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UCA Moves Forward with Feasibility Study on Mixed-Use Development

4 min read

The University of Central Arkansas moved a step closer Tuesday to putting a mixed-use building on campus after its board of trustees approved a feasibility study for issuing bonds for a proposed 67,500-SF center at the corner of Donaghey Avenue and Bruce Street.

The bonds are not to exceed $17.5 million. The total cost of the four-story building, named Donaghey Hall, which will bring together retail and commercial space with student housing, has been estimated at more than $17.6 million, including more than $15.4 million in construction costs and more than $2.1 million in cost of issuance and bond reserve and interest payments.

UCA, which has worked with Polk Stanley Wilcox Architects of Little Rock on the building’s design, has agreed to put $250,000 toward the total cost.

The university spent the summer gauging the interest of retailers in being a part of the development, which includes 13,500-SF for lease, while the rest will provide living space for about 165 students.

A major reason for this project is to address housing needs, especially for upperclassmen. As stated in the board’s agenda, the university’s occupancy rates has now been above 99 percent for two consecutive fall semesters.

At the same time, the university also sees an opportunity to offer various retail shops and restaurants to cater to its students and the surrounding area.

T.J. Johnston, who was hired earlier this year to oversee the project as the university’s director of special projects, said talks with potential tenants are going well.

As of now, there have been talks with seven restaurants, including four national chains and three locally-owned. For the most part, UCA is keeping a lid on the names.

Johnston did confirm there have been talks with Waffle House, however, the talks have not been promising to this point.

“We’re not gaining a lot of traction with them,” Johnston said. “Typically, they have locations close to the interstate, so this is different from the the norm for them.”

Where the mixed-use building is to be located is currently the site of a Papa John’s franchise, which Johnston also said the university is talking to about renting space in Donaghey Hall.

Johnston said there are plans to meet with representatives of the franchise next week to discuss a plan that would keep Papa John’s in its current location as construction begins around them. Pending an agreement for space in Donaghey Hall, Papa John’s would remain in that location until a space was ready, at which time it would move and the current facility would be demolished to continue construction of Donaghey Hall.

There are also talks to have a grocery store and pharmacy, a financial institution or bank, and a special retail store that offers merchandise and university apparel in Donaghey Hall.

As previously reported by Arkansas Business, UCA continues to work with the City of Conway on a streetscape plan for a one-mile stretch of Donaghey Avenue between Dave Ward Drive and College Avenue, which includes medians, roundabouts and landscaping.

Johnston said the initial focus is on a roundabout at the corner of Donaghey Avenue and Bruce Street, the site of the proposed mixed-use building, but there are plans for roundabouts farther south.

“Those are conversations we will have to finalize in the future with the city,” Johnston said. “They have been very good to work with and have been at table since the beginning. We know they are going to be a good partner.”

As pointed out in a framework released by President Tom Courtway last year, Johnston said there are plans to further develop Donaghey Avenue in the future, but for right now, the focus is on Donaghey Hall.

“There are hopes that this first building proves successful and shows the demand from students, and eventually, yes, we would want a district with more mixed-use coming into play,” he said.

Outlined in the board’s agenda were different scenarios for lease and housing revenues, break-even years and returns on investment, based on the lease revenue per square-foot. For the two most likely scenarios, which put revenue at $13 or $15 per square-foot, total revenues were more than $1 million and signified years eight and year nine as the break-even mark on the project.

The return on investment hovered between 6.9 percent and 7.1 percent.

The project’s current timeline calls for the board’s approval of the construction manager contract and bond resolution in November or December of this year, followed by a groundbreaking in April. The construction would be completed in June 2016.

Bruce Street Acquisition Clears Way for Science Center Addition

The board also approved the $460,000 acquisition of the Wesley Foundation Campus Ministry property at 2302 Bruce St., which will allow for the $17.5 million expansion of its science building.

The Lewis Science Center project is expected to begin next year and be completed by October 2016.

The addition will add about 50,000-SF to the facility, which is currently 62,000-SF, and will replace the roof of the existing structure.

As part of the agreement, UCA will provide the campus ministry with a 99-year lease at 2331 College Ave. at $1 per year with no rent.

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