the remaining 73 months in the terms of the lease. The agreement had to be approved by the CBID before it could move forward. The CBID approved the lease assignment at a special board meeting Tuesday morning. The Blue Lion is owned by the CBID, financed through First National Bank, leased to the University of Arkansas at Fort Smith. UAFS is about nine years into that contract. Approximately half of the building has been paid down, said Bill Hanna, CBID board chair.

“The university no longer has a need for it, and the city has recognized that they can utilize the building. Our thought is that they simply take over that lease, which is a lease to purchase after the term is up and the bank would continue on the same terms that they financed all along,” Hanna said.

Sam Sicard, president and CEO of First National Bank of Fort Smith and CBID commissioner, said the bank had no objection to the city taking over the lease.

The University of Arkansas System has indicated they are willing to assign the lease to the city though the city does not have a signed copy of the lease agreement yet from the university, Dingman said. The board approval will allow the lease to begin as soon as signed documents are received from the university, Dingman said.

The board also approved $118,022 be added to the 2021 budget to pay for the lease for the year and for upgrades. Of that $50,000 would go to the purchase of small equipment. City Administrator Carl Geffken has met with university officials to review equipment at the building, including a sound system, light system, banquet tables, more than 300 chairs, risers, etc., which comes to about $30,000. The city wants to purchase other equipment for the building including a movable dais. Other expenses include $48,672 for lease; $1,350 for insurance; $9,000 for utilities and $9,000 for outside services.

The vote to approve both the rental agreement and the budget adjustment passed six to one with Director Neal Martin opposing the actions because of the cost to the city. Total lease payment cost to the end of the contract, which is approximately six years, will be about $390,000, Dingman said. At the end of the lease contract, the city can purchase the building, which has a value of around $553,000, he added. The building has a total of 18,000 square feet, 10,000 on the first floor and 8,000 square feet in the basement.

“This is a bargain for the square footage,” said Director Kevin Settle.

The city has held its board of director regular meetings at the Fort Smith Public School’s service center on Jenny Lind Road. The city paid $3,000 a year for use of that building but had received notice in fall 2020 that they would not be able to use that building after the pandemic ends, Dingman said.

The board of directors has in the past held its study sessions at the Fort Smith Public Library. During the COVID-19 pandemic, the city has used the Fort Smith Convention Center’s exhibit halls for board of director study sessions and regular board meetings. Many city boards and commissions also have been using the convention center for meeting space during the pandemic, Dingman said.

The Fort Smith Board of Directors unanimously approved a contract to allow Los Angeles-based Oak View Group (OVG) to manage the Fort Smith Convention Center beginning Jan. 1. The contract has an initial 3-year term, with options for up to seven subsequent one-year terms. The city will pay a management fee of $8,500 a month, subject to annual CPI adjustment, plus commission on food and beverage sales. There also will be possible performance and sales commission incentives. Dingman said. OVG is willing to accommodate the city with their meetings but doing so would not necessarily be the best option for the convention center.

“The Blue Lion is already set up as a small performance area, but it can certainly be utilized as a public meeting space. There is a stage area and pretty big room for the audience to sit and attend public meetings,” Dingman said.

The city has to set up audio/visual equipment before each meeting, whether at the convention center or other locations, in order to livestream the meetings. City leaders want a permanent location where they can keep the AV equipment permanently set up and ready.

Though the city would use the space primarily for board and commission meetings, they also hope to use some of the space for permanent office space for the Advertising and Promotion Commission, moving them out of the Miss Laura’s Visitors Center, which would allow Miss Laura’s “as a proper tourist location,” Geffken said.

The city also could rent the facility to outside groups for meetings and events.

“I am for this. I think it utilizes a building that is not being used,” Settle said. “I do like the ability to rent it out to other functions if we can do that to help out with the (expense)…. I think the location is great. It will put us downtown and allow us to be here. … It’s a good building and having a permanent city board member location going forward will be something good for the citizens to have.”

The Blue Lion venue began as the entertainment venue Second Street Live. At the time UAFS officials acquired the property in 2012, they said the building would allow the university to expand its arts programs. The facility opened in early 2010 at a cost of more than $2 million. Renovations to the building began in November 2009.

UAFS entered into an agreement in late 2020 with The Bakery District in downtown Fort Smith – which is owned by Hanna – where it will move its Center for Business and Professional Development and the Family Enterprise Center, both of which are now housed in the Flanders Building on the UAFS campus. The newest regional office of the Arkansas Small Business and Technology Development Center, which will be a joint venture with UAFS and the University of Arkansas at Little Rock.