LR to pay year of tech park rent

Tax funds’ use questioned, $95,616 to come from city pot

Correction: Ward 1 City Director Erma Hendrix told At-large Director Joan Adcock to hurry up while Adcock was questioning a resolution at Tuesday night’s board meeting. This article incorrectly attributed Hendrix’s comments to Vice Mayor and Ward 6 Director Doris Wright.

The Little Rock Technology Park Authority Board can move forward with temporarily leasing downtown space until it decides on a permanent location now that the city's Board of Directors has agreed to pay the first year's rent.

The city board approved the allocation of $95,616 to the authority Tuesday night. The money will pay for one year's rent of about 8,000 square feet at the Block 2 Lofts on East Markham Street, where the tech park will be based and its executive director will work until the authority decides on permanent property along Main Street.

The original request before the board was to take the rent money out of the $22 million in sales-tax revenue that the board previously said it would spend toward development of the park. When voters approved the sales-tax increase in 2011, the portion from which the $22 million was to be taken was dedicated for capital improvements.

After several city directors questioned the legality of using tax money earmarked for capital improvements to pay for rent, City Manager Bruce Moore proposed using other funds. The resolution that passed Tuesday states that the money will come from the city's general fund. Moore said he will update the board about where he will pull the money from at a later time.

Little Rock Regional Chamber of Commerce President Jay Chesshir, who is also a member of the Tech Park Authority Board, spoke before city directors Tuesday and had with him several entrepreneurs who will benefit from the tech park.

"I wanted you to see what the face of entrepreneurship looks like in Little Rock and what is already happening and what we want to utilize this space we are talking about here tonight to push even further," Chesshir said.

He fielded several questions from At-large City Director Joan Adcock, who said she felt like too much time had passed before city directors were given information on the tech park board's plans.

Chesshir told the city board that for the remainder of this year, the temporary space the authority will lease will be used for ARK Challenge -- an accelerator that mentors startup companies by giving them $20,000 to begin with and then chooses two at the end of the 14-week challenge to receive $150,000 to make their businesses a reality, thus creating jobs in Little Rock.

After using the space for two years, the authority plans to have property along Main Street ready as the park's permanent location, and the Arkansas Venture Center will provide programs there.

Later this month, Chesshir said, a partnership between the Arkansas Venture Center and the Nashville Entrepreneur Center in Tennessee will be announced. The Nashville center has launched 100 companies that have employed 1,050 people in the Nashville area in the past four years, Chesshir said. In that time, those companies have raised $33 million in seed money and other investments, he added.

Adcock wanted to know why the city was being asked for the rent money instead of the other partners in the tech park -- the University of Arkansas at Little Rock, the University of Arkansas for Medical Sciences and Arkansas Children's Hospital. Each partner, including the city, has pledged $125,000 in startup costs for the tech park. All but $300,000 of those pledges has been used.

Chesshir said those funds will be used for operation costs for the next two years -- including utilities, maintenance and salary, and travel and marketing for an executive director. Including rent, that cost is estimated at more than $530,000. The Tech Park Authority Board hopes that by leasing out the space to accelerators like ARK Challenge and future startups, it will have the funds to pay for the second year's rent.

At one point during a second round of questioning, Vice Mayor and Ward 6 City Director Doris Wright told Adcock to hurry up after saying that she was ready for the already two-hour meeting to end. City Directors Erma Hendrix and Dean Kumpuris also had indicated their readiness to vote on the topic.

"No ma'am, I will not hurry," Adcock said in response to Wright's comment. "I'm doing the people's business and I will take my time. ... I don't believe in rushing."

In response to Adcock's hesitance for the city to provide the rent funds, Kumpuris said it's an upfront investment that will benefit the community in the future when the companies get started and build their businesses in Little Rock.

"If we don't do this, these young people are going to go to Nashville or New York City or Charlotte or someplace else," Kumpuris said. "So either we make it easy and fun and a great place for them to come or they are going to get the hell out of here. And that's the truth. We just better start realizing that's our future right there. If you don't put the money up to start that future, then we are doomed to failure in this city."

The resolution to allocate the rent funds passed unanimously. The Tech Park Authority Board plans to enter into a five-year lease for the space, with an option to end the lease at the end of two years if it has acquired permanent space by then.

Metro on 05/07/2014

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