Donaghey deal nixed | Arkansas Blog

Donaghey deal nixed

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The people who hoping to turn the Donaghey Building into condos and commercial space won't be buying the Metrocentre parking deck across Seventh Street from the Main Street landmark.

The city placed too many conditions on the $2 million sale, said developer Stephanie Smith. The deal was on the City Board agenda last night, but wasn't considered. City Manager Bruce Moore announced, however, that the city -- if it agreed to a sale of the deck -- would insist on an 18-month period for the developer to have all the necessary permits in place and a 24-month completion timetable after that, plus a guarantee that the bottom floor of the deck  Donaghey Building would be used for commercial and retail.

Smith said these timetables might have been possible, but "you never know" about unexpected glitches. She said the restrictions could have complicated financing.

So now there's an alternative plan. Sharon Priest, director of the Downtown Partnership, which operates the deck for the Metrocentre Improvement District, proposed to lease the developers 180 spaces in the deck. Smith said her lender would accept that in lieu of parking deck ownership. She'll have to rework her financial plan, but says she intends to proceed and hopes to have the money in hand and construction underway by the end of November or December.

"I'm not giving up," Smith said.

City Attorney Tom Carpenter had raised questions about Metrocentre's sale of the deck because the city had some $500,000 invested and, contractually, could have claimed more in a sale. The deck has never operated profitably and Priest had hoped the sale could retired bond debt early and free improvement district tax money for other downtown improvements.

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