'Cost to Cure' Backs $8M Buy From Democrat-Gazette

Site work along Rector Street is following a trio of purchases to expand the Interstate 30 corridor in downtown Little Rock.
Site work along Rector Street is following a trio of purchases to expand the Interstate 30 corridor in downtown Little Rock. (Jason Burt)
Site work along Rector Street is following a trio of purchases to expand the Interstate 30 corridor in downtown Little Rock.
Site work along Rector Street is following a trio of purchases to expand the Interstate 30 corridor in downtown Little Rock. (Jason Burt)

The most expensive stretch of right-of-way acquisition for the $1 billion 30 Crossing highway project in Little Rock-North Little Rock is mostly squared away.

Three of the five properties along a three-block stretch of Rector Street in downtown Little Rock are in hand after the Arkansas Highway Commission paid $9.3 million for two warehouses and a convenience store.

The purchase of a sliver of undeveloped land along Rector Street hasn’t closed, while the value of an adjoining strip of land on the western edge of the Holiday Inn Express site at 811 E. Fourth St. is in dispute in Pulaski County Circuit Court

There was no disagreement when the Highway Commission offered $8 million to buy a 1.26-acre piece of the printing complex owned by Arkansas Democrat-Gazette Inc.

The valuation of the land and 45,800-SF warehouse at 806 E. Fourth St. presented a financial windfall for the Arkansas Democrat-Gazette that led to haggle-free negotiations with the Arkansas Department of Transportation.

“They came in and made us an offer that we accepted,” said Lynn Hamilton, president of the newspaper company.

The $8 million offer even reflected an extra $196,000 and change higher than the appraised value calculated by Ridge Point Consultants of Meadville, Mississippi. Ridge Point determined the market value to be $7.85 million in its appraisal report commissioned by ArDOT.

The biggest variable in the appraisal report valuation falls under the heading of “cost to cure.”

More than $5 million of the appraised value is associated with that category, which largely reflects the cost to rebuild the warehouse and offset damages to the neighboring printing plant caused by its removal.

In Ridge Point’s report, the land itself carried an appraised value of nearly $1.4 million with the warehouse adding another $1 million. An additional $126,850 was placed on the value of other improvements such as railroad tracks, fencing and paved parking.

The printing press warehouse was vacated in October, and demolition is nearly complete. While compensated to reflect a rebuild of the project, the Arkansas Democrat-Gazette entered into a long-term lease for about 30,000 SF at 1600 Gregory St. in North Little Rock.

The warehouse was devoted largely to storing rolls of newsprint, tons and tons of paper shipped in to feed the neighboring printing presses at 301 Byrd St.

These days, the 77,196-SF facility prints the daily editions of the Hot Springs Sentinel Record and the Sunday-only editions of the Arkansas Democrat-Gazette, Camden News, El Dorado News-Times, Magnolia Banner News and Texarkana Gazette.

The warehouse-printing plant complex originally supported publication of the Arkansas Gazette.

The combined 6.19-acre development carried a value of $5.1 million in October 1991, when ownership transferred to Walter Hussman’s Little Rock Newspapers Inc. from Gannett River State Publishing Corp., successor to the Arkansas Gazette Co. The Ridge Point appraisal for ArDOT valued the overall project at $15.4 million this year.

On the back side of the warehouse acquisition, construction of a one-block extension to connect Collins Street and Mahlon Martin Street is scheduled to begin this month and be complete by summer. The project will link Third and Fourth streets across the newspaper company’s former property. The new stretch of city street will establish a new north-south route for traffic between Third and Ninth streets.

Jon Honeywell, Little Rock’s director of public works, said that whether the new roadway is dubbed Collins or Mahlon Martin remains undetermined. “Which one of those, I don’t know,” Honeywell said.

Other property owners on both sides of the Arkansas River believe ArDOT needs to be more generous with its cost-to-cure sugar in right-of-way deals along the Interstate 30 corridor.

Under the mantle of eminent domain, seven condemnation lawsuits are in motion in Pulaski County Circuit Court to force the relinquishment of property with arguments over just compensation to follow.

East Village Hospitality, developers of the Holiday Inn Express at 811 E. Fourth St., believes the financial impact of losing 8,531 SF of land plus a temporary construction easement on 7,487 SF of its property is worth more than $263,050.

Other property owners and rejected ArDOT offers include:

► Schlereth Family LLC, $208,925 for 4,471 SF and 2,658 SF associated with billboards on the North Little Rock side of the I-30 bridge plus a 288-SF temporary construction easement.

► Carpenter Outdoor LLC, $55,375 for 545 SF of Maryjane & Co. hair salon property at 801 E. Sixth St. in Little Rock plus a 4,012-SF temporary construction easement.

► Kochtitzky Trust No. 2, $14,200 for 581 SF of the McDonald’s property at 600 E. Broadway in North Little Rock plus a 3,022-SF temporary construction easement.

► K&Y Foodmart Inc., $13,125 for 314 SF of the convenience store property at 716 E. Ninth St. in Little Rock plus a 262-SF temporary construction easement.

► Billy Earl Jacks Jr. Irrevocable Trust, $700 for 49 SF of a garage property at 313 E. Broadway in North Little Rock plus a 237-SF temporary construction easement.

► SREIT RI Little Rock Propco LLC, $325 for a 52-SF temporary construction easement on property associated with the Residence Inn Marriott at 2019 River Market Ave. in Little Rock.

All told, ArDOT has possession of 30 of 43 right-of-way properties supporting the 30 Crossing project. The remaining 13 should be purchased or acquired through court action by the end of this month.