Donaghey Building sold for apartment development | Arkansas Blog

Wednesday, November 8, 2017

Donaghey Building sold for apartment development

Posted By on Wed, Nov 8, 2017 at 2:38 PM

DONAGHEY BUILDING: at 7th and Main, the city's first skyscraper, to get new life.
  • DONAGHEY BUILDING: at 7th and Main, the city's first skyscraper, to get new life.

The historic Donaghey Building at 7th and Main has been sold for apartment development in a deal that has been cooking for years.

Colliers International,
broker for the buyer, announced the sale of the vacant 170,957-square-foot building to LRMU, a Virginia limited partnership, for $5.7 million.

The Lake Hamilton Corporation, headed by Charles Hendrix of Hot Springs, bought the building from the Donaghey Foundation in 2001 for $599,000. One earlier redevelopment plan fell through. It has had a few tenants since, but has been vacant in recent years.

Zoning approval for the project was before the City Board more than a year ago.

Plans announced today mirror those announced then. The 92-year-old building would be converted into 152 studio, one-bedroom and two-bedroom apartments ranging from 539 to 1,093 square feet. Office and retail is expected on the ground floor. The project calls for removal of a skywalk connecting the building to the Donaghey Building North across E. 7th. But tenants are expected to use the city parking deck across the street. The existing skywalk connection passes through state Department of Human Services space.

The news release said construction is expected to begin in the 2nd quarter of 2018 with completion in November 2019.

From the release:

“Restoring the Donaghey Building back to its former glory has been our goal all along,” David Roos, Principal at LRMU, LP, said. “We feel that the combined location, history, and downtown atmosphere will make this building a treasure once again for Little Rock’s current and future residents.”

Once complete, the Donaghey Building will feature amenities such as a fitness center, a laundry room, meeting rooms and outdoor patio with a lawn. Parking for the building will be provided in the parking garage at the corner of East 7th and Scott Streets.
When first announced, LRMU was said to be financed by five investors and a project of All Funds, an EB-5 investment group. This is a federal program that can provide a green card, or permanent U.S. residency, to foreign investors in return for investments of $500,000 or more in a commercial project that creates jobs. The investment group estimated 90 jobs for this project. Here's some background on the sometimes controversial program, which has been used by the family businesses of Jared Kushner, Donald Trump's son-in-law. Reauthorizing the program was one of the early initiatives of the Trump administration.

Earlier in the year, there'd been questions about the continuation of the EB-5 program. But Donald Trump approved the renewal. Most visas issued under the program have gone to Chinese investors.

The $21 million project also once anticipated use of historic tax credits. That program is not continued in the current proposed tax legislation, though as I noted earlier today, many are fighting to keep it alive.

The project would fill one gaping hole on the redeveloping Main Street corridor. The Boyle Building at Capitol (5th) and Main remains a question mark long after it was bought by a local family with development plans that have included a hotel.

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