Mena (population: 5,534) has a rich history as the county seat of Polk County. Like many other rural communities, Mena once enjoyed a bustling and vibrant downtown, but in recent years has seen its population decrease, as graduating classes move onto the more urban areas in neighboring Arkansas and Oklahoma, leaving vacant buildings behind. One of the larger buildings sits on the main street, Mena Street, but is not a storefront.

The former Mena High School is approximately 60,000 square feet and has sat largely vacant for many years. In 2009, a tornado swept through downtown Mena, destroying a large swath of property, including the high school. Rather than rebuild, the community decided to build a new, modern high school outside of downtown, leaving this building empty. After a few years, local businessman Walter Deetz purchased the building with hopes of turning it into a new jail, as the current jail site at the county building was overflowing. However, community input and discussions determined that something else should populate this great building sitting in the center of downtown, preferably something that could become a catalytic project for Mena. This is where we began our work.

The reimagining of this property involved aligning all the public, non-profit, and private sectors who deal directly with tourism and economic development of the region with the need to grow, attract, and retain talent. The original visioning sessions for the building included everything from residential units to a brewery, retail operations, makers space, commercial kitchen, artist studios, co-work space and classrooms. We needed a developer/consultant to take this to the next level and brought in Greg Nabholz with Nabholz Properties Inc. to assist in developing a conceptual plan and preparing a financial analysis for an investor or investor group to acquire and redevelopment the property. A key part of this analysis is to determine the possible uses for the various portions of the building and what would be the source of the income for these various locations be to generate an adequate return to a potential investor. In addition, an analysis on the sustainability and financial viability of the entities that would be occupying the various locations in the building would need to be addressed on some level. This analysis will focus on how the property can be used on the most flexible basis and to accommodate different types of use that might even occupy the same space but at different times.

With the assistance of Rick Chrisman, the primary local point person for this project and a local restaurant owner, board member of the Mena Downtown Partners and a commissioner of the Mena Advertising & Promotion Committee; Bryan Hebert with MSBI Construction; and Amanda Threlkeld, the director of the EAST program at Mena High School, and her students. Market data, cost estimates, and plans were developed that incorporate the possible uses of the building and land.

There are 4 primary parts of the building:

Based on the conceptual cost estimates and the options for a variety of uses of this building, this project from an investor/developer standpoint is feasible, however, the financial model does rely heavily on the market demand for the 17 apartments and the successful implementation of a sizeable portion of the Innovation Hub which would lease a significant part of the 1^st floor.  Because of the unique nature and large size of this development, the following are key considerations that will require the private, non-profit, and public sector coming together help mitigate the risk thereby increasing the chance of the project’s success:

1. Acquisition Cost – Current ownership needs to be flexible on how a deal to acquire the property is structured. To maximize the price, taking an ownership interest by contributing part of the acquisition cost and/or a sale-leaseback for a 1 or 2 years for a portion of the building are just two ideas on how a creative strategy for the acquisition cost can be achieved.

2. Lease Guarantees – Having local institutions, companies, and/or individuals commit to leasing for at least 1 year a minimum of 10 of the 17 apartments. In addition, a commitment by UA Rich Mountain, Mena Chamber of Commerce, or other partner entity to lease a portion of the building for their direct use ahead of the final plans of the Innovation Hub will be an important consideration as well.

3. Bond Financing for Acquisition and Renovation Costs – With recent legislation and latitude cities, counties, and local economic development agencies now have with financing of private developments, this is an option that needs to be pursued. The building project financing could potentially be combined also with the financing of a substantial portion of the Innovation Hub that would leasing part of the building.

If embraced by all parties and implemented properly, this project not only will be a successful real estate development for the investors but more importantly a major catalytic economic development for the City of Mena and Polk County that creates, retains, and attract talent and will the cornerstone for insuring future growth and prosperity to the region.