A downtown Little Rock landmark, the 1940s building that housed a longtime location of the now defunct MM Cohn Co. specialty department stores, is for sale along with two neighboring properties.
The five-story former MM Cohn store at 510 Main St. is owned by a group of investors doing business as Main Street Lofts LLC and is listed for nearly $3.8 million. The other two buildings -- the three-story Davidson Building, also known as the Fabric Center Building, and the five-story Hall Building, both in the 200 block of West Capitol Avenue -- are owned by Capitol Lofts LLC, according to Pulaski County assessor records.
The Davidson Building has a $2.3 million asking price; the Hall Building is listed for $895,000, said Hank Kelley, partner of the Flake and Kelley Commercial real estate firm. The buildings are in and around what's been dubbed Little Rock's "Creative Corridor" -- the 300-600 blocks of Main Street, housing an array of arts- and entertainment-related businesses and creative enterprises.
The properties are also steps away from what will eventually become the Little Rock Technology Park on Main Street.
Reed Realty Advisors LLC, headed by developer Scott Reed of Portland, Ore., manages the properties. The buildings' owners/investors vary from project to project, said Josh Blevins, head of Reed's Arkansas operation and national acquisitions. Reed is a large shareholder in the three buildings for sale and several others that Reed Realty is overseeing as they are in different stages of redevelopment downtown.
The owners' decision to sell the buildings comes months after the Arkansas Legislature changed an earlier amendment regarding the number of tax credits for historic rehabilitation projects that developers could use on a single property.
Act 567 of 2015 limits Arkansas Historic Rehabilitation Income Tax Credits to one allocation of up to $125,000 per eligible property in a two-year period, rather than multiple credits issued for one income-producing property, which had been the practice. Reed and his partners were relying on tax credits to be issued for varying phases of work on a project.
No credits could be used on the purchase price of the buildings.
Blevins said Friday that he understands the move to limit the tax credits, but it came at an unexpected time and with consequences for the projects' owners.
"Our only issue was that the rules changed after we started redeveloping these buildings," he said. "We just simply would have had to pass up these projects had the [previous] tax-credit program not been in place here in Arkansas."
Blevins said Reed Realty has done all the demolition and abatement work inside MM Cohn.
"The building is environmentally clean. It is a super strong building structurally, and we were excited about developing it," Blevins said. The Arkansas Symphony Orchestra is expected to lease half of the first floor. The other half of the floor was planned to be a high-end restaurant, he said. A busted fire hydrant in front of the building, but not on the property, caused some water damage inside, thus delaying construction.
The developers had planned to create 34 apartments on the upper four stories.
"Those were slated to be our nicest units of all of our downtown development," Blevins said.
Kelley, the listing broker, said tax credits for historic projects are still available for the properties, "they're just different than they were before" in terms of allocation.
"The current owners would like to see if there's someone who would like to take this project on and move it to the next level," Kelley said.
He and colleague Bill Pendergist listed the buildings Wednesday, and interest from potential buyers for the MM Cohn Building has been "brisk," Kelley said. They're already scheduling showings.
The ideal user is likely one "who will want to have their signature on a building like this" in the Creative Corridor, Kelley said. Their marketing strategy will target developers and businesses in and out of the state, he added.
"There is a healthy audience that at least wants to look and understand the building," he said of MM Cohn. "We'll be busy next week showing it to more than one party," he said.
The Hall and Davidson buildings are connected internally and were planned to include 56 apartments between the two buildings.
At one point, Reed Realty owned all the buildings on the west side of the 500 block of Main Street, including MM Cohn, the Pfeifer Brothers Department Store at 524 Main St. and the Pfeifer Brothers Department Store Annex at 514 Main St., which is being developed as Main Street Lofts.
In the same block, the partners owned the Boyle Building at 501 Main St., which they sold to the Chi Hotel Group of Little Rock early last year. The local Chi family owns several restaurants and hotels in the area are developing a 12-story Aloft Hotel.
Reed's group is nearing completion of the K Lofts project, a five-story apartment building at 315 Main St. For at least the past six months, the owners have said they are waiting on appliances to be ready, but Blevins said Friday that here's another holdup. He would not elaborate.
"There are just some issues related to the building. Appliances aren't the only thing that's lacking," Blevins said.
So, of the seven properties Reed and his various investors bought and planned to redevelop, their strategy now involves just three.
If the tax-credit situation were to change, then the group would consider taking the MM Cohn, Hall and Davidson buildings off the market.
A Section on 07/11/2015