The Little Rock Technology Park Authority Board approved a loan commitment with a group of banks Monday that will help pay for the first phase of land acquisition and construction of the $100 million downtown technology park.
Under the terms of the six-year loan, the board is borrowing $17.5 million at a rate of 4.19 percent for the taxable amount of the loan and 2.95 percent for the portion of the loan that is tax-exempt.
It's been determined that $7.9 million of the loan is taxable, and $9.6 million is tax-exempt because part of the property being acquired is leased to the Arkansas Department of Education and the state Department of Higher Education through the Arkansas Building Authority.
The lease conveys with the property, most of which is being bought from limited liability companies owned by financier Warren Stephens. Tech park Executive Director Brent Birch said a new lease with new terms will be negotiated once the property's sale closes, which is expected to be in January.
The technology park is to be built in and adjacent to a city block between Main and Scott streets off Capitol Avenue.
The bank consortium consists of lead lender Centennial Bank plus Arvest Bank, Bear State Bank, Eagle Bank and Trust Co., First Arkansas Bank & Trust, First Security Bank, Malvern National Bank, Relyance Bank and Simmons Bank. Birch's father, Bob Birch, is regional president at Centennial Bank.
Arvest is the biggest bank in the state in terms of assets at the end of the second quarter of this year. Centennial Bank is third, Simmons Bank is fourth, First Security is fifth and Bear State Bank is sixth. First Arkansas Bank & Trust is ranked 15th, Relyance Bank is 17th, Malvern National Bank is 19th, and Eagle Bank and Trust Co. is 30th.
The document approved by the board Monday did not divulge the loan amounts from each lender.
Tech park board member CJ Duvall cast the sole vote against approval of the bank agreement. He questioned why the tech park's sponsors -- the University of Arkansas at Little Rock, the University of Arkansas for Medical Sciences and the city of Little Rock -- hadn't seen it first.
"Would it not be important to pass this by the city manager, the mayor and the city's lawyer?" Duvall asked.
"The citizens of Little Rock are big stakeholders here -- and of course that's not to say that UALR and UAMS are not -- but the citizens tend to be more vocal about what we do," Duvall said. "If that question should arise, about whether we shared this with the city manager as a courtesy, I feel pretty uncomfortable that we had not."
The $17.5 million loan covers most but not all of the cost for the first phase, which is estimated at $24.5 million. The rest will be made up with about $6.6 million from the tech park's allocation of Little Rock's 2011 voter-approved sales tax. About $22 million from the tax is set to accrue yearly through 2022.
Board Treasurer Dickson Flake said -- and Chairman Mary Good agreed -- that neither the city nor any of the other sponsors have liability for the loan. It was agreed that the banks' letter of commitment would be shared with the sponsors after the board's vote.
Monday was also the deadline for lawyer Richard Mays Sr. to accept, reject or counter the tech park's offer on his three-story building at 415 Main St., the last piece of property the tech park needs for the first phase. The tech park board offered Mays $845,000 for the 10,020-square-foot building two weeks ago.
"Mr. Mays didn't accept or counter our offer but did request an extension until Friday, which the authority has honored," Birch said about 1:30 p.m. Monday. However, he provided no information about how the board came to its decision to honor Mays' request without a public meeting.
"We extended the time for negotiations to the end of the week," Mays said about 2 p.m. Monday. Good added the Mays deal to the board's agenda an hour later.
The board plans to sue Mays in Pulaski County circuit court if the parties cannot agree on a price. A condemnation lawsuit has been prepared by the board's attorneys at Mitchell Williams. Filing of the suit was postponed.
Business on 11/17/2015