CBID to hold special meeting about possible purchase of Fort Smith city hall

The Fort Smith Central Business Improvement District Board has called a special meeting to once again discuss the possibility of purchasing the building at 623 Garrison Ave., which is used as the Fort Smith City Hall, and then leasing it to the city.

At the CBID’s meeting Aug. 15, commissioners discussed the feasibility of the purchase, which would likely cost around $4 million. Commissioners expressed the desire to do whatever possible to keep the city offices downtown. The idea has been to purchase the building and then lease it to the city much like the CBID does now with the Blue Lion in downtown Fort Smith. The Fort Smith Board of Directors uses the Blue Lion for its board meetings and many of its public hearings.

Fort Smith-based Southland Management Group owns the building. Aaron Littlefield III is listed as the manager for Southland. Littlefield is active in fuel service and fuel delivery businesses in the area.

The CBID board in July authorized Bill Hanna, board chairman, and Dingman to initiate discussions on the feasibility of such a project. The building was appraised at $3.98 million earlier this year. According to Dingman, it was last purchased for approximately $3 million.

‘STILL JUST DISCUSSION’
A special CBID meeting has been scheduled for 4:30 p.m. Tuesday (Sept. 24) at the Blue Lion, prior to the Fort Smith Board of Directors study session, to discuss the draft lease agreement with the city. That draft lease agreement is also on the agenda for the board of directors study session.

“It’s all still just discussion. The CBID wants to discuss with the board the idea, so they know if the board is supportive of them pursuing the project. No decisions have been made yet, and probably no decision will be made/approved tomorrow other than to proceed to the next level of discussion,” said Deputy City Administrator Jeff Dingman.

The CBID has not yet made any agreement to purchase the building, Dingman said.

One of the purposes a CBID can fulfill is the facilitation of public building improvements within its district boundaries, a memo from Dingman on the subject states.

“Regarding the recent discussions of a City Hall project, the CBID has expressed specific interest in the City of Fort Smith’s Administrative Offices remaining in downtown Fort Smith,” the memo states.

The city has leased office space in the Stephens Building at 623 Garrison Ave. since the 1970’s. Although renovation has been discussed, the CBID is focused only on the purchase of the building, the memo states.

“Mr. Bill Hanna, CBID Chair, has discussed a potential purchase of the building with the building’s owner, who has expressed a willingness to sell the building. If the CBID is able to purchase the building, for which it would require a loan from a local bank, it would be for the express purpose of leasing it to the City of Fort Smith at a lease rate sufficient to pay the obligation on the loan over a length of time acceptable to the city. The lease would include a provision that the City could purchase the building from the CBID for a nominal amount when the CBID’s loan is paid. This is similar to the current arrangement at the Blue Lion building, which the city will be able to buy for $10 in or about April, 2027,” the memo states.

BUILDING SIZE, HISTORY
The building at 623 Garrison has about 60,000 square feet of usable space, Dingman said. The city uses approximately 34,000 square feet of the building for city offices. The Fort Smith Board in March approved an option for a five-year lease of the space, with rent at $33,500 per month – $1,000 more than the rent charged in the lease that expired Feb. 29 for this year – and $34,500 a month in 2025. Rent will go up $1,000 a month each year through 2028. City Administrator Carl Geffken said this is the same increase in rent the city has paid annually in the past.

The city occupies all of the third, fourth, and fifth floors of the building along with office space and a vault on the first floor and the breakroom and bathrooms on the second floor. There is more space available on the first floor and the second floor and the entire sixth floor in the building. The lease the city signed has an option for the city to add space to the lease in the future if needed.

There is vacant office space on the first, second and sixth floors as well as the basement that could be immediately usable for the city staff to expand without renovation, Dingman said in the memo.

A complete remodel of all spaces in 623 Garrison would provide for the needs of all departments in the building for many (many) years, but is estimated to cost $14.6 million. That scale of a remodel is not now being discussed.

However, Dingman’s memo does recommend that the city should consider conversion of all the first floor space into the city’s public-facing customer service areas to better serve the public sooner rather than later.

“In addition to water services and customer billing, several departments get regular visits from the public for items such as development review, plan review, building permits, business licenses, job applications and general inquiries. We have contemplated a public service area that could accommodate all of these needs,” the memo states. “This renovation of the first floor only could also be accommodated in the lease arrangement with the CBID if suitable terms could be agreed upon, or it could be done separately by the city with appropriated funds and not affect the lease at all.”