It was 12 years in coming, the Little Rock Technology Park, first conjured by the Little Rock Regional Chamber of Commerce’s Biotechnology Task Force in 2005. Since the park’s March opening, it’s attracted 29 tenants to its renovated, and now connected, buildings at 415 and 417 Main streets (now under one address, 417 Main).
Only three spaces are free on the two “turnkey floors” of the six-story main building, formerly known as the annex to the Exchange Building at 421 Main St. Tenants on those floors are leasing space on a short-term basis, from one month to a year, at below-market rates, an arrangement suited to startup businesses and one that Little Rock Technology Park Director Brent Birch has likened to “gym memberships.” The first floor of the main building is fully leased to the Venture Center, a business accelerator; the second is open-plan co-working space.
A tour of the park gave this reporter an idea of the variety of businesses leasing space there. Three examples:
Alese Stroud is CEO of tech park tenant Corporate Insight Strategy, a startup developed last year in the Venture Center accelerator. CIS helps “coach companies to survive major transitions” to new management using software it developed to look at almost 200 factors that determine sustainability.
Stroud noted that only 30 percent of family businesses make the generational transfer successfully; by the time a company has passed to the fourth generation, its success rate drops to 4 percent. Stroud said the company research showed that if 55 percent of family-owned manufacturing companies in Arkansas were unable to survive the passing of the company reins to the next generation, “that would result in a $2 billion tax loss to the state,” Stroud said. Since last year, CIS has worked with 22 businesses, “so we are just coming out of beta [testing],” Stroud said, and know there is an “appetite” for what her company can do.
Stroud wants CIS in the Little Rock Technology Park because “the energy here is something you won’t find in any other office space,” providing access to mentoring from the Venture Center and collaborations with other new companies.
Maf Sonko, a native of Gambia, came to Little Rock last year as part of the Fintech program at the Venture Center, a partnership with the financial technology firm FIS. His company, LumoXchange, which will launch this summer, provides expats and immigrants a way to maximize money sent back home. “It’s like Expedia for exchange rates,” Sonko said. LumoXchange is partnering with banks to provide their exchange rates, locations and other information on the LumoXchange website and allows direct transfers.
Jake Stanley, developer of Kiza Solutions, works with small businesses that need software to help them grow. Stanley, who moved to Little Rock from Dallas to work with Westrock Coffee, “stumbled into this place,” he said of the Tech Park. “The alternative is to work from home or buy another office space, and from my experience, that’s just not as stimulating as being around other people doing similar work.” Stanley is also the founder of Coordinates, which works with coffee industry exporters and importers.
Ritter Communications of Jonesboro was one of the first tenants in the Tech Park; it has signed a five-year lease for its satellite office on the fifth floor of the main building. The other long-term tenant is the Arkansas School for Mathematics, Sciences & the Arts, which is leasing space for its Coding Arkansas’ Future science education courses in the adjoining building (formerly the Mays Law Firm).
The remainder of the space dedicated to established tech companies is wide open. But director Birch isn’t worried that the park won’t soon attract those longer-term tenants needed for guaranteed revenues to retire the debt on the park’s loans, which total $17 million. “They’ll come,” he said. “They’ll come along.”
The park, which is overseen by an authority made up of representatives from the sponsors (the city and the University of Arkansas for Medical Sciences and the University of Arkansas at Little Rock) and the chamber, paid $12.6 million for properties in the 400 block of Main, including 5 Main Place (the Exchange Building), which it leases to the state Department of Higher Education; 415 and 417 Main St.; the parking lot on the west side of the block; a smaller parking lot behind the Tech Park; and an undeveloped lot at the northeast corner of Fourth and Main streets. It has spent just under $7 million renovating 417 Main St., bringing the total cost of the project so far to $24 million.
Revenues from leases in the main building since the tech park’s March 1 opening are coming in on average higher than expected for the first year: around $18,000 a month, compared to the $14,080 budgeted. But, as Tech Park Authority member Dickson Flake said, startup leases are not “money you can take to the bank,” because of the short-term nature of the tenants. The park is relying on rental income from the Department of Higher Education for the Exchange Building (also known as 5 Main Place, previously owned by Warren Stephens), $63,000 a month, in paying off the loans.
Originally planned as a place where universities would commercialize medical and other research, the Tech Park’s purpose has evolved in response to the “urgent need” for office space for the “startup entrepreneurial scene,” Birch said.
“What should be stressed,” Birch said, “is how important this is to Little Rock beyond the tech industry. A lot of times, when I do public speaking, most people don’t fully grasp why we need this.”
What the Tech Park will do, Birch said, is keep the students educated in technology and coding — which Governor Hutchinson has made a priority — in Little Rock. “If we don’t have opportunities for them, they’re going to leave, and if they do, that leaves a big gaping hole” in the city’s economy. “If we don’t make the right effort in trying to foster our tech community, [tech] companies will go to Dallas, Nashville, St. Louis.”
The next hurdle for the park, Birch said, “is convincing the banks … to get behind some companies.”
Phase 2 of the Tech Park — new construction at the corner of Fourth and Main — will require private capital, Birch and Flake said. Originally envisioned as laboratory space for UAMS’ Bioventures, the new building will be constructed as office space with the capability on the top floor to convert to lab space, which requires special ventilation and other mechanical needs. Kevin Zaffaroni, chairman of the Tech Park Authority board, said the board has gotten guidance from Bioventures head and park board member Nancy Gray on that count. Bioventures has laboratory space available now that it did not have several years ago when the board was created and began to plan for the Tech Park.
“Our next step will be to allocate a modest amount of funds to work with a professional to develop a vision for Phase 2,” Flake said. “I would like to think that we would be starting Phase 2 planning — I mean beyond illustrations and concept — by mid-2018.”