New Cantrell Space Filling Slowly

by Mark Friedman  on Monday, Aug. 7, 2006 12:00 am  

John Rees, president of Rees Development Co., of Little Rock, said signing up tenants is going slower than expected at his new commercial properties on Cantrell Road.

On June 20, Cantrell Road neighborhood groups claimed a victory when the Little Rock Board of Directors rejected a request for a pizza parlor to stay open past 8 p.m.

But even if the decision survives a court appeal, the fate of one restaurant is only a skirmish in the battle between residents of far-west Little Rock and the developers that have scrambled for tenants along the three-mile stretch of Highway 10 between Sam Peck Road and Chenonceau Boulevard.

Since 2005, seven commercial projects totaling more than 320,000 SF have opened on Cantrell, also known as Highway 10. Another major commercial project, the Pleasant Ridge Town Center at 11525 Cantrell Road, is expected to open in October.

While the office space is leasing slower than expected for some developers, the retail space is among the hottest spots in the city, which doesn't make some neighbors happy.

"I think [the growth] has happened much too quickly," said Alicia Finch, vice president of the Coalition of West Little Rock Neighborhoods.

"I don't know how much more commercial development Little Rock can handle. And that's been our question [to developers]: What's your population base for supporting all this? Where are all these people going to come from that you are expecting to shop at these places?"

Developers say their retailers want to open shop on Cantrell Road. Much of the retail space is being absorbed, said Dickson Flake, chairman of Colliers Dickson Flake Partners of Little Rock, the state's largest property management firm. (See List, Pages 26-27.)

Store owners are interested in moving to Highway 10 because of significant disposable income in the upscale neighborhoods nearby, and the Wal-Mart on Highway 10 has attracted other shoppers who normally wouldn't have been in the area.

"It's purely a good location," said Hank Kelley, president and CEO of Flake & Kelley Commercial of Little Rock, who cited easy access from Interstate 430.

But not all developers are pleased.

Signing up tenants is going slower than expected for John Rees, president of Rees Development Co. of Little Rock, which developed Pinnacle Station at 14524 Cantrell Road and Pinnacle Creek at 14810 Cantrell Road.

Rees said he has lowered his rents from about $17.25 a SF to the $16.50-$16.90 range.

"I've got several people signed up on the Pinnacle Creek [location] and still got two or three spaces over there," he said. "It's coming along."

Rees said some of his potential tenants opted to go to Pleasant Ridge, which is expected to open Oct. 18. Pleasant Ridge will feature about 300,000 SF and be anchored by Parisian and The Fresh Market.

Rees' Pinnacle Creek opening is targeted for Sept. 1, while Pinnacle Station opened at the first of the year.

He said if both of his properties didn't open around the same time, it would have made leasing space easier.

"We think our locations are very good and are going to be very good in the future," Rees said.

Office Space

Less rosy is the outlook for new office space development on Cantrell.

Nearly all of the retail space at The Centre at Ten at 12911 Cantrell Road has been leased, but Kelley still is looking for office tenants.

More than 60 percent of the 60,000 SF of office space is leased.

"A lot of the spaces are becoming attractive to the medical (professionals) that are not dedicated to being on the campus environment," Kelley said.

By the end of the year, Kelley hopes to have 80 percent of the office space occupied.

It will take another six to nine months to get it to normal occupancy, which is between 92 percent and 95 percent.

"At least that is what I'm hopeful of. I'm an optimistic guy," Kelley said.

The Bella Rosa Commercial Center at 16101 Cantrell Road has its 29,000 SF of office space open — at least for now.

"We've got a couple of tenants that are going to move in and the project is looking like it's coming along fine," said Pete Hornibrook, CEO of Rector Phillips Morse of Little Rock. "In the next couple of months you'll see two or three tenants that are office use, and we feel like in the next nine months we ought to have it full, if the market stays like it is."

Hornibrook wouldn't disclose who the new office tenants are, except for an RPM office that will take up about 3,000 SF.

The other tenants haven't committed yet.

"These are proposals we have out," he said.

Hornibrook also said the office space hasn't been snatched up faster because there are several new office developments along Highway 10. And Bella Rosa is farther from Interstate 430 than its competitors, he said.

Pizza Place

While RPM is looking for tenants for its Bella Rosa office space, it is also keeping an eye on the lawsuit involving its sole retail tenant, Jim's Razorback Pizza.

Jim's recently sued the city of Little Rock in an attempt to extend its hours of operation. Its current zoning restriction calls for closing by 8 p.m.

Hornibrook said RPM didn't own the center when Jim's Razorback's lease was signed, but RPM was the leasing agent at the time.

RPM, led by Lloyd Walker, bought the 7.6-acre development for $4.5 million in May. The seller was Highway 107 Associates LLC, led by James May III and Warren Stephenson.

"When we lease something we do not sign the leases, the owner signs the leases," Hornibrook said. "(Highway 107 Associates) were the owners. We present leases to the owners, and they're the ones to accept it."

Hornibrook said he shouldn't comment further because of the pending litigation.

The pizzeria's attorney, Roger Fitzgibbon of Little Rock, wouldn't say what his client was told when he signed the lease.

An employee at the restaurant said the closing time is 10 p.m.

Little Rock City Attorney Tom Carpenter said the city is proceeding with its prosecution of the pizza parlor, which has been cited for staying open later than the zoning allows, he said.

If the restaurant is found guilty, a Little Rock district court judge will determine the fine.

Jim's Razorback Pizza is trying to receive an injunction to stop the city from enforcing the closing time.

Carpenter doesn't think Jim's Razorback Pizza has a chance of being successful.

"The question isn't about zoning or rezoning. It's whether the board acted arbitrarily and capriciously," he said. "[The city board] has heard all the arguments from the various parties and made their decision."

Jim's Razorback Pizza appealed the decision on June 27 to Pulaski County Circuit Court, asking a judge to extend the hours.

A hearing is set for Aug. 23, but Fitzgibbon is hoping for an earlier date.

Residents' Concerns

One of the residents that attended the Little Rock Planning Commission meeting on May 11 to speak against the hours being extended was Alicia Finch, who lives nearby.

She said last week that she thinks the city has gotten away from its original plan for Highway 10 development, which was to keep it a scenic highway.

Since the property at Bella Rosa had already been zoned so that the restaurant couldn't stay open past 8 p.m., it should stay that way, Finch said.

"The developers have the upper hand, and they know they do," she said.

Finch said she now gets worried when she sees a sign for a new development.

"I think, 'Oh gosh, what's going to happen now?'" she said.

She said she fights because "it's just the idea of keeping the city accountable and not be so taken in by the dollar signs."

Little Rock is trying to maintain the master plan for Cantrell Road, said Tony Bozynski, Little Rock's director of planning and development.

Billboards are prohibited on the stretch of Highway 10.

"The goal of the Highway 10 plan was to create commercial nodes, to not have the strip-development pattern," Bozynski said. "So I think the city is trying to maintain the plan."

Finch said her fear is that the retail and office markets will dry up and the highway will be lined with vacant stores that will lower residential property values in the area.

Finch and her neighbors also don't want that stretch to become like Rodney Parham Road, which is jammed with fast-food restaurants and other retail stores.

Hank Kelley said the projects on Highway 10 don't compare to those on Rodney Parham.

"You won't see the single-curb-cut mentality that you see on Rodney Parham around the Reservoir Road area," he said. "Literally, you have a turn in or turn out every 50 feet, and so what you end up with is cars coming and going off the street all the time."

On Highway 10, access points are more controlled.

Kelley also said he tried to put tenants in that fit the neighborhood, such as restaurants and upscale stores.

Kelley thinks the growth on Highway 10 is healthy.

"That healthy supply produces opportunities for shop owners," he said. "That is much better for our community than the alternative, which is I can't open a business where I want to be."

 

 

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