North Little Rock to pick up $80,000 tab for Sprint to disconnect cable

Mayor Joe Smith said Monday that paying the entire cost to disconnect underground fiber-optic lines that cross both city and private property downtown would provide North Little Rock a "collateral benefit" to the private property's owners, something he added isn't unusual when the city makes improvements.

According to a resolution passed by the City Council on Monday night, North Little Rock is to pick up the estimated $80,000 cost to pay Sprint Corp. to abandon fiber-optic cable beneath properties between Fourth and Seventh streets and Poplar and Magnolia streets, where the former Prime Quality Feeds mill was located for many years.

Smith told the council that the negotiations with the telecommunications company for the removal had started at about $250,000. Negotiations have reduced that to around $74,000, Chief of Staff Danny Bradley told the Council. The $80,000 figure in the legislation was to provide some cushion, Bradley said.

The City Council approved the city's proposal 6-1. Alderman Debi Ross voted no. Alderman Maurice Taylor was absent.

"Why us?" Alderman Charlie Hight asked at the start of the discussion, seeking explanation from the mayor why the city wasn't splitting some of the cost with The Mill LLC, which owns the private portion of the property. The Mill is headed by Harold Tenenbaum and Jack Grundfest, Smith said.

"They [Sprint] are abandoning the easement and fiber that is underground," Smith said. "They will not be doing anything on Tenenbaum's property. They will just leave it and walk away."

The Mill owners will get a "collateral benefit," Smith said. "But most everything we do has some collateral benefit to someone."

As an example, Smith said that the city's repaving of North Hills Boulevard "probably raised the price of the homes along North Hills by $500 each."

Alderman Beth White asked City Attorney Jason Carter to explain how this situation is different than other instances when private property owners had to pay for improving their property without the city's help. Because no actual work will be done on the private property -- the cable lines will be disconnected, not physically removed -- this is a different kind of situation, Carter said.

"We're not paying for a guy going onto someone's property and do work, which we can't do," Carter said. "That easement has to be abandoned for our own easement to be abandoned."

Bradley said last week that the fiber optics were relocated in 2005 from near Verizon Arena in connection with the removal of a railroad berm. The city paid $158,779 for the relocation that also was to accommodate the conversion of the Junction Bridge by Pulaski County into a walkway and bicycle path that crosses the Arkansas River.

Ross asked if The Mill owners had been asked to share in the cost of the current proposal. Smith replied that city officials "talked to them about it" but that it's much harder to involve separate parties in a negotiation of that size. Ultimately, he added, it was to the city's benefit to handle the negotiation itself.

The city agreed in January to pay $425,000 to remove a railroad spur that is in the same area and also crosses both city and The Mill property. The Mill owners have agreed, Smith has said, to buy back their portion of the property that the spur runs through, and the city plans to sell its remaining property for development. That transaction with Union Pacific Railroad is to close next month, Bradley said.

The area in question is just southeast of the vacant, city-owned property that Smith plans to use for an Argenta Plaza that would be a smaller, publicly run version of the private Sundance Square Plaza in Fort Worth, Texas. Smith led a delegation of 45-50 people Aug. 1 to visit Fort Worth to see Sundance Square Plaza first-hand and talk with its management company.

The city would sell what property it owns adjacent to the plaza for development of residences, restaurants, retail shops and office space, Smith has said. A preliminary concept Smith has shown the City Council includes single-family detached homes, townhouses and 150 "upscale" apartments.

The Mill property is included in such development plans. The Mill property abuts the Arkansas Regional Innovation Hub, a nonprofit focused on entrepreneurial activity. John Gaudin, manager for The Mill's investment partners, said in January that the development of office and residential space would help entice national companies interested in working with the Innovation Hub to relocate near it, benefiting North Little Rock's downtown Argenta district.

The Mill LLC bought the former Prime Quality Feeds mill and nearby properties in 2008 for about $900,000. The feed mill was then demolished, but the property has remained vacant.

Metro on 08/23/2016

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