BCEDC opted not to keep taxpayer paid for spec building with knowledge that prison was not going to use the building

The BCEDC's decision to not keep a taxpayer paid for $450,000 spec building now under scrutiny.  Pictured here recently was the building in the process of being removed.

The BCEDC was aware prior to the transfer of ownership to a for-profit prison company, that the spec building, formerly located in the Warren Industrial Park, which was paid for by the taxpayers of the citizens of Warren at a cost of almost half a million dollars, was not going to be used by the prison company, yet the BCEDC still made the decision not to remove the structure for future use, a decision that is now under scrutiny.

During a July BCEDC meeting, it was announced that LaSalle Corrections, a private for-profit corrections company that is set to build a private-prison in the Warren Industrial Park, was in the process of preparing the site for construction, and the spec building which was on the site was being removed by the company.

The spec building was a 40,000 square foot facility that could have potentially been used by any industry which might settle in Warren.  Prior to the BCEDC giving the land to LaSalle at no cost(subject to the prison staying in operation for 15 years), the company had already determined that the spec building would not be used, according to BCEDC Board President Dr. Bob Smalling.

According to the BCEDC, once the land and the building were in the hands of LaSalle, they commissioned a local business to remove the structure in exchange for the building materials, which can be reassembled.  No information is known about what the local business plans to do with the building.

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Since that July meeting, however, questions have been asked as to whether or not the BCEDC knew what LaSalle's plans were for the structure before turning over the land and the building to the private company?

The answer to that question is yes according to Smalling, the board was aware that LaSalle had no use for the building.

That then begs the question, why did the BCEDC not have the structure taken down and either stored for future use or move it to another industrial speculation site, which could potentially be used to entice another industry to Warren in the future?

Again, the spec building was built using taxpayer money.  It cost around $450,000 at the time of construction and was paid for using city sales tax funds.

The building was in the name of the BCEDC because the original financing provided by the Arkansas Finance Development Authority legally required the loan to be granted to the BCEDC rather than the City.  The City was the sole funding source for the building, so in effect, Warren taxpayer money paid entirely for the building.

Both the land and the spec building were given to LaSalle by the BCEDC at no cost(subject to the prison staying in operation for 15 years) to help entice the prison company to locate their newest facility in Warren.  In total, the BCEDC gave LaSalle both the 40,000 square foot spec building, as well as the vacant land in the Industrial Park for the prison.

When asked why the BCEDC did not remove the building themselves prior to the transfer of ownership to LaSalle, Smalling told salineriverchronicle.com that the BCEDC did not have time to remove the building because the company was ready to move forward with construction of the prison.

Even with LaSalle's time crunch factored in, the private company itself was able to have the spec building removed.  It was reported in the July BCEDC meeting that LaSalle gave the building away for it to be taken down and removed from the site.

Council member Dorothy Henderson questioned the BCEDC's decision-making process during Warren's August 2020 City Council meeting, noting that she had received calls from constituents in regards to the citizens' nearly half a million dollar investment being given away.  According to Warren Mayor Denisa Pennington, who said she was present at several of the BCEDC meetings during which the issue was discussed prior to the transfer of ownership of the property to LaSalle, the BCEDC did hold discussions "in detail" about "ways to remove and reconstruct to another site for future use the spec building."  It appears another reason for the choice not to remove the spec building was the cost of having to remove the building.  "The quote to remove it was $120,000, reconstruction was $120,000, and anywhere from $40,000 to $60,000, an extra amount, for footings to reconstruct it on another site or even store it somewhere," Mayor Pennington said.  The "BCEDC did not have that type of money," she continued.  She went on to say that several private businesses entertained the idea of purchasing the building from the BCEDC, with the money going back to the BCEDC, but due to the high cost, no business would make the purchase.

In the end, the BCEDC chose to take no action on the spec building.  Instead, ownership of the building transferred to LaSalle along with the property.

The details of the private transaction between LaSalle and the local business which dismantled the building are not known. LaSalle, once in ownership of the property and the building had every right to make whatever deal it wished to remove the spec building from the site.

However, the reasons behind why the BCEDC did not take action to remove the structure and either store it for future use or relocate it to a different industrial site remain under scrutiny.

Another option would have been for the BCEDC to allow the City of Warren to dismantle the 40,000 square foot structure and keep it for future use by the City.  Sources tell us however that the Warren City Council was completely unaware that LaSalle had no intention of using the building, and furthermore the BCEDC never approached the Council to see if the City of Warren might like to remove and keep the structure before LaSalle took control of the property.

It's important to note that the Warren City Council at no point had any decision making authority over the spec building.  That solely rested with the BCEDC.  Although it was paid for by taxpayer money, the BCEDC built it and owned it prior to LaSalle.

Either way, the taxpayers of the City of Warren paid approximately $450,000 for a building which has now been given away at no cost.