LR port added 600-plus acres in year's time

A map showing new land for Port of Little Rock
A map showing new land for Port of Little Rock

The Port of Little Rock, needing more land to take advantage of its access to world markets via water, has been on an acquisition binge lately.

It obtained control either through purchase or lease of more than 600 acres in the past year.

This month, the Little Rock Port Authority and Little Rock Board of Directors approved the port's latest acquisitions totaling 75 acres.

The authority has a 2,600-acre industrial park along the Arkansas River, but to add to the 40 companies and 3,500 jobs already there, the port needs more real estate.

The port had not purchased any land for several years before Bryan Day took over as its executive director in 2014.

His arrival came just after Little Rock voters in 2011 passed a three-eighths percent sales tax, which included $10 million set aside for the port to acquire more land before the tax expires in 2021.

When Day came aboard, pickings for industrial prospects were limited to a 168-acre parcel off Zuber Road, which Day calls "probably the best shovel-ready site in central Arkansas," and a 23-acre site off Sloane Drive.

"That was all the land we had in the industrial side of the port," he said.

The port also has 120 acres of usable land along the river, but under requirements that came with federal money that has been used to build port infrastructure, it is limited to companies that will use the 448-mile McClellan-Kerr Arkansas River Navigation System, which runs from the Mississippi River to 15 miles east of Tulsa.

The dearth of property, especially the big swaths needed by companies such as Welspun Tubular LLC -- the pipe manufacturer that employs about 800 on its 740-acre site in the port -- has led to missed opportunities, said Jay Chesshir, president and chief executive officer of the Little Rock Regional Chamber of Commerce.

"We have had a significant number of [companies] that have asked for and needed a site much larger than we have had available to this point," he said.

The acquisition binge began about a year ago when the port purchased a 165-acre tract. In early 2017, the port bought a 308-acre parcel.

The port also acquired a 50-acre tract and, earlier in December, closed on a 5-acre property, Day said.

The latest acquisitions aren't expected to be final until early in the new year.

The port is also entering into a five-year lease with the Jack Tyler Family LLC of Little Rock for a 60-acre parcel.

Under the agreement, the port will lease the land for $450 per acre, or $27,000 for all 60 acres, annually for five years. The port has the right to purchase the land if it needs it before the end of the lease.

The agreement gives the port some flexibility for land it doesn't need right away, Day said.

"The longer we lease it, the less the per-acre price is," he said. "It allows the port to close at any time if we attract a prospect. If we closed today, the cost would be more than if we closed at the end of five years."

Also approved by both the port and city boards this month was a resolution authorizing Day to purchase another 15-acre parcel.

In all, the port has spent $4.5 million of the $10 million set aside for property acquisition, according to Day.

"We're not done," he said. "We still have more money available."

But Day insists there has been a strategy to the land acquisition. The purchases have been carefully targeted and executed with deliberation because the port cannot afford to miss, he said.

The port, for instance, has no authority to acquire land by condemnation or eminent domain, a legal right of the government to take private property for public use with compensation.

Nor does the port make purchases without third-party appraisals in an effort to be transparent, according to Day.

The port also wants to avoid property, where possible, that involves environmentally sensitive wetlands, which can involve expensive mitigation, Day said.

"We want to be responsible stewards," he said. "We want to do no harm."

Land the port acquires has to be accessible to utilities and rail.

The port's main source of income is the use of its railroad switching operations, which are expected to generate all but $1 million of its $3,365,031 in income in 2018.

"That's how we thrive," Day said. "That's how we grow."

The port also is mindful of its neighbor, the Quapaw Tribe of Oklahoma, which owns what it sees as ancestral land in the vicinity of the port.

"They are here," Day said. "They own land that has historical and cultural artifacts and remain important to them."

One of the latest parcels the port has acquired, a 15-acre tract, has a purchase agreement "contingent upon position findings" of environmental and architectural studies, among other things.

Acquiring the land is only a first step. The port wants to make improvements to the property as money allows, which means the purchases made in the past year might not pay off for years.

"We don't expect an immediate payoff," Chesshir said. "But this allows us to do the necessary infrastructure improvements required to be competitive for projects in the future."

The large projects need both port and rail access, he said. Work also will need to be done to improve the roads in and around the new property.

Day said the port is mindful of the challenges ahead.

"Now, we are putting together a plan to make it shovel ready," he said. "I feel very good about where we are."

SundayMonday Business on 12/31/2017

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