The Little Rock Port Authority board has formalized an agreement for the Little Rock Regional Chamber of Commerce to appraise an unnamed international manufacturer that has expressed interest in establishing a facility at the Arkansas River port.
The chamber typically conducts due-diligence reviews on economic-development prospects, but this is the first time the port's staff has sought to have a formal agreement, said Bryan Day, the port authority's executive director.
Little is known about the company, other than that it would make use of barges to either accept raw materials or ship finished product, according to Day. He also said the company prefers to lease rather than purchase property if it ultimately decides to put a facility at the port.
"We have not done this before this way, but if they wanted to buy a piece of property from us, we would bring you a separate land transaction," Day told the board at its monthly meeting Wednesday.
He called the due diligence "pretty intense" and said it included a review of the manufacturer's business plan, a project overview, resumes of key executives, at least two years' worth of audited financial statements, and an explanation of "how we are going to make this work in this community."
The agreement gives the chamber 120 days to complete the review and report back to the board.
The resolution authorizing the agreement was approved on a unanimous vote of the five members present from the seven-member board.
The resolution also signals the port's interest in recruiting the manufacturer, which is considering other port locations, Day said.
"By doing this, taking this formal action, it lets the board know what's going on but it also lets the prospect know that we have interest in having this dialogue," he said.
Because little is known about the company, it is prudent to review its financials and other data, said Jay Chesshir, the chamber president and chief executive officer.
"The reality of economic development is that there are companies that are obviously better prepared for doing a project and being sustainable after the completion of the construction," he said in an interview after the meeting. "There are others that are sometimes looking for incentives to make their project work because they don't have the access to capital that they specifically need to do it.
"So that's why we do this due diligence to make sure that the company and its project first of all is creditworthy."
The port and chamber also didn't want to unduly burden the company's planning, Chesshir said.
"They don't want to be unnecessarily slowed in terms of what they're trying to do from a project timeline," he said. "They just wanted us to formalize that we were doing it and the timeline in which we would complete it."
Business on 08/22/2019