The Little Rock Technology Authority board on Wednesday passed a resolution to formally authorize a $17.1 million loan to fund phase one of the downtown tech village with a local bank consortium that will lower the financing deal by $400,000.
With the last piece of the financing arrangement in hand, the authority now says it expects to finally close by Friday on the downtown tech park village that has been nearly eight years in the making.
“Sounds like we should be able to close on Friday without any problems – we hope,” Tech Park Chair Mary Good said during the hastily-called, 10-minute conference call on Wednesday.
Nearly a month ago, the board unanimously approved a $17.5 million consortium-backed financing package to fund the project and later OK’ed a resolution to approve the purchase price for three separate real estate deals that will make up the bulk of the land and office space for project.
However, board member Dickson Flake said the authority and the banking consortium led by Conway-based Centennial Bank agreed that the loan should be reduced to an amount not to exceed the $17.1 million. Flake said the nature of the project, which hopes to market to attract startups, entrepreneurs and establish a tech focus to the city’s Creative Corridor, means the authority will attract tenants seeking below-market rent.
“I am glad that (the loan) is not any lower,” Flake said. “I was concerned from the beginning because the whole reason we exist is because we are not going to get market rent from many of our tenants.”
In early August, the authority approved a resolution to negotiate with a consortium of local banks in response to the request for proposals. Led by Centennial, the banking group also includes Simmons First National, Bear State Bank, Arvest Bank, and First Security Bank. However, the group later excluded Arkansas Federal Credit Union from the consortium in a dispute could possible end up in court at a later date.
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 of 4.19% and 2.95% over six years. Now, the newly-arranged $17.1 million loan will consist of two promissory notes with the original tax-exempt principal not to exceed at $9.6 million.
Brent Birch, executive director of the Tech Park, said a few legal matters still need to be resolved ahead of Friday’s expected close.
“We have a few checklist items between attorneys, but they will happen up until the close of the deal,” he said.
At the January meeting, Birch told the board he expects construction on the first phase of the project that will include 40,000 square feet of startup and office and co-working space at 417 S. Main St., is expected to be completed by November or December. At that time the authority can begin the process of selecting and finding tenants to lease space in the tech village. Already, Birch said, he has received a handful of legitimate inquiries from established IT companies in the area interested in space and rates since the architectural renderings were made public at the Dec. 9 board meeting.
Once in operation, the key pieces of the development will be the three adjacent properties owned by the 415 Main Group LLC, Five Main LLC and DMT Ventures LLC.
The 415 Main partnership is led by Little Rock Attorney Richard Mays, who accepted a $1.03 million offer from the tech park board in late November to purchase his centrally-located downtown law offices. The deal came together only after Mays threatened to fight back against an eminent domain taking.
The other two buildings, at 417 and 421 Main Street, are owned by a Warren Stephens-led limited liability partnerships that will eventually connect to the Mays building. The tech park board had earlier agreed to a purchase price of $11.6 million for those properties.
In December, Birch told the board that he and Wittenberg Delony architects still have to make sure the design plans meet the authority’s budget before completing a final draft. If all goes as planned construction on the project will begin in early March, he said.
There is no timetable for the second phase of the downtown development, which will include a state-of-the-art wet and dry labs and an additional 160,000 square feet of office space, Birch said. Plans for phases 3, 4 and 5 of the downtown project are expected to be mostly new construction that will include an 800-car parking deck, retail and restaurant space, and office accommodations for established tech companies.
Link here to view the plans and architectural renderings of the Little Rock Tech Park.