LR police substation on hold

Directors’ concerns knock Pankey deal off board agenda

City officials are considering a partnership that would place a police substation at what is now the unused Pankey Community Center in west Little Rock on Cantrell Road.
City officials are considering a partnership that would place a police substation at what is now the unused Pankey Community Center in west Little Rock on Cantrell Road.

— Little Rock City Manager Bruce Moore removed an agreement to build a northwest substation for the police department from tonight’s Board of Directors’ agenda after several questions were raised over proposed lease terms.

Under the memorandum of understanding presented to the Board of Directors last week, the city would pay about $1 million to finish construction of the unfinished Pankey Community Center, then rent out a small portion of the facility and build a fueling station for the northwest police patrol division.

The city would pay the taxes, utilities and maintenance costs for the entire building under that version of the agreement, which was scheduled for a vote tonight.

Several city directors, police department staff members and other city officials have raised questions about the agreement for the building at 13700 Cantrell Road.

The center, owned by the Pankey Community Improvement Association Inc., has been unfinished since 2002, when Arkansas Legislative Audit investigated the bid process and the association’s financial record-keeping.

On Monday, Moore said that the resolution to enter into a lease was pulled from consideration because the city needed to clear up some details and continue negotiations.

“At the conclusion of the sales tax [campaign], we began actively searching for property to use as a substation in that part of the city,” he said. “The association has exhausted all of their options and made numerous efforts to finish the building, and we decided this might be a way to satisfy both of those needs - the desire for a community center and creating a public-safety presence in that corridor.”

The police department has seen a shift in property and commercial crimes as the population of the city has shifted westward, said police spokesman Sgt. Cassandra Davis.

“Instead of those patrol officers having to come all the way back to downtown to refuel, they’ll be able to go out there and stay out there until their patrol is over,” she said. “It will give them a location where they can do paperwork or use the computers if they need to finish something up and just use it as a home base.”

Several city directors said they agree with the need for a substation in that area, and they like the possible location, but they had questions about the terms of the agreement and the owners of the property.

“I have a lot of questions about this, particularly with how we will share the space and what exactly we will do with $1 million in construction costs,” said At-Large Director Joan Adcock. “Could we have not bought another building that would be less than this or rented in another building without having to pay for that construction? I would like to know why we made this decision and that it is the best decision.”

Moore said the city did not use eminent domain or demolish the unfinished structure because city and board policy reserves those options as a last resort if a property becomes an eyesore or a dangerous structure. He said the building is structurally in pretty good shape.

Calls to several people listed as members of the improvement association were not returned last week or Monday.

A search of nonprofit tax records through the Internal Revenue Service showed that the improvement association has not filed a 990 tax form in more than three years, which triggers the IRS to revoke an agency’s nonprofit tax exemption status.

There were three other Pankey-related agencies listed, two of which - the Pankey Community Development Corporation and the Josephine Pankey Educational Center - had also lost their exempt status for failure to file the tax forms.

A fourth organization, the Friends of Josephine Pankey, listed as a “single organization support,” was in good standing at the IRS, but had not filed a 990 form for 2011 or 2012.

The 990 lists all donors, donations and expenditures as well as information about the organization’s officers, employees, salaries and mission.

The association was listed in good standing at the Arkansas Secretary of State’s business office, meaning the members have paid the association’s franchise fees.

Work on the building stopped in 2002 when the association ran out of money to pay the contractor that had finished most of the outside structure but did little work inside the building.

The Legislative Audit determined in its findings that the group may have violated Arkansas bidding and procurement laws by bidding out the project at a price that was more than they were going to receive from a state grant and not having the funds in the group’s bank account to cover the remainder of the cost.

The audit also said that the group had kept poor records of how it spent $478,821 of the construction money. Audit staff members suggested the association would need between $220,000 and $547,000 to finish the center, depending on which construction estimate was used.

Pulaski County Prosecuting Attorney Larry Jegley’s office declined to seek charges against the association. An Attorney General’s opinion said the organization was not subject to the state’s procurement laws. Attorney General’s opinions are nonbinding.

Moore said city staff members have kept an eye on the building and have tried through the years to help the association find a way to finish the community center.

“It’s a project we had followed through the process, and we’ve had numerous conversations with them and the community about what could be done to help finish the center, and this seemed like a mutually beneficial answer,” he said.

“Obviously the association would have to pay for furnishings and other elements for the community center and their side of the building.”

Under the agreement presented last week, the city would pay $10 per square foot for the first five years of the lease, and then $10.50 per square foot for the remainder of the proposed 25-year lease.

The agreement does not say whether that rate would be $10 per foot per year or $10 per foot per month, which would be a large price difference.

“Ten dollars per square foot per year would be a pretty good deal, but $10 per foot per month would be a problem,” said At-Large City Director Gene Fortson. “The way commercial real estate works normally, I would guess that would be per year, but that’s something we need to clear up before we move forward.

“There were a couple of other things in the memorandum that I asked for clarification on as well. I think it’s a needed project and a great location, but it’s good that we’re taking some more time and making sure we have all of this clearly defined.”

According to Mike South, a commercial real estate agent with Flake & Kelley Commercial, the average price for office space in west Little Rock ranges from $16 per square foot per year on the high end to about $10 per square foot per year on the low end. He said most Little Rock agents deal with contracts on an annual basis and then divide that listing price into 12 monthly payments.

If the lease terms are defined as $10 per square foot per year, South said that would fall within the lower spectrum of prices for office space in the area.

Moore said the exact amount of space the city would use inside the building has not been determined, but he estimated it would be about 1,500 square feet out of the 6,000 square-foot building.

Details of how the association plans to use the remainder of the space beyond calling it a community and events center were not included in the contract.

Little Rock Police Capt. Patrice Smith also included mention of the facility in a lawsuit she filed against the city, police department and its chief, Stuart Thomas, on Friday.

The lawsuit largely deals with claims that the police chief retaliated against her after she raised concerns about the department’s promotion process. However, she mentions briefly in the lawsuit that she told her superiors that the Pankey agreement, which she had a role in negotiating, was “not a good deal” for the city.

Arkansas, Pages 9 on 12/04/2012

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