The Conway City Council will meet Tuesday to revisit the issue of relocating City Hall, focusing again on 824 Front Street after initial negotiations for the site fell through three weeks ago.

The property (American Management Corporation building) was the first choice of the city for a new city hall, Mayor Bart Castleberry told the Log Cabin Democrat on July 2. But because owner Steve Strange pulled the offer off the table, Castleberry said, the city would have to consider a new building on property it currently owns.

During the council’s regular meeting June 12, it approved a Memorandum of Understanding (MOU) leasing the current facility at 1201 W. Oak St. to Conway Corporation for the company’s Arnold Innovation Center.

Under the MOU, the city will relocate within 18 months. Currently, 27 city employees work in City Hall. The city will also provide Conway Corp full access to the property within 30 days of relocating. Conway Corp will pay the city $1.05 million for use of the property during the term of the agreement, which ends Dec. 31, 2070, unless both parties choose to renew or terminate it.

The city called a special meeting for June 19 to discuss options. At that meeting, aldermen told Castleberry to focus on two properties the city already owns.

On June 26, the council voted in favor of using the city-owned parking lot along Parkway Street to build a new city hall. Alderman Andy Hawkins voted against it but declined to expand on why.

Over the week following the council’s decision to examine a new building, local business owners began chatter on social media and sent emails to the Log Cabin and others about the potential loss of a parking lot on Parkway Street that was renovated last year at a cost of more than $160,000.

“After the city council meeting [June 26], there seemed to be a lot of interest from the downtown merchants,” Castleberry said. “I met with three downtown business owners [early this week] and asked them ‘What if I go back and revisit the American Management Building?’ and they all thought that was a good idea.”

On July 2, Castleberry met with the real estate agent who now represents Steve Strange on behalf of the Front Street property.

“I asked if there was a possibility we could renegotiate,” Castleberry said. “We’ve come back to the table for $2.9 million that will include parking, and that is what I am taking to the council on Tuesday.”

According to information obtained by the Freedom of Information Act on behalf of the Log Cabin Democrat, a letter of intent to sell was drafted by the building’s owner Steve Strange on Feb. 28.

The letter, on Lafayette Commercial Properties, LLC. letterhead and signed by Strange, included a property description stating: “The property also includes a parking lot located directly behind the building.”

The asking price for all, also defined in the letter, was $1.85 million ($66.71 per square foot).

Following the intent to sell, the city conducted an inspection of the property and made preliminary plans to proceed with the purchase — actions needed to present the proposal to council members on June 12.

Strange told the Log Cabin in a phone interview on Friday the preliminary discussions on the Front Street property were prior to the building being on the market for sale. He also said the parking lot inclusion in the purchase was a source of contention on the city’s part and “probably led to some miscommunication” over whether it would be included in any final plans.

The intent letter included a clause, advising, “... this letter is not contractually binding on either party and is only an expression of the basic terms to be incorporated in a formal written agreement if the parties so choose.”

“[The city] wanted the back parking lot,” Strange said. “I told them, ‘I can’t sell it to you.’ But I did tell them I would give them option of first refusal if I ever did intend to sell it. Basically, the lot was not for sale at the time.”

Strange confirmed talks between him and the city ceased immediately prior to the council’s decision to examine properties it owns on Parkway.

Ultimately, Strange said, the potential deal was pulled off the table when negotiations over the parking lot behind the building, located on Chestnut Street, stymied the conversation. The property then went up for sale officially with the market price of $2.9 million.

“The price currently is what [the building and parking lot] was appraised at,” Strange said. “Not a penny more. Not a penny more. And that includes the parking lot — that’s the lot, the building and the commissions for the Realtors.”

In going back to the table with Strange, the city is looking at a deal spending another $1 million from the original asking price for the inclusion of a parking lot.

According both to Castleberry and Strange, the parking lot was appraised for $98,000. Regardless, Strange said, the new market-value price is the current offer.

“The difference is a reduced price I offered in the beginning so the city could move,” Strange told the Log Cabin. “Now that it is on the market, this is market value.”

“Looking forward, I am all for city hall being where it should be,” Strange said. “The building is a cornerstone of Conway.

“The importance should be on the history of our city and the building as a hallmark of our downtown.”

Downtown merchants are in an uproar over potentially losing parking spaces for public and business use, especially if the city opts to build on Parkway. Also to note, if the city approves the Front Street deal, the parking lot on Chestnut will be used for city employees and for public use.

At least one tenant in an adjoining building will have parking dedicated in that lot as well.

“I am going to give anyone who would like the opportunity to speak Tuesday,” Castleberry told the Log Cabin on Friday. “As of today, no one has asked to be on the agenda.”

Throughout the week ahead of Tuesday’s meeting, Castleberry and Chief of Staff Jack Bell met with business owners to discuss the sharing of information with downtown businesses. Bell is also the chairman of the Downtown Partnership board, and some business owners expressed to the Log Cabin and to Castleberry that Bell should have been responsible for informing them of Strange’s decision to pull the offer and told them of the utilization of the parking lot prior to the public city council meeting on June 12.

The Downtown Partnership is not a city board, unlike the Tree Board and the Bicycle & Pedestrian Advisory Board. It does not report to the city, but is a “nonprofit economic development organization focused on the promotion, planning and maintenance of an improved downtown Conway,” according to its Mission Statement.

In a meeting with the Log Cabin on Friday, Bell said he “should have done a better job” communicating with downtown businesses.

The city, in turn, has done its due diligence by posting all agendas and meeting minutes on its website and has notified the public in that manner each Friday before the meetings on Tuesdays. To date, no one from any business and no private resident has spoken for or against any decision voted on by council concerning this issue.

However, two local business owners have voiced their concerns in emails to the publisher of the Log Cabin.

“The creation of a new City Hall has awakened the beast as it were — making our merchants increasingly aware of the precarious position we all face if development continues without addressing the parking issue,” business owner Laine Berry wrote. “We all now see that one parking lot is only a bandaid that is covering a massive wound, and one which will be completely ineffective very soon.

“Even if City Hall doesn’t take that lot the parking there is still under threat: if even one large business comes into downtown and needs that parking we will be back in this same position. We all now realize that without the prioritization of a public parking facility [in] downtown we will soon be facing extinction from within. Conway’s beautiful downtown cannot continue to flourish without the city’s immediate attention to the parking needs.

“We all ask that our city planners take a step back, and take a broad look at what a threat the current situation poses to downtown, and what danger we face going forward. There is simply not another minute to lose in addressing what is the most pressing issue facing our downtown.”

On Monday, July 9, starting at 10 a.m., the Conway City Council will do a walkthrough of the 824 Front Street property and then the Federal Building at Front and Main.

The next city council meeting Tuesday begins at 6:30 p.m. in the Judge “Jack” Roberts District Court Building and is open to the public.