The Little Rock Technology Park Authority agreed on Tuesday to make a $1,037,000 counter offer to attorney Richard Mays to purchase his firm’s downtown office Tuesday, opening the door for the publicly-financed authority to move forward with the first phase of a tech park to boost entrepreneurship.
The agreement came during a specially-called, emergency meeting held at the Little Rock Chamber of Commerce, where President and CEO Jay Chesshir and board member Dickson Flake played a major role in hammering out a possible deal with the local attorney. The meeting was barely called ahead of the two-hour advance notice provision for public meetings under the Arkansas Freedom of Information Act, which caught several reporters attending the meeting off guard ahead of the Thanksgiving Day holiday.
The tech park board offer, which was passed by a vote of 6-to-1, came with the stipulation that board member Dickson Flake will give Mays “a few days” to accept the offer. Also, the authority and Mays would have to drop dueling lawsuits that were filed by both parties over the past few days. The offer is a 22.7% premium over the authority’s earlier offer of $845,000 from Nov. 2.
“Mr. Mays and I have met many times over the past weeks and months, and he always been receptive when I have asked him to meet … with the latest being this afternoon,” Flake told the board. “I have concluded that we will not reach an agreement from our (earlier) offer of $845,000. That’s thoroughly been rejected.”
Flake continued: “However, he has indicated serious willingness to settle with us and negotiate, and I would like to recommend we be willing pay $1,037,00 for the property and I have some confidence that can be a number that is agreeable to his side of the family, if that is agreeable to this board.”
BOARD PROPOSAL FOLLOWS DAY-APART LAWSUITS BY MAYS, TECH PARK
Both Mays and the authority had filed dueling lawsuits on Friday (Nov. 20) and Monday, respectively, pitting the two parties against each other in what could have been at least a two-year legal tussle over the “public use” under the state’s tightly held eminent domain laws. Mays did not immediately return phone calls seeking comment for this story following the pre-Thanksgiving holiday meeting.
Before the board voted to approval the offer, several members expressed their views in a roundtable discussion concerning the offer to Mays that has held up the downtown development for several weeks now. Tech Park Vice Chair Kevin Zaffaroni, who voted against the counterproposal, said he was disappointed that Mays had not accepted the board’s earlier offer given the authority’s appraisal of the downtown property was only for $675,000.
“It seems to me that we are being abundantly fair in the offer provided. If these appraisals are valid, I can understand there being a range that’s pretty broad, but I just find it very, very hard to believe that you could have appraisals where there is one that is almost 50% of the other price,” Zaffaroni said. “What is the true value of this property? To me, it just seems like we offered a true value and I would suggest that we think about the fact do we even need the (Mays) property.”
Board member Tom Butler shared similar views as Zaffaroni, saying that he had already raised the proposition at earlier meetings to “work around” the controversial downtown law office on Main Street. However, he said he had a recent conversation with an unnamed Texas architect who convinced him that the price in the $1 million range for Mays property was reasonable, given the possibility of a long legal battle between the local attorney and the publicly-financed authority.
“I feel this price is within what (the architect) said, and he has done a number of major acquisitions down there for a major hospital in the Houston area, similar circumstance,” Butler said. But, Zaffaroni quickly asked Butler, “At what price Tom, at what price?”
Board member Darrin Williams and C.J. Duvall said they did not want to engage in a long legal battle with Mays. Both agreed the publicly-financed authority should be careful about using taxpayer’s funds to file a lawsuit against a local citizen. “It is clear to me that both sides have legitimate reasons to disagree, but this project is really important,” he said. “Richard Mays is our neighbor …, and I think if we continue to battle this out and move forward with our lawsuit versus their lawsuit, we are going to end up spending enough money to reach $1,037,000.”
Williams, who voted against filing a lawsuit against Mays, also raised the possibility that the authority could lease the property to the Little Rock attorney, but Tech Park Chair Mary Good and Dickson quickly shot down that option.
In the end, the board took only 20 minutes to approved the counter offer, but the former Arkansas lawmaker and deputy attorney general kept to his stance that he is not convinced that the authority could actually win its lawsuit to condemn Mays’ property through the Arkansas property owner-friendly eminent domain rules.
In his filing on Friday, Mays complaint argued that the seven-person, taxpayer-financed board had violated the Arkansas Constitution by “an improper delegation of the power of eminent domain from the State of Arkansas to the City of Little Rock and the Authority.”
In the tech park’s counter complaint on Monday afternoon against Mays, 415 Main Group LLC and other entities associated with the Little Rock attorney, the Tech Park makes the case that under Arkansas’ eminent domain laws it is empowered by the state to ““acquire lands and hold title to the lands acquired in its own name.”
Tuesday’s offer to Mays, if accepted, will allow the tech park board to move forward with the second of two major stumbling blocks that prevented the authority from closing an $11.6 million deal with two real estate partnerships affiliated with Stephens Inc. CEO Warren Stephens for nearly 142,500 square feet of building space, or 3.25 acres, in the downtown area.
Mays property sat right in the middle of the parcels of buildings, storefronts and parking lots that will serve as the city’s proposed tech park to lure tech companies and startup entrepreneurs to Little Rock’s downtown Creative Corridor.
A week ago, the tech park board approved a measure by a vote of 5-1 to accept a letter of commitment from a local bank consortium to finance the first phase of the project through a $17.5 million loan over a 72-month term. Under the terms of the proposed deal, the financial consortium would provide necessary funding in two parts to begin Phase 1 of the downtown project at fixed interest rates 4.19% and 2.95% over a period of six years. The $17.5 million loan will consist of two promissory notes, one taxable in the amount of $7.9 million and the other tax-exempt at $9.6 million.
Brent Birch, executive director and the lone employee of the authority, said after the meeting that the tech park will now be able to move forward without any remaining legal hurdles. He said the authority has also signed agreements for a construction manager and architect to lead and design the downtown development.
Birch added that the tech park has until mid-January of next year to close its deal with Five Main LLC and DMT Ventures LLC, the two Warren Stephens-led limited liability partnerships that will make up the lion’s share of the downtown development.