Developers to make pitch to NLR panel for riverfront land

A development opportunity is in the works for city-owned property along the Arkansas River in North Little Rock that city officials have envisioned for years as a viable spot for riverfront residences.

The North Little Rock City Council today will hear a presentation for a proposal to sell 5.8 acres at 632 W. Riverfront Drive, commonly referred to as the Smarthouse Way property. The former industrial site is just west of the Dickey-Stephens Park baseball stadium and the Broadway Bridge.

If approved, H3RE LLC, a group under J. Fletcher Hanson III, will have the rights to buy the property for $2.53 million from the North Little Rock Public Building Authority. Hanson is the chief executive officer of Newmark Grubb Arkansas, which is also the firm listing the property for a sale price of $3.2 million.

The city has had the property for sale since 2005. The property was awarded an Environmental Protection Agency Brownfields cleanup grant that year to clear it of contaminated soil. A brownfield is property that was contaminated by former industrial, agricultural or commercial operations.

The proposal allows a year for a contingency to obtain financing, with options for two six-month extensions. Each extension would carry a cost of $25,000 in earnest money.

The city had already agreed that the property will be leased as a construction staging area for the Broadway Bridge reconstruction that is supposed to begin next year. That lease will stay in effect, North Little Rock Mayor Joe Smith said.

"It's more of an option to buy," Smith said of the proposal with Hanson's group. "With the construction company leasing it, we thought it would be an opportunity for us to market the property for future use.

"These developers have brought an idea to us that they will work with the parent companies to put a package together that would possibly coincide with the bridge construction and if they wanted to start a Phase One before the bridge construction is complete, we've gotten the contractor to agree to move, not off of the property, but off of the western side of the property so a development could start a Phase One on that side of it while bridge construction is still going on."

Hanson said in an email late last week about the proposed sale that his company's interest is "in response to the growing demand and support for the downtown area." Council legislation states that development will be for "commercial and/or residential" use.

"We appreciate the opportunity to work with the city of North Little Rock and feel the Smarthouse Way property is an amazing opportunity to create something special in the downtown area utilizing local investors, along with regional and national resources through our brokerage company Newmark Grubb Arkansas and national strategic partner Newmark Grubb Knight Frank," Hanson said.

"It's critical we get it right the first time and assemble multiple uses on the property that benefits the entire downtown core and creates a dynamic sense of place for North Little Rock and central Arkansas as a whole," he added. "We are currently in preliminary development stages conceptually, with more to come as we determine and underwrite proposed uses."

It was the national connections of Hanson's group and developers, financial partners and real estate that Smith said most appealed to him about the proposal.

"It's a good company, a nationwide company," Smith said. "I thought it would be a great opportunity for them to have exclusive rights to the property for the year to try to put that package together."

In 2005, a development for a pair of high-rise condominiums and an adjacent marina was proposed for the Smarthouse Way site, but that fell through because of a delay in the removal of power lines from the property. The North Little Rock Public Building Authority oversaw $1.3 million in bonds issued in 2008 to relocate those power lines, a task completed in 2011. The Public Building Authority has the ability to borrow money for longer terms than local governments are allowed.

The city announced after the power line removal that it would more aggressively market the property, but development proposals hadn't materialized as the nation's economy was recovering from the recession of 2008-09, Smith said.

"I think it's just taken five or six years for people who do this type of development to feel confident enough in the economy to make an investment," Smith said.

Metro on 12/22/2014

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