03-26-03Minutes: Reconvened Meeting
3 -26 -03
MINUTES
Board of Directors Room
City Hall — 500 W. Markham
Little Rock, Arkansas
March 26, 2003
4:00 PM
The Board of Directors of the City of Little Rock, Arkansas met in reconvened session
with Mayor Dailey presiding. The roll was called by City Clerk, Nancy Wood, with the
following Directors present: Directors: Hinton, Pugh, Stewart, Graves, Lichty,
_. Kumpuris, Keck, Adcock, Wyrick. and Vice Mayor Cazort.
The meeting was called for the purpose of dealing with an economic development
prospect.
1. RESOLUTION NO. 11,243 - To authorize the entry into an agreement to issue
revenue bonds for the purpose of securing and developing industry within or near the
City of Little Rock, Arkansas; and for other purposes.
Director Kumpuris stated this was an unusual situation in that there is a opportunity to
issue an invitation to a prospect to come to Little Rock. Their decision will be made in
the next thirty to forty days as to what they will do. Director Kumpuris introduced
members of the prospective organization, Mr. Frank Roland, Executive Vice President
and Mr. David Grimes, Chief Financial Officer of American Management Corporation.
Director Kumpuris stated he thought there was a history in Arkansas of organizations
expanding, some organizations have had to change locations. He gave the examples of
Dillard's starting in Nashville, Alltel starting in Sheridan, Whit Stephens started in
Prattsville, Axiom in Conway, and Wal -Mart started in Batesville, and all have moved to
different locations for different reasons. Director Kumpuris gave a brief history of
American Management Corporation, saying they started in Morrilton, Arkansas as a
small local insurance company. They outgrew their situation there and moved are
looking to see if another location would best suit their needs for the future. Mr. Steve
Strange, American Management Corporation, came to little Rock and talked with Jimmy
Moses and Rhett Tucker after having heard a presentation the made several years ago in
Conway on how a downtown came back to life. Various reasons prompted AMC to think
about relocating. Through a series of discussions with AMC both in Little Rock and in
Conway, it was decided the best way to talk about this situation was to do it publicly.
Discussion was to include things such as what Little Rock has to offer as a city, what this
corporation would do for the City of Little Rock, and what the City of Little Rock could
do for them. Director Kumpuris stated that AMC is the only Arkansas based insurance
company that is left. It is a company that is growing by ten to fifteen employees a month.
It is a company that would come into the River Market, build a building of eight to ten
stories, and would be a company that would make some great enhancements to Little
Rock such as offering a situation where there is the addition of critical mass, important to
downtown. It would help create a successful urban living situation, and adds to the tax
base of the community. They would also take a certain number of spaces in the City's
parking deck (to be negotiated), pay market rate for the period of time the City has the
deck and use the spaces basically on a nine to five basis Monday through Friday, leaving
spaces available for weekend and nighttime parking demands. It would add to the retail
space in the area, creating a plaza for people to come into out of the parking deck.
Director Kumpuris stated the thing that would help the corporation would be a thing such
as a livelier presence, making them more easily recognized, and a number of other ways
in their business situation. Director Kumpuris stated that Jimmy Moses and Rhett Tucker
have spent a great deal of time working on this project, and asked them to give details of
the project. Mr. Jimmy Moses said that today was exciting for him, whether the
American Management Corporation, based in Conway ultimately decides to relocate to
Little Rock or whether they choose to stay in Conway, the State of Arkansas wins. He
said the City of Little Rock and downtown Little Rock wins. He said for the first time
since he had been in business in Little Rock, a company has expressed interest in
relocating into the River Market and downtown Little Roc area. Not to many years ago,
Merrill Lynch announced one day that they were moving out west, and someone told him
Minutes: Reconvened Meeting
3 -26 -03
to tell them to turn the lights out when they go. The lights did not go out, they dimmed
for a period of time, but are back on again, bright and shiny. When you look at what is
happening in the River Market today, or across the road where the new Axiom Building
is coming into downtown, the River Market and The Capital Commerce Center will have
office and commercial space, and places for people to live and the Heifer and Presidential
Library on the horizon, soon to begin construction. It is an exciting environment. Mr.
Moses stated that because of what the city board has done, and under the boards
leadership, another exciting opportunity is presented. Mr. Moses stated the final decision
whether AMC will relocate rests solely with their management. He said that it clearly
was a situation where the City must step up and do everything possible to be competitive
to make sure companies that are homegrown that are making great strides and growing
and becoming successful in the state, know that they are welcome in Little Rock, and are
wanted if they choose to come here. Mr. Moses presented the concept by describing the
site. He said it is located on the east side of the River Market District, the specific site is
bounded by Clinton Avenue, Sherman Street on the east, 2" d Street on the south, and
Commerce Street. He said it is an important site in that there is a building available for
redevelopment, and the site works well as the new City parking deck will be located
along Commerce Street, which is an essential ingredient to the overall package. He said
the concept that his company had been working on with American Management
Corporation is that they would develop a building in the eight to twelve story range,
approximately 120,000 square feet in size and it would be situated on the corner of
Clinton Avenue and Sherman Street. He said there is enough land, when they make the
land acquisition, to let their building sit on the corner and then open up the center of the
block to create a plaza, which would create a wonderful public space that would lead
pedestrians off of Clinton Avenue and into a public space, and then have immediate
access to the new Commerce Street garage. The plaza would also enable the creation of
badly needed retail space in the base of the AMC Center, and potentially give the City the
opportunity to create some additional commercial space that could front not only on
Commerce Street but also on the plaza. Mr. Moses said currently there is about 30,000
square feet of retail space in the River Market District, and there is the potential to double
that space in small shop increments with space in the new center and potential space in
the parking garage. It would be a significant increase in retail. The public space would
enable a couple of restaurants to create some outdoor space and front on to the plaza as
well. He stated that one of the components before the board is as a part of the
inducement resolution, expanding the City's proposed garage in the neighborhood of
from 450 to potential 750 or 800 spaces to enable AMC to take initially between 150 and
200 spaces and then grow up to potential 300 spaces in the City deck. Mr. Moses stated
that this project was another validation that downtown is back alive and vibrant and
healthy and that the City is beginning to attract all sorts of great companies who want to
be apart of what is going on here. Mr. Moses stated if you looked at the resume of AMC
and what they do in their own community in Conway, they would be welcomed on that
basis alone. The would make not only be a wonderful addition to the city's skyline but
represent an addition to the civic efforts of this community, their generosity is
remarkable. Mr. Rhett Tucker mentioned a few things AMC has done in Conway such as
being very supportive of education, the colleges, as well as the public schools. They
made a $20,000 donation for improvements at Conway High School. They would be a
welcome corporate citizen in Little Rock. Mr. Tucker stated he had visited with the
School Board president on several occasions and had spoken with four other School
Board members, as well as the superintendent and they understand this proposal and have
not voiced any objection, and wanted to pass that along to the board. Director Keck
stated this was a continued fulfillment of a dream that the city has had for the downtown
area. He said the city has talked about wanting to do more infill development, to have
mixed use development, and develop the synergy of what is already taking place in the
River Market area and this feeds that. He said he was 100% supportive of the resolutions
that will be presented and hoped that all of the board members would be as well. Mr.
James Schimmer, Executive Director of The Downtown Partnership, announced that
The Downtown Partnership was advocating in the strongest way possible for the
proposed incentive package as an inducement to help make AMC's decision all the
easier. He said that regardless of their decision, he wanted to make a statement to all
companies. "Downtown Little Rock is open for business" and "we want you here ". The
Downtown Partnership wants AMC in the worst way, but understand that they have their
own decision to make. He said what he could guarantee today for AMC is a quality of
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Minutes: Reconvened Meeting
3 -26 -03
life for their employees that is found nowhere else in the State of Arkansas, and an urban
downtown of superior opportunity for AMC to meet it's corporate dreams and to grow.
He said it is a wonderful opportunity for Little Rock and said The Downtown Partnership
Board and membership is strongly behind this package of inducements and hoped the
board would act on it favorably. Mr. Bill Clark, representing the Chamber of
Commerce and Fifty for the Future, stated the business community does support this
program 100% and Fifty for the Future has pledged $100,000 as incentive to get AMC
located in Little Rock, and asked the boards support of the resolution.
Mr. Tom Carpenter, City Attorney, briefly outlined the content of the resolution. He
explained the resolution basically authorizes the City to enter into an agreement with
American Management Corporation for the issuance of Act 9 Bonds, which are industrial
development bonds, at no cost to the city because the cost would be paid from the bond
proceeds. Attached to the resolution is an agreement to issue the bonds (Exhibit A). On
Page 7 of 9 in the agreement there is a provision dealing with parking availability. The
city agrees it would enter into a long -term lease with the number of spaces need by AMC
and AMC agrees to pay a market price.
Director Pugh stated she was supportive of the project, and thought it was a good thing
for her ward. Director Pugh also asked how many jobs the project might bring. Director
Kumpuris sated they currently are adding 6 to 10 jobs net per month. It would be an
eighteen -month period of tie before they would be ready to come and they have about
150 to 200 employees now, and anticipate growth up to 400 or 500, and they have a
number of employees that would probably relocate from Conway. Director Lichty stated
he shared in all the excitement about this new development and complimented all those
involved in bringing it to this point. He said there is a cost to this. There is a payment in
lieu of taxes which can coat the city somewhere between $2.5 million over the term of
the twenty years this building would be paid for. He said that loss is mitigated in his
opinion to a great extent by the suggestion that there will be retail at the bottom of the
building and residential on the top of it, which would in fact be paying those taxes and
just wanted to emphasize that, and invited anyone connected with the project to come
forward and reaffirm that is one of the objectives that would be strived for as this moves
forward, although at this point here is no commitment in the documents. Mr. Moses
responded that this was a delicate effort all the way around, and an effort to create an
open door is the objective. He said he and Mr. Tucker had worked diligently with the
company for the last several months to create the proposal as presented today. He said
they are in the position of considering how this fits their long -range plans. He stated that
form day one, Mr. Steve Strange said to them was that one of the things he liked greatly
about what is happening in the River Market that attracts him here is the energy, the
vitality and the diversity of activities, and thought all this would be a real plus to his
employees. By that he meant the places to eat, the places to shop, and the places to live.
When this concept was first shared by AMC management in Conway approximately six
weeks ago, it was as you see it today, with the retail on the ground floor, the top floor
designed for residential use. He said it is contemplated that this would be a package and
that there is development opportunity of people like their company and others in their
business who would see the opportunity, if AMC says they would do the office only, he
felt you would see others like them, being very interested in developing the commercial
and the residential space, as these create the center piece from which the others could
grow. Mr. Moses said that coincidentally in the last two weeks they had a national
developer that they had previously worked with contact their office, and previously they
have been involved in suburban retail development, and are a very reputable company,
with a lot of good national retail contacts. Mr. Moses said their office shared with them
the details of this project without saying who they were in terms of the company but
rather what was being proposed, and they are interested in partnering with his and Mr.
Tuckers company to bring national retail into downtown Little Rock if this happens.
From an intent and opportunity standpoint, you would see commercial development be a
part of this project. Director Lichty stated that added to his comfort level, and there was
no doubt that this would be approved, probably unanimously, because that is what cities
do to encourage this sort of thing, and it looked to him like a wonderful plan and asked
the board to approve it.
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Minutes: Reconvened Meeting
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The resolution was read. A motion was made by Director Lichty; seconded by Vice
Mayor Cazort to adopt the resolution. By voice vote the resolution was unanimously
adopted.
1. RESOLUTION NO. 11,243 - To authorize the entry into an agreement to issue
revenue bonds for the purpose of securing and developing industry within or near the
City of Little Rock, Arkansas; and for other purposes.
A motion was made by Director Adcock, seconded by Director Lichty to adjourn the
meeting. By unanimous voice vote of the board members present, the meeting adjourned
at 6:50 PM.
ATTEST:
cy Wo d
C Clerk
APPROVE:
Ji ailey
M yor
0