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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 2 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. 3 Minutes: Reconvened Meeting 3 -26 -03 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