A consortium of banks led by Centennial Bank has sent a letter of intent to the Little Rock Technology Park Authority to enter into “good faith negotiations” on a proposed loan of $17.5 million for the construction of Phase 1 of the tech park.
Centennial would be the “Lead Lendor”; other participating banks include the Arkansas Federal Credit Union, Arvest Bank, Bear State Bank, First Security Bank, Simmons Bank and “other to be determined banks.”
The Authority board voted today to turn negotiations with the consortium over to board member Dickson Flake. Flake proposed that board chairman Dr. Mary Good be allowed to approve, but member Tom Butler said he wanted the full board to hear the final proposal before it’s approved.
The letter of intent proposes a fixed interest rate of 4.19 percent for the term of the loan. If a portion of the loan qualifies for a tax exempt rate — for leases to public entities, for example — the rate would be 3.25 percent. The loan would mature in 72 months. The consortium will require a “detailed construction budget for the proposed improvements to comprise the Technology Park” that would “be satisfactory to Lead Lender and an independent inspecting architect or engineer.” The letter was signed by Jeff Hildebrand, executive vice president.
The loan would allow the park to buy the Exchange Building at Fifth and Main, its annex next door, parking lots west across Main and next to the KATV building at Fourth and Main, and the Mays Building. The Mays Building has been appraised at around $500,000; the other properties, owned by Warren Stephens’ Five Main LLC and DMT Ventures LLC, appraised at $11.6 million. Larrison and Co. did the appraisals.
Little Rock is transferring more than $6.8 million in tax receipts into the park’s account; that will be the park’s equity on the loan. The park would also get revenue from the lease of the Exchange Building, occupied by the Department of Higher Education.
At one time, the city said a tax passed in 2011 would provide $22 million for the park by 2021, but the tax has produced less revenue than expected.
Flake said the Authority is not committed to bargain only with the consortium; he said he’d welcome competition from other banks.
The Authority board learned today that two companies have “graduated” from startup status and moved out of the LR Tech Park @ 107 space on Markham. Apptegy is moving to the Simmons Tower; Elyxor is returning to Boston. Tech Park Director Brent Birch said, however, that he expects both to be a part of the tech park when it finally has space to offer.
Absent from today’s board meeting were Darrin Williams, Jay Chesshir and Kevin Zaffaroni (who has announced he will be leaving the board).
Here’s the answer by an astute question below by Claude Bahls: Yes, Brent Birch is the son of Bob Birch, Centennial regional president.