North Little Rock's proposed purchase of a railroad spur in the center of downtown would help the city and an adjoining property owner market the area for the development of offices and residential space, Mayor Joe Smith said.
Smith has a resolution headed to the City Council on Monday that proposes paying Union Pacific Railroad $425,000 for a narrow strip of land about one acre in size that the spur is on.
The spur is in the center of an area bordered by Bishop Lindsey Avenue and East Fourth Street to the north and south and Main and Magnolia streets to its west and east. The city already owns the northern portion of the area the spur runs through, and The Mill LLC, headed by Harold Tenenbaum, owns the remainder.
The Mill LLC bought the former Prime Quality Feeds mill, 124 E. Fifth St., and nearby properties in 2008 for about $900,000. The feed mill was then demolished to make way for a planned mixed-use development heavy with residences, but removing the railroad spur would need to come first.
"I think we've reached an agreement" after two years of negotiations, Smith said of the purchase from Union Pacific. "That will no longer split five or six sections of the property because of the spur, and we can sell it as one big piece.
"It's immediately on the market," once the purchase is closed, Smith added. "We're hoping this allows us to be aggressive in pricing the property. Before we didn't know what we'd have to pay for the spur. We'll get our money back from the spur."
The part of the spur that crosses Tenenbaum's property would be immediately bought from the city by The Mill LLC to complete that portion of the property for development, said John Gaudin, who serves as the manager for The Mill investment partners.
"The idea is that the city would purchase the spur and then we would purchase from the city the portion that runs through our property," Gaudin said.
The Mill's property abuts the Arkansas Regional Innovation Hub, a nonprofit focused on entrepreneurial activity, at 201 E. Broadway. Gaudin said purchasing the railroad spur would present an opportunity for the development of office and residential space for national companies he said are interested in locating near the hub to work with it.
"They will need housing and office space and other various needs," Gaudin said.
The city also is having fiber optics owned by AT&T and Sprint relocated from the spur property to help make it immediately available for development, Smith said.
"AT&T and Sprint have agreed to move it," Smith said. "We're going to pay them $76,000 to move that off that property. We plan to step up the development of that property."
Metro on 01/22/2016