Little Rock officials are again focusing plans for a northwest police substation in the unfinished Pankey Community Center, despite failed negotiations last year with the nonprofit group that owns the boarded-up building.
The Little Rock Board of Directors will discuss a proposed contract at its meeting today to lease space at the center at 13700 Cantrell Road and to spend up to $1million to finish construction of the building and install a fueling station for police cars. The city has been looking for property to build a substation in northwest Little Rock for several years because of a western shift in property and commercial crimes that has followed a shift in the city’s population.
“I think this is a win-win situation for both parties involved,” said Mayor Mark Stodola. “The location enables us to have a police presence that farther west, one that is west of the traffic issues at the Interstate 430 interchange, which should decrease response times and provide a lot of benefit. It also helps the Pankey community finish the center, which they have not had the funding to do for more than a decade, since construction was halted. I think a lot of the issues were ironed out and addressed in this version of the contract.”
Stodola and other city officials said Monday that the city is reconsidering the community center because a search for other properties has not yielded a location with enough space for the fueling station and other needs, and that also allows the department to stretch the $1 million in earmarked sales tax revenue as far as it needs to.
Little Rock Police Chief Stuart Thomas said he and other city staff members had searched for buildings farther west, but most of those fell short of what the department needed.
“It became apparent in that search that it would be difficult to fit a long-range plan into that fast-developing area with the amount of money we had available,” he said. “The cost of any type of purchase of land and construction was way beyond what we had allocated. And, given the floor space and size we were looking for, there weren’t many options that wouldn’t exhaust the lease payments … in 20 years or less. One option we were looking at was fantastic, but it would have exhausted our funding in six or seven years.”
When the contract with the Pankey association was originally proposed in December 2012, several city directors, staff members and residents raised questions about details in the rental agreement and about doing business with an organization - the Pankey Community Improvement Association - that was at the center of an Arkansas Legislative Audit Division investigation over financial mistakes that have kept the building boarded up and unfinished for more than a decade.
The revised contract, up for a vote on Nov. 19, resolves several issues raised last year but still requires the city to complete construction of the building, which it would not own. It also would require the city to buy insurance on the entire building and to pay for major repairs over the life of the lease.
“Some of the questions I have about the whole thing are the same questions I had last year,” said At-large City Director Joan Adcock. “I owned a business for a very long time. And for 14 of those years, I rented a space and I never had to pay all the insurance on the structure. There are just some things I don’t understand, like why would we negotiate to pay for all of the major repairs? We’re talking about 25 years of building maintenance.”
“I want to make sure we are entering into a contract that is the best deal for the city,” she added.
Adcock said she also wanted to know whether the city was negotiating with an approved representative from the community because of a history of infighting in the small community along Cantrell Road. She also asked whether the city had performed due diligence such as checking if the cash strapped organization owed property taxes on the unfinished structure.
The city does not have the option to buy the property because it was deeded by the Little Rock School District to the community association with the agreement that the group would build a community center that focused on providing tutoring and other educational opportunities as one of its functions. The deed includes a clause stating that if the center is not used for educational purposes, its ownership will revert back to the school district.
“Does the city using more than half of the building for a police station fit into that deed?” Adcock asked. “Should there be a third party [like the school district] involved in the negotiations?”
Despite some lingering questions, the new contract does resolve some issues, including whether the price per square foot was a monthly or annual rate - a debate that carried a more than $100,000annual difference in price.
Under the new contract, the price per square foot has increased from $10 in the previous discussion to $13. The price would increase to $13.50 per square foot after five years.
However, this version of the contract stipulates that the city will not pay rent on the facility until the $1 million in construction funding is recouped. The city can also deduct the estimated $500 a month in utilities it would pay.
Under those conditions, Thomas estimated that the city wouldn’t start paying rent until 23 years into the lease agreement.
“That’s making some assumptions in terms of the actual floor space and utility costs,” he said.
The size of the rented space has also increased, from 1,100 square feet in the previous agreement to about 3,815 square feet in the new agreement, meaning the city would rent more than half the building. Under the proposed contract, the center would use about 2,600 square feet. The contract does not include details of what the community association plans to do with its side of the facility.
The center has been unfinished since 2002, when the Arkansas Legislative Audit Division investigated the bid process and the association’s financial record-keeping.
Work on the building stopped 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 Division 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 found that the group had kept poor records of how it spent $478,821 in 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 file 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.
Front Section, Pages 1 on 11/12/2013