Chip Off the Old Blocks
Talking downtown development with newly formed Rock Capital Real Estate
When the Sterling Department Store at the corner of Capitol Avenue and Center Street closed in 2005, it ended a legacy that had stretched just shy of 80 years. Had you asked longtime residents and workers in downtown Little Rock about the place, it’s likely they would have recalled the place and its wares fondly. There, within walking distance of many office buildings, could be had a bag of fresh popcorn, the scent of which filled the store. Yarnell’s ice cream was available by the scoop, one flavor being White House, vanilla mixed with maraschino cherries. Many kinds of candy filled the shelves. A shopper could also buy, for the kids, balsa-wood airplanes, toys that floated on the air and made great stocking stuffers.
Sterling has now been closed for many years, but there’s hope for the renovated building and two others in the 200 block of West Capitol. Rock Capital Real Estate, a new firm formed in February, now holds control of the Sterling building—in addition to the Hall and Davidson buildings, both of which are on the National Register of Historic Places. Led by a four-member management team consisting of Dan Roda, Danny Brickey, Jordan Haas and Blake Smith, the company is a combination of Rock Capital Group and Capital Real Estate & Trust. Although details are still being firmed up, plans for the buildings include a boutique hotel, bars, a restaurant and meeting spaces. Roda, general counsel of the new enterprise, spoke with us about downtown’s future, and was joined by Haas.
How did four young men form a new real-estate development company?
Roda: We all started out as friends. That’s one of the best things about it. I come to work every day and work with my friends. We all have common interests and mutually beneficial skills and experience in the real estate industry. Our group came together over different periods of time. To me, it seems somewhat like fate. I first moved to Little Rock nearly a decade ago. Blake was one of my first friends, later a client and, later still, a business partner. We formed Rock Capital Group in 2014 and, this year, merged with Jordan’s company. There are a dozen of us now working on some very exciting projects.
What are the plans for the Hall and Davidson buildings on Capitol Avenue, and for the adjacent Sterling building, where generations of downtown workers once shopped?
Roda: I wish I could tell you more right now. Obviously, there’s been some reporting about our hotel project in the works for Hall and Davidson. It’s on track and really fun to work on, but there’s not too much more that I can say right now. Same with the Sterling building. It’s been fun to see that renovation come to life. Since we’ve started work on both these projects, we’ve been approached by many people who have cool stories and memories. I’ve talked to guys who worked on the trading floor at Crews and Associates, which, come to find out, was on the top floor of the Hall building. Apparently, they would walk out and go down the street to the Sterling building to get a hot dog for lunch. So that block has such great history.
We’re fortunate here in Arkansas that our state has a strong historic-preservation program. They’ve recently increased the rehabilitation tax credit, and I’m hoping we see a lot more people pour love and capital into more of our city’s historic buildings, because they need both. (Editor’s note: As were going to press on this month’s issue, we asked Roda for an update: “Our development group has closed on its acquisition of the buildings,” he said in an email, “and we expect to be making an announcement about brand within the next few weeks.”)
Your company essentially controls an entire city block bounded by Capitol, Center, Sixth and Louisiana. What’s the advantage to having the whole block?
Roda: That specific block is in a really crucial location downtown. We view it as a connector piece between all of the city’s efforts to revitalize the creative corridor, including the new tech-park project. We’re kind of a connector between that and what’s being called the financial corridor, the stretch along Capitol Avenue containing most of our tall office buildings in the city and the federal courthouse complex. This block sits right in the middle of that and makes it an ideal home for amenities that serve both of those populations and the new creative population coming into Main Street. That makes it a great fit for our hotel project, restaurants, offices, and other retail and service uses. We think we’re really well-situated to be right in the middle of downtown’s renaissance.
Have you signed with a hotel company yet? If not, what are you looking for?
Roda: Something really cool and exciting. I wish I could say more because it’s really fun to work on, but that’s all I can say right now.
What does Rock Capital see in downtown’s immediate—five-year—future?
Roda: I think we’d be happy seeing the same momentum continue.
Haas: I feel like there’s a major residential push downtown. A lot of people want to live downtown, and that’s the cornerstone of the movement. People already go out at night downtown and have consistently worked downtown, but the fact is, people want to live downtown, and that may have started with the Governor’s Mansion area. And of course, Moses Tucker [Real Estate] is working on several projects. I think that will be the foundation of the revitalization—people actually living downtown.
Roda: It’s a chicken and egg thing. You need the people, and I think our city is doing right things to make that happen by encouraging more capital investment to come downtown.
Haas: It comes down to desire, too, with people wanting to buy into that, and I think by and large, they absolutely do. You can’t build it fast enough for people to live. Some of the stuff is high-end, and that might be an exception.
Roda: Just about every market-rate apartment project that has come online downtown in the past several years has filled up very quickly. I don’t know a whole lot of other business where you want your competitors to be successful, but that’s what we want to see here. Jordan and I practice what we preach, too. We both live in historic houses in the Governor’s Mansion Historic District. We’re all in. One of our other partners is also in the process of rehabbing a beautiful home downtown.
How about the past five years?
Roda: Everything’s slower here, but I think the momentum will continue. Little Rock never saw a great big boom in property values prior to the 2008 crash, so it’s to our benefit that growth has been slow and steady. All signs continue to point to good things. There are long-term investments being made in job creation, creative arts and, especially, in parks and recreation. I think we have all the pieces in place for growth to continue for quite some time.
What are the obstacles to further development downtown?
Haas: The prices for which we could’ve acquired property five years ago and today are vastly different. Say three, four, five times more for an abandoned property. We’re already getting to a point where economic development is becoming harder to do because of the surging prices.
Roda: We need to deliver an affordable product that is still very good.
Haas: Walkability of downtown is still very poor. People generally feel safe in the River Market area, and Main Street is picking up, but you don’t see people at night in downtown Little Rock in most areas.
Roda: That certainly correlates with both actual crime and the perception of crime. We’re trying to sell downtown to potential residents and potential business owners and potential travelers, and as that perception persists, it makes our job more difficult.
Haas: Downtown is the only place that has vagrants that I know of.
What are the motivators for further development downtown?
Roda: As more people are drawn to downtown, whether in apartments or hotels, they need more places to eat or shop. It’s often said in planning and development circles that the first wave will bring the people in, and the second wave will bring in the ancillary services to support those people. As more bodies come downtown, there will be more and more restaurants, bars and shops and other amenities. All the people who are moving downtown—it’s their desire to have all that stuff within walking distance. The holy grail is getting a nice grocery store downtown. When you see a really nice full-service grocery store downtown, that’s when you’ll know the downtown Little Rock renaissance has truly made it.
I think you’re seeing two generational pushes back toward urban living. You have the younger generation, which came out of college just in time to get screwed by the Great Recession and can’t afford or don’t want to tie up the equity in a home and need to be mobile because the job market requires that sort of mobility. So you’ve got those people wanting to rent, and a lot of those people want to be in an urban environment. It’s fun and cool and promotes a more active, sustainable lifestyle. I think you’ll also see more and more of a push from retirees as they lose mobility or don’t want to spend any more of their lives in traffic. A walkable community does a lot for people. There are cognitive benefits to getting out, walking around and interacting with other people. The downtown environment, a lot of people say, keeps them young.
Rock Capital Real Estate is part of a generational change in the development of downtown. Tell me about that.
Roda: Absolutely, we are. And we’re happy to be part of it. We want to be involved in building the communities in which we’ll be living. We all love our city and are happy to work on projects that make it even cooler.
Haas: A lot of what we do as developers is preserve history and also be conscious of sustainability. When you get to work in something you’re passionate about, it’s a fun experience. Our generation is interested in sustainability, and our entire focus is on historical buildings, and we really enjoy that space.
Roda: I think we’re also seeing more people in our generation interested in investing in real estate on a personal level. We’ve seen multiple stock-market crashes, just in our short lifetime. People in our age group have every reason to be distrustful of a financial system where a lot of whether you make or lose money on an investment happens in a room far, far away. People want to put their money into something they can look at and touch and see and watch it come to life and observe the impact it has on their very own hometown.