Another prime property at the state's largest airport is going empty.
But officials at Bill and Hillary Clinton National Airport/Adams Field say they believe the building that began as a reservation center for Southwest Airlines 20 years ago will generate far more interest than another large vacant property, the former Hawker Beechcraft complex that has been available for almost a year.
And the airport won't be out much money in the short term. Southwest has been paying for only the land on which the building sits, or about $78,000 a year, according to Clinton National officials.
Arkansas Blue Cross and Blue Shield, which has been leasing the property from Southwest since 2005 to use as a call center, will pay the airport $37,000 a month for three additional months under a new agreement and then vacate, according to a Little Rock Municipal Airport Commission committee recommendation Wednesday.
By contrast, the airport is losing more than $1 million annually in lost lease income and utility payments at the Hawker Beechcraft complex. Hawker Beechcraft, the aircraft-maker, vacated the sprawling complex for business jet finishing and painting as part of its exit from bankruptcy last year.
Another aircraft-maker with completion facilities at Clinton National, Dassault Falcon, uses part of the Hawker Beechcraft hangar space to park its business jets, for which it pays the airport.
How much of the utilities and maintenance on the building would be shouldered by the airport once Blue Cross vacated the Southwest property was unavailable Wednesday, but Bryan Malinowski, the airport's deputy executive director, said the roughly "$110,000" the airport would receive from the insurer was a "good head start" on recovering those costs.
Southwest broke ground on the $10 million, 43,000-square-foot building on more than 14 acres on the east side of the airport at Kellett Road and Fourche Dam Pike in September 1994. At the time, it was the airline's eighth and largest reservation center, projected to eventually employ 900 people with a $15 million annual payroll.
But the airline closed it and other reservation centers in 2004, citing an increase in airline tickets purchased online. Southwest offered job transfers to all of the 700 people employed at the Little Rock call center at the time. About 300 transferred to other call centers, while about 400 left the company, according to news reports.
The airline signed a 20-year lease with the airport. That lease expires Dec. 31. The agreement also contained two 10-year options to renew, which the airline declined to pursue.
Less than a year after the reservation center closed, the commission approved an arrangement allowing Southwest to lease the building to Arkansas Blue Cross and Blue Shield. The insurer was forecast to employ 500 full-time and 200 part-time employees under a contract it had with the Centers for Medicare and Medicaid Services, a division of the U.S. Department of Health and Human Services.
Under Medicare, the federal insurance program for the elderly and the disabled, recipients may call a toll-free hotline for service help. The call-center employees are supposed to respond to those inquiries.
But Blue Cross notified Southwest that it would be relocating its operation and consolidating it with other offices, according to airport staff. After Southwest told the airport it would not execute a renewal option, Blue Cross officials contacted the airport and asked to remain in the building for an additional three months beginning Jan. 1 "while build-out of the space they are relocating to is completed," according to an airport memo.
Under the terms, Blue Cross would pay $37,051 per month for three months. The amount is identical to what Blue Cross was paying Southwest, said Tom Clarke, the airport's properties, planning and development director. The arrangement still must be approved by the full airport commission, which meets Tuesday.
The commission's lease committee held up a Clinton National staff proposal to have a commercial brokerage team of local and international firms it retained to market the Hawker Beechcraft facility also market the former Southwest building and a smaller vacant property.
Committee members asked that representatives of the team -- which include the Sage Partners, a local firm, and Jones Lange LaSalle, which has 200 offices around the world -- go before the commission at its regular meeting Tuesday to brief members about how it might market the old reservation center and what its efforts have yielded on the Hawker Beechcraft property.
Jim Dailey, a commission member, said he would like to see the old reservation center marketed quickly.
"This is a great property with tremendous potential," he said. "But we're going to have to be sure to get this out to the market."
Metro on 11/13/2014