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Argenta Community Development Corp. Weighs Its Future

5 min read

While Argenta Community Development Corp. of North Little Rock ponders its future — including whether to dissolve — the nonprofit first must deal with a foreclosure lawsuit filed against it last month after defaulting on a $560,000 loan.

Simmons First National Bank of Pine Bluff is seeking a judgment against Argenta CDC for $563,000 for defaulting on a December 2008 loan. It looks like Simmons will recover the property at 709-715 Main St. that was used to secure the loan because the CDC doesn’t have the money to pay the debt and hasn’t been able to find a buyer, Executive Director Hannah Vogler said last week.

“We have made a strategic decision — many, many months ago — to not attempt to keep that building,” she said. “We are trying to get that building in the hands of somebody who can develop it into what Argenta needs, but it’s not going to be us.”

The Simmons lawsuit comes a year after Vogler’s predecessor, Mary Beth Bowman, complained in a resignation letter that the CDC’s finances were in rough shape.

“I do not know from month to month whether we will be able to meet payroll or pay our expenses,” Bowman said in the Aug. 26, 2013, letter to the board of directors that Arkansas Business obtained under the Freedom of Information Act.

Bowman last week declined to comment on Argenta CDC.

For 2013, Argenta CDC reported a $227,164 loss after posting net income of $59,062 the previous year, according to its annual reports to the Internal Revenue Service. The IRS Form 990 that nonprofits must file every year is open to the public.

Vogler said the loss was tied to an accounting change. She said the CDC had enough cash to cover four to six months of operating expenses.

Vogler said she had improved Argenta’s finances since taking the executive position last September.

Meanwhile, Argenta CDC has met the mission that it set out to accomplish in 1992, which was to “save Argenta,” Vogler said.

The official mission states it will promote homeownership for low- to middle-income families and improve the quality of the neighborhoods.

“Look all around — it’s kind of incredible what has been accomplished and in a relatively short time,” she said.

An example: Some nights, Argenta’s Main Street is buzzing with activity from the Argenta Community Theater, which features local, regional and national productions and special events, to the Joint Theater & Coffeehouse.

The question Argenta CDC faces now is what should it do going forward.

“That is something that we are still struggling with,” Vogler said.

She said the board is discussing everything from selling its property in Argenta, which includes a controlling interest in the 57-unit Argenta Square Apartments, or taking the property over itself and becoming property managers.

“Everything is on the table as long as it is making sure that … the neighborhood is stable,” Vogler said.

Don Chambers, Argenta’s board president, said last week that the board will continue to govern with “prudence to take care of our multifamily projects.”

Revolving Door

In the early 1990s, “Argenta had gone so far down,” Rosemary Hamel, who was one of the founders and first executive director of Argenta CDC, told Arkansas Business last week. “There were vacant houses, burned-down houses. People were afraid to live here.”

In 1992, Argenta CDC was formed and was designed to improve the neighborhood. Its first target area focused on the area from the Arkansas River to 22nd Street and Interstate 30 on the east to Pike Avenue on the west.

Under Hamel’s leadership, the nonprofit invested more than $12 million in 98 properties, and 143 housing units were renovated or built by 2006. In addition, about 18,000 SF of commercial property had been restored.

But after Hamel left the nonprofit, there was a revolving door at the executive director position.

Steve Ficklin, who replaced Hamel in 2006, was fired just a year after a female employee accused him of exposing himself and requesting sex, according to an article in the Arkansas Democrat-Gazette. Argenta’s next executive director, Brad Williams, also was fired as executive director in 2011, according to the Democrat-Gazette.

In 2011, Bowman was hired as executive director and quickly had concerns about the organization’s finances.

“The Board was not forthcoming about the financial condition of the organization,” Bowman wrote in her resignation letter. “Argenta CDC was almost $1 million in debt and spending nearly $30,000 more a month than revenue generated” when she arrived.

Bowman said she slashed expenses “to the bare bones.”

For 2011, the organization reported a profit of $47,654 on total revenue of $3.3 million.

Bowman also said that there were eight employees when she started and only three full-time and one part-time workers when she left in 2013. Now Argenta CDC has one part-time employee; Vogler is considered a paid consultant and not an employee.

Vogler said that when she took over for Argenta CDC in September 2013 it had financial troubles.

It was “hemorrhaging daily” from a $6.4 million Department of Housing & Urban Development grant awarded in 2010 to Argenta, Habitat for Humanity and the city of North Little Rock. The grant called for homes to be built in Argenta and, when they sold, for any profit to be used to build more homes, Vogler said.

But Argenta lost money when it sold a home, Vogler said. Three of the homes were sold last year, she said, putting the program underwater by about $350,000.

And selling the rest was difficult because potential buyers didn’t meet new, stricter mortgage requirements, Vogler said. Argenta CDC lost money while 16 homes remained vacant.

Vogler made arrangements to have the homes in the program, which were in the Baring Cross and Holt neighborhoods near Pike Avenue, transferred to Habitat for Humanity. Habitat offers its own financing to homeowners, so they don’t have to meet the stricter lending requirements from a bank or mortgage company.

The transaction closed in April and now Habitat has sold nearly all of the homes, she said.

Vogler also said Argenta CDC has been trying to shed itself of the Main Street building, which is the subject of the foreclosure lawsuit. About $850,000 had been spent on that project, but “the buildings aren’t worth anywhere near that,” Vogler said.

Still, even with the Main Street building debt, “we are in a much more stable situation than I think the organization has been in in several years,” she said.

Now the board is trying to decide what to do next, she said.

She said she hopes the board has a decision by the end of the year.

“I think it’s safe to say that you will not see a thriving, big Argenta CDC of the past,” Vogler said.

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