The Little Rock Board of Directors voted Tuesday to provide $6.6 million in sales tax proceeds to the Little Rock Tech Park so it can purchase properties along Main Street for its permanent home.
City board members voted 9-0 to make money available for the project. The first disbursement, $5.6 million, is available immediately. The balance is payable no later than Dec. 31.
On Wednesday, Brent Birch, the park's director, called the allocation a "monumental first step" in taking the park from concept to reality.
"To remain competitive from an economic development standpoint, Little Rock had to make this move now while the growth of this sector is still in its relatively early stages," Birch said in an email to Arkansas Business. "Phase 1 will serve as a launching point in serving and promoting the burgeoning tech industry in central Arkansas, and we are excited about the support from the city and the tech community."
The vote comes after the Little Rock Tech Park Authority voted July 8 to move ahead with a purchasing agreement to buy property for the park for $11.6 million from Stephens Inc. of Little Rock. The purchase includes the Exchange Bank building at 421 Main St., its annex at 417 Main St. and three parking lots.
To purchase the property, the park needed to tap proceeds from a city sales tax voters approved for the park in 2011. The tax is set to generate $22 million for the park, but it doesn't accrue until 2022. Only $6.6 million would be available before the end of the year.
But the Stephens purchase is just one piece of the park's first phase, which would take up 3.25 acres and include renovation of about 39,000 SF of gross building area, according to a report Birch compiled (PDF) for Tuesday's board meeting.
The site is on the north side of Capitol Avenue on both sides of Main Street, with one additional parcel on the north side of Fourth Street. On the east side of Main Street, the site is bordered by Scott Street between Capitol Avenue and Fourth Street.
Other properties on the prospective site include the KATV building and parking garage, the Mays Byrd & Associates law firm at 415 Main St. and a parking lot owned by the Arkansas Teacher Retirement System and leased by the Rose Law Firm.
The Tech Park is seeking $17.5 million in loan financing to purchase the Stephens real estate and the Mays Building, and pay for renovations, demolitions and other professional services of the project. The park plans to use the city's $6.6 million dispersement as a down payment on the loan.
Birch had the loan financing RFP (PDF) posted in the Arkansas Democrat-Gazette on Monday and sent to banks who had expressed interest in the project.
The loan would be an interest-only, fixed-rate, six-year loan with right to prepay on principal.
"It is the intent of the LRTPA to prepay principal as it receives City Board appropriations from the capital fund sales tax," the proposal says.
The RFP sets a July 31 deadline to receive bank proposals.
Apart from obtaining loan financing, Birch said the project's next hurdle is finalizing a purchase deal for the Mays building, as well as the design and renovation work on the Exchange building next door.
In all, the project's phase one timeline includes closing on the financing and property purchases by Jan. 6, with construction beginning five days later.
"We will evaluate the timeline on future purchases, including the parking lot adjacent to Rose Law Firm and the KATV studio and deck, once we are a little farther down the road with Phase 1A," Birch said.