story by Ryan Saylor
Editor's note: Story updated with comments from Fort Smith Regional Chamber of Commerce President and CEO Tim Allen.
The proposed Arkansas College of Osteopathic Medicine announced the formation of an atypical construction management partnership at the Fort Smith Regional Chamber of Commerce's First Friday Breakfast this morning (Sept. 5).
According to Kyle Parker, president and CEO of the Arkansas Colleges of Health Education, Beshears Construction and Nabholz Construction in Fort Smith brought strengths to the table when applying for the construction manager position.
"But individually, they would not have won the bid," he said, adding that Beshears had expertise in construction of educational facilities while Nabholz is ranked 22nd in the United States for healthcare facility construction.
"They've done over $1.5 billion alone in the last five years in healthcare building," Parker said of Nabholz.
Nabholz will manage all of the pre-construction work, pricing and implementation of energy efficiency standards before construction, Parker said.
In the area of energy efficiency, Parker said the new osteopathic school — which will be housed in a three story, 100,000-square-foot building valued at more than $31 million in Chaffee Crossing — would include many energy efficiency features unique to the medical school. Parker is familiar with energy efficiencies, having worked with officials at the University of Arkansas at Fort Smith to save more than $1.4 million per year in energy savings through his work as the university's former vice chancellor of operations.
Working with Nabholz and Beshears, Parker said he knew the right energy questions to ask and was able to work with the companies to get amenities such as darkened skylights, a specially-designed roof that is cooler than typical as well as the college having its own wells dug on site to water lawns and provide some of the school's water needs versus having to tap the city of Fort Smith's water supply for all of its needs.
The companies themselves expressed excitement about the unique construction management arrangement for the project.
"We are so very excited to be working with the college and the community on this project," said Travis Beshears, executive vice president of Beshears Construction. "Not only does it represent keeping the construction responsibility local, but it's the first time we've had the opportunity to partner with another local group on something of this scale."
Rob Dodd, senior project manager at Nabholz, said the company was excited to be a part of "something so special and important to the region."
"Combining the talent and resources of both our firm and Beshears will mean the college will get unprecedented focus and quality for the project. As a lifelong resident of Fort Smith, I am thrilled to have the opportunity to be involved in a project that promises to have such a positive impact on the community."
Parker said using the two companies allowed the ACHE to keep management local and pump money back into the local economy while advancing the school from a proposed concept to reality.
"Our team is very pleased that both Beshears and Nabholz could be a part of this effort," he said. "From the very beginning, our Board of Trustees had a goal of trying to keep as much of the work local as possible. This is a significant step in that direction."
MORE MONEY SUPPORT
In addition to announcing the construction management partnership on Friday, Parker also announced funding from the federal Economy Development Agency in the amount of $1.2 million which he said would be used to expand Chad Colley Boulevard in front of the medical school, as well as construct a new road into the school's site.
Parker also broke news of a $200,000 gift to the school from the Fort Smith Regional Chamber of Commerce, bringing total donations and other funding committed in some form to the proposed school up to $106.9 million, according to figures included in Parker’s presentation on Friday.
The largest amount of funding — $60 million — came from the Degen Foundation, while an additional $14 million came from an anonymous donor. The Fort Chaffee Redevelopment Authority donated the land valued at $5 million while the city of Fort Smith has committed to infrastructure and other improvements in and around the site of the school at a cost of $1.5 million.
Additionally, Parker said a “local financial institution” has offered to loan the school $25 million at an interest rate below the market rate.
"That puts us at $107 million (of access to working capital)," Parker said, adding that while the school did not require a loan for operations, it would "be crazy" to not take the offer of credit at such a low rate.
All of the donations, community support and the offer of below-market lending, he said, is overwhelming.
"I mean it straight up — I've been overwhelmed with the generosity of the community involvement," Parker said.
And it is more than just monetary contributions from the community, but also time the community is putting in. Parker announced the addition of four local doctors to the ACHE Board of Trustees including Drs. Cole Goodman, Chris Greer, Esther Tompkins and Jim Zini. The four join Chair John Taylor, Vice Chair David Craig, Secretary/Treasurer Ronnie Hawkins, Jeff Beauchamp, Dr. Judy Boreham, Dr. Benny Gooden, Jim Patridge, Karen Pharis and Mike Rappeport on the Board.
MOVING THE NEEDLE
Fort Smith Regional Chamber of Commerce President and CEO Tim Allen said the financial show of support was an easy decision.
"There's never a magic formula on our participation. We sat down with Kyle and his team and said, 'Look, there's a lot of people already participating. What can we do?' So, we sat down and we identified some capital expenditures within the building and on the property,” Allen said. “And so the Chamber, we have limited funds like most chambers do, but we just felt there was enough passion behind this thing to say, 'Hey, look, we've got to be a part of it. Let's drive it home.'"
In order to receive the full funding, Allen said the school would have to meet certain unspecified contractual deadlines for construction and other aspects of getting the school operational. Once obligations are met, funding would be released to the school, he said.
Allen said the deal will “move the needle” in terms of economic impact for the region.
"For me, the school is awesome in itself. But you heard the residency story and 70% of the people who go through the school, they're here for such a very long time and they end up usually staying in the community. (It is) good for real estate agents and the ripple effect through the community of the selling of houses, the leasing of apartments. I mean, it really is the type of project that actually moves the needle in a community for a very long time. A $100 million impact … it just doesn't get any better than that, right? It's awesome."
CONSTRUCTION, ACCREDITATION TIMETABLE
The news kept coming from Parker Friday, announcing in addition to the construction managers, funding for the school and the new board members that bids would be put out later Friday for pad work for the school, with the hope of awarding the bids by Sept. 15 and getting bulldozers on site to complete the pad site before letting the bid on the initial more than $31 million in building, parking and other facility construction.
The plan, he said, was to have construction complete by April 2016 so the first cohort of students could begin classes by that fall.
While plans are advancing to get the school from concept to reality at Chaffee Crossing, plans are also advancing to get the school from concept to reality academically, as well.
Parker said reserves have been established in compliance with the Commission on Osteopathic College Accreditation (COCA), and that applications had been put in for accreditation with the commission for accreditation. He said ACHE expects to hear back from COCA in the next 15-30 days regarding an on-site visit, with an expected Dec. 2 pre-accreditation hearing to follow.
"At that point, at pre-accreditation, we have to have under contract our associate deans and there are three associate deans that have to be under contract. Of which, we have all three of them. We're going to announce that closer to the end of December because they're under contract right now and they're not here in Arkansas. We're bringing them all in (from around the nation)," he said.
The school also established more than 200 slots for residencies for its students. Parker said recruiting of students for the first 150-student class scheduled to begin in fall 2016 could begin once the school receives provisional accreditation, which is expected as soon as April 2015.