The difference between two appraisals on a piece of prime Main Street real estate wanted for the Little Rock Technology Park is $175,000.
A recent appraisal done for the tech park by Jack Larrison of Larrison & Co. puts the property's value at $670,000, or roughly $67 a square foot. The owner of the three-story building at 415 Main St., lawyer and former Supreme Court Justice Richard Mays Sr., obtained his own appraisal, which came in $845,000, or about $84 per square foot.
Ferstl Valuation Services provided Mays' appraisal of the 10,020-square-foot building. The difference in price per square foot between the two assessments is about $17 per square foot.
The Little Rock Technology Park Authority Board is expected to discuss the property at a special meeting at 4 p.m. Monday in either the tech park's temporary space in the Block 2 building at 107 E. Markham St. or the offices of the Little Rock Regional Chamber of Commerce.
Tech park board member Dickson Flake, a commercial real estate broker who has been negotiating with Mays and others for property needed for the park, said Friday it is uncommon for appraisals to be so far apart under normal circumstances.
However, with so much property changing hands and increased development downtown, the environment has changed, he said.
"A year and a half or two years ago, the downtown was a static market, but it's much more dynamic right now," Flake said. "Sometimes you get those spreads in a dynamic market.
"It gets down to judgment, and in a dynamic market, the information [appraisers] rely upon can be interpreted in different ways."
For questions specific to the purchase of the Mays building, Flake deferred to board chairman Mary Good. She did not return a call to her office on Friday.
Real estate appraiser Richard Stephens of Richard A. Stephens & Associates Inc., said the spread was not uncommon for commercial property.
"It depends on how each person treated the 'highest and best use,'" Stephens said. It's the basis for appraisals, he said.
Duncan & Brown Real Estate Analysts of Eugene, Ore., define "highest and best use" as "the reasonable, probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value."
Mays' building is the last to be negotiated in a larger property acquisition for the first phase of work on the $100 million tech park. When complete, the technology hub will take up an area in and adjacent to a city block between Main and Scott streets off Capitol Avenue.
The tech park board has already struck a deal with Warren Stephens -- chairman, president and CEO of Stephens Inc. -- to buy Five Main Place (also known as the Exchange Bank building) at 423 Main St., the annex at 417 Main St. and the old Stephens Building at 114 E. Capitol, plus three parking lots in the area for $11.6 million.
Those properties make up the majority of the tech park's land needs. The tech park could close on those properties as early as Jan. 15, tech park director Brent Birch has said.
Cost to complete the first phase -- which also includes professional services and renovation -- is expected to be $17.5 million.
The board voted at its October meeting to have lawyer Scott Schallhorn draw up a condemnation lawsuit against Mays if he and the board cannot reach an agreement on price. The board pays Schallhorn $295 per hour for his services.
Going to court could mean a delay on the first phase of the park. Mays has said he doesn't believe the potential legal issues could be resolved at the circuit court level.
The Exchange Bank building, the most valuable of the properties, is to be sold to the tech park for $8.5 million. At roughly 45,500 square feet, the price per square foot comes to about $187. Both the annex and the old Stephens building are vacant; the old Stephens building is scheduled for demolition.
Tech Park board member Jay Chesshir, president and CEO of the Little Rock Regional Chamber of Commerce, said he was not surprised by the value of Mays' appraisal.
"The reality is appraisers use different methodologies in determining value of property, and because of the activity within the area it's certainly understandable why there would be a difference in appraisers' opinions," Chesshir said.
He was hopeful that information from the appraisals would help the board come to a successful negotiation with Mays.
Kevin Zaffaroni, another tech park board member, said Friday his approach to the matter has remained the same.
"You have to balance the needs of all the different constituencies here, and do it in the fairest manner possible," he said.
Mays said earlier in the week that another potential buyer has entered the picture. The prospective buyer is from out of state and would "associate with a local educational institution that is local," Mays said Wednesday. The business focuses on minority outreach, he said.
Business on 10/31/2015