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Thursday, July 10, 2014

Little Rock Tech Park: Site selection leads to money questions

Posted By on Thu, Jul 10, 2014 at 9:39 AM

click to enlarge TECH CROSSROADS: Capitol and Main once was the commercial hub of Arkansas. Now, it's envisioned as the beginning of a tech park, with initial offices in the building on the corner. - GOOGLE STREET VIEW
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  • TECH CROSSROADS: Capitol and Main once was the commercial hub of Arkansas. Now, it's envisioned as the beginning of a tech park, with initial offices in the building on the corner.

Leslie Peacock covered in detail last night
 the Little Rock Tech Park Authority's approval of a consultant's recommendation for a site for what's envisioned as a new age job creator. The project dates back to a chamber of commerce initiative that began in 2005.

In the main, the idea is to take a city block bounded by Fourth, Capitol, Main and Scott and a half block on the west side of Main between Fourth and Capitol. "Fifth and Main" was once the crossroads of Arkansas, a thriving commercial hub. The idea would be to raze KATV buildings at Fourth and Main and the Mays law firm on Main to make way for new construction. A six-story building is also envisioned on a current parking lot on the north side of Fourth at Main. One of a cluster of buildings owned and once occupied by the Stephens Inc. investment firm — at Capitol (Fifth) and Main — would provide an initial home for Tech Park operations.

Now some of the pressing questions (and feel free to add your own):

1) Money?

2) Money?

3) Money?

What will the land cost to purchase? Vacant property is one thing. Occupied buildings, where occupants will have to relocate, are another. Might some owners, such as the Stephens financial empire, be willing to make a charitable contribution of its land on either side of Main, much of it acquired for a song?

What will demolition cost? Are there cost-added environmental issues in some of these old buildings?

What will be the cost of renovation of existing buildings converted to Tech Park offices?

What is the cost of new buildings and a parking deck along Scott? (The plah would be implemented in stages, not all at once.)

Revenue. Will city meet its $22 million commitment over 10 years? A sales tax increase, three years after its approval, is producing less than originally estimated. Does the Tech Park suffer a proportionate reduction if this trend continues? Or do other elements of city government take reductions to maintain the Tech Park commitment?

Will borrowing be required to get the project going? Does that mean a bond issue? What will be pledged to those bonds? Will a vote be required?

What are estimates of operating costs (utility, janitorial, technical infrastructure, staffing)? Who will pay them? What's the contingency if rent-paying tenants don't emerge to produce a sufficient revenue stream? Is it a city government obligation?

If some landowners are recalcitrant, will the Authority use eminent domain to seize the property? And what will that add to the cost in legal fees and time?

Will anybody besides city of Little Rock taxpayers front significant capital for this project? UAMS, UALR and Arkansas Children's Hospital made token $125,000 contributions. None of these institutions is rolling in dough. All have had to pare budgets. The cuts have been particularly painful at UAMS and UALR. The uncertainty of government support of health care leaves Children's with budgetary concerns, too.

Other successful research and tech parks have invariably been built on a bedrock of private capital. As yet, not a dollar has been offered here from private sources. Three years into the process, has anybody been out attempting to find a corporate angel? Or are taxpayers the only angels in this deal (the research institutions, remember, depend on taxpayer money, too)?

The meeting last night was not intended to answer these questions. And progress was made. But a focus on location now brings these questions to the fore. The city's tech dream castle will depend on the answers.

UPDATE: My first additional question from a reader:

My question is based on the olden days when each day's edition of the Gazette was packed with little two-graf articles from the State Desk: A daily flurry of Act 9 Bond issues. It got where every crossroads hamlet in Arkansas with a population of more than 50 passed an Act 9 Bond issue to acquire land for an "industrial park." The hope was to lure Yankee companies to the South with offers of free acreage. Admittedly, five or six companies did relocate in the '60s and '70s. It would be interesting to know how many of these companies made Arkansas a brief stopover in their eventual relocation in Mexico.

My point: If every little crappy backwater has a "tech park" does it make sense to add another "tech pork" to the overcrowded supply? Think casinos. Now that every state has casinos, is the pool of knothead gamblers so diluted that places like Tunica and Atlantic City have seen their economic miracles turn to dust? Are there any reliable statistics on just how many "tech start-ups" there are and how many of these things have actually produced any return on investments. I know NPR did a piece a while back on St. Louis' successful establishment of a downtown tech district. But St. Louis was promoting the use of vacant buildings, not building a campus.

AND ALSO:

Is a function of city government to build buildings for private enterprise and serve as a landlord of those buildings?

AND ALSO:

See comments. Does Little Rock want to destroy still more historic buildings in the name of, well, whatever? The reference is to KATV, which occupies the Art Deco building constructed for Worthen Bank in 1928, as well as subsequent additions and a parking deck.

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