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Hank Kelley, CEO of Flake and Kelley Commercial Real Estate

Hank Kelly

Listen to Learn:

  • The challenges of being a real estate agent
  • How to work your way up in the real estate business
  • how the real estate business has grown in the last 40 years
  • The 10 1/2 signs of a successful city
  • How embracing diversity expands your intelligence

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Hank Kelley grew up in Heber Springs, AR. He received his Bachelors of Business Administration from the University of Arkansas at Fayetteville where he graduated with honors. In the late 1970s he went to work in the northwest Arkansas real estate market and during that time met and married former Little Rock Mayor Jim Dailey’s sister, Stephanie Dailey. In 1980 they moved to central Arkansas and Kelley got his MBA in Finance and a Commercial Real Estate Brokerage License. He has instructed Real Estate courses at University of Arkansas at Little Rock and created the Endowed Scholarship to enable students to attend the U of A. Kelley is the CEO of Flake and Kelley Commercial Real Estate firm and over the past 35 years has represented clients that include AT&T, Panera Bread, McDonald’s, Starbucks, Acxiom, City of Little Rock Parks & Recreation and the Pulaski County School District.

Kerry McCoy and Amy Bramlett Turner

Up In Your Business is a Radio Show by FlagandBanner.com





[00:00:08] GM: Welcome to Up in Your Business with Kerry McCoy, a production of flagandbanner.com. Through storytelling and conversational interviews, this weekly radio show and podcast offers listeners an insider’s view into starting and running a business, the ups and downs of risk-taking and the commonalities of successful people. Connect with Kerry through her candid, often funny and informative weekly blog. There, you’ll read, learn and may comment about her life as a 21st century wife, mother, daughter and entrepreneur.


And now it’s time for Kerry McCoy to get all up in your business.




[00:00:41] KM: Thank you son, Gray. Before we start, I want to let you know, if you miss any part of today’s show or you want to hear it again or you want to share it, there’s a way, and son, Gray, will tell you how.


[00:00:54] GM: Listen to all UIYB past and present interviews by going to Up in Your Business with Kerry McCoy’s YouTube channel, flagandbanner.com’s website or subscribe to our podcast wherever you like to listen by searching Up in Your Business with Kerry McCoy. For timely notifications of upcoming guests, go to flagandbanner.com, click Radio Show and join the email list. Back to you, Kerry.


[00:01:16] KM: Thank you, Gray. My guest today is the well-known commercial real estate developer, Mr. Hank Kelley. For the past 35 years, Mr. Kelley has worn many hats as the CEO of Flake & Kelley Commercial Real Estate Firm in Downtown, Little Rock, Arkansas. After reading about Hank, I have the feeling he’s the kind of son we all want to have; ambitious, hardworking, loyal, honest, and community-minded.


Hank was born in Heber Springs and received his BA with honors, of course, from the University of Arkansas at Fayetteville. He followed in his father’s footsteps by working in commercial real estate, first in Northwest Arkansas before moving to Central Arkansas. While on the job, he met, fell in love and married the sister of the former mayor of Little Rock, Mr. Jim Dailey.


Today, Hank Kelley is paying it forward with his good words as president of the Downtown Little Rock Rotary Club 99. Under his leadership this year, Rotarians will partner with Dunbar Magnet Middle School’s Interact Club, a program teaching community service to young people through Rotarian mentorship. In addition, because of the club’s downtown location, Hank plans to work closely with Mayor Frank Scott on his mission of developing City Pride, the City Pride for Little Rock.


It is a pleasure to welcome to the table, commercial real estate aficionado and president of Rotary Club 99, Mr. Hank Kelley.


[00:02:48] HK: Thank you, Kerry. I appreciate that. I’m blushing a little bit, and at least half of it is true.


[00:02:53] KM: I may not know. This may be actually wrong. Your dad was in real estate, but was he in commercial real estate or was he in residential?


[00:03:00] HK: Well, in Heber Springs, you do any kind of real estate that you can do, and his experience was a combination of commercial real estate, but also doing lake lot development and selling homes that had lake views and vistas of the beautiful, beautiful Greers Ferry Lake area.


[00:03:18] KM: Did you grow up on the lake?


[00:03:19] HK: I did.


[00:03:20] KM: You’re a great skier?


[00:03:22] HK: I’m a decent skier. I’m a pretty good wakeboarder for a guy my age, and I was taught by my two sons, Jonathan, Nicholas; and my two daughters, Natalie and Grace who loved wakeboarding. So we would get out early in the mornings on Greers Ferry Lake when the water was like glass and we bought a boat that was a Ski Nautique boat that is made for wakeboarders. They had water ballast. It has water ballast in the back, so you fill those water ballast up, and it’s a tugboat. So it cuts a wake that’s large enough for my sons to jump and do flips and land. My daughters to jump both sides of the wake and for me to try and crash in between.


[00:04:10] KM: Head first. So your father is still alive.


[00:04:14] HK: He is.


[00:04:14] KM: You told me before the show. He’s 94.


[00:04:17] HK: He is. His birthday is this weekend, and my mother’s birthday is this weekend also. They’re two days apart, and I won’t give her age, but she’s just a couple years younger than my dad and is actually in great health and just a brilliant lady.


[00:04:36] KM: Congratulations. Your dad still come to work with you?


[00:04:39] HK: No. Dad doesn’t work anymore. He retired when he’s about my age. As a matter of fact, funny story, he said, “Hank, if I had known I was going to live to be 94, I might have worked a couple of extra years.” But he’s enjoyed his retirement and we are in touch, and this weekend I was there playing in the Red Apple four-ball with my high school friend, Brock Duckworth, and got to relieve some of our memories with my dad of playing golf. So that was a great time for us.


[00:05:08] KM: Your sun does work in the firm with you.


[00:05:10] HK: He does. His name is Nicholas Kelley. He’s 35. He’s an attorney.


[00:05:17] KM: An attorney?


[00:05:17] HK: He’s part of my job. Has been to utilize his talents and skills in a way to help our firm and help my clients and our clients now to be able to more efficiently move through real estate transactions. So having him and his legal acumen and abilities helps us move through a transaction maybe a little quicker than some of my competitors.


[00:05:45] KM: That seems like a great addition. I mentioned in the opening that you are the president of rotary and you grew up around the rotary pancake breakfast in Heber Springs.


[00:05:59] HK: That’s right.


[00:06:01] KM: Your father was –


[00:06:01] HK: Rotary in Heber Springs is a very important part of the community as it is in most communities, but they were active in our high school and they would show up and give awards for students that were doing things in the community or if they had a good week on the football field. They might recognize a player. They might recognize a student that was doing well. The pancake breakfasts were part of their tradition.


Dad would work as a volunteer and I would go and do whatever he would let me do to be part of that. That was an early introduction to seeing my dad do public service or service for the community and it stuck with me.


[00:06:46] KM: Because you were started at an early age with your father. Then in 1996, you were the president of another rotary club.


[00:06:55] HK: Right. My first rotary experience was with a great club, the West Little Rock Rotary Club. They meet on Wednesdays at the St. Vincent’s complex, and I work through several positions in that organization and ended up being the president in ’96. After that service, I got involved with a couple of other not for profits that really conflicted with the time that I had involved with the rotary club.


In those days, in rotary, attendance mattered. So if you were not able to be at the meetings a certain percentage at the time, they would not allow you to continue membership. I could tell from my other not for profit activities that I wasn’t going to able to attend with regularity that I needed to. So I took a sabbatical from rotary and then four or five years later I got back involved with rotary in the downtown club. A friend of mine invited me to be involved with that club and it was very convenient, because I could walk from my office to the DoubleTree at that time, Camelot, and it was a very nice experience to be able to do that.


[00:08:03] KM: It’s a good fit.


[00:08:03] HK: It’s a really good fit.


[00:08:06] KM: So let’s go back to high school. You were in high school. Graduated from Heber and decided to go, I guess, Heber High School I guess is the name of it. Heber Springs High School.


[00:08:15] HK: Heber Springs. Home of the Panthers.


[00:08:16] KM: Home of the Panthers, and decided to go to Fayetteville.


[00:08:19] HK: Right.


[00:08:19] KM: Did you know you wanted to go into real estate like your father.


[00:08:22] HK: I did. I did, or at least I thought that’s what I wanted to do. My daddy encouraged me to do that if I like it once I got involved with the class work. I’d seen him work in the real estate business. I’d seen the struggles of what an agent has to go through to procure a client, close a deal. There are many challenges with being a real estate agent, including managing your cash flow when you first start, because you’re working on commissions more than on a salary.


My dad encouraged me not to be an agent right out of the bat, but to learn a skillset within the real estate business and then roll into whatever form I liked. So he pushed me or guided me into studying real estate appraisal where I could be paid as I did research and appraisal work for people and I would learn the business better by measuring value.


So I spent the last two years of my college working part-time and then I worked for three more years for a real estate appraisal company in Fayetteville, and that was a great asset for me, because I got to learn all about Northwest Arkansas by doing appraisal work all over Northwest Arkansas, and that helped me a lot as I started investing in real estate all over the state.


[00:09:44] KM: Is that still something you would recommend to kids that want to go into real estate?


[00:09:48] HK: If you have the personality that allows you to think analytically, it’s a great way to learn the ABCs of the real estate business.


[00:09:57] KM: Are there really many job openings for appraisals?


[00:09:59] HK: The jobs are limited, but they are primarily driven by independent appraisal houses that are hired by banks, savings and loans, attorneys, etc. So there were very few job openings for an appraiser at that particular time. When I was graduating, my professor in real estate helped me get an internship, and that internship turned into a fulltime job with the person that I was working with. So I had an advantage having worked for them while I was in college.


[00:10:34] KM: Is real estate the same today as it was back then? What year was that? What year did you graduate from college? 


[00:10:38] HK: 1977.


[00:10:40] KM: How has it changed today?


[00:10:41] HK: Well, imagine when I was doing that form of real estate, the messages that would come in the office were written on a pink pad with carbon, and our day was really balanced between being out in the field, looking at properties, taking notes, coming back and composing reports while trying to return phone calls from people that you were trying to get information from.


So I would come in the office and I would have like a deck of cards spanned out the messages of people that had called. We had no fax machine. Faxes had not been invented or at least had not been implemented in the organization at that point. I remember our first fax machine. Actually, the appraiser that I worked for is deceased now, but his name was Kerry Schultz. He was a retired commander in the Navy. So he was skilled in a lot of things, but he was also technologically superior to a lot of people because of his naval training.


So he had one of the first computers in Northwest Arkansas put into application in an office. Ironically, it was the same computer that Steve Jobs used, the Altair 8080B, which was operated with toggle switches. Look at the difference between what he did with his computer experience and what I did with mine.


[00:12:10] KM: If you still had that computer, it’d probably worth some money.


[00:12:13] HK: It would be. Yeah, I think it was trash after a few years.


[00:12:17] KM: Well, and while you were up there, you decided to move back to Little Rock. Why?


[00:12:21] HK: Well, two reasons. One, as you mentioned, I’m from Heber Springs. My parents are still there. I’m married Stephanie Dailey.


[00:12:30] KM: Did you meet her in Northwest Arkansas?


[00:12:31] HK: I met her when I was working. I was out of school, and she was finishing her school. So, as we married, we settled in Fayetteville. I worked in Fayetteville for a while after that until 1980. She was delighted to think about moving back to Little Rock. She never mandated it, but it gave us a chance to get in to a larger commercial real estate market.


So in 1980, if you compared Central Arkansas to Northwest Arkansas, Central Arkansas was probably three to four times bigger than Northwest Arkansas.


[00:13:04] KM: It is still, isn’t it?


[00:13:06] HK: No. It’s about twice as big as Northwest Arkansas now. So the pace of growth in Northwest Arkansas is three or four times the pace that we have in Central Arkansas. That leads to some swings up and down. Mostly up, but their pace of growth is much faster than our pace of growth.


[00:13:29] KM: Riskier.


[00:13:30] HK: Not necessarily riskier. You have the drivers, the economic drivers of the major corporations, Walmart, Tyson Foods, J.B. Hunt Tracking and the University itself. Now, fast-forward 40 years since those businesses have been working, you have vendors that are significant vendors that complement and feed the work to those organizations and they’ve grown in proportion.


So you have companies like Procter & Gamble, and a great story about the first Procter & Gamble. They were a vendor. They were one of the first vendors that moved to Northwest Arkansas. We were lucky enough to build a building for them. It was 15,000 square feet. Before two years past, they asked us to add 6,000 square feet to it. Another four or five years past, they asked us to build another building for them. So we built a building that was twice the size, 48,000 feet plus a little change, and we thought they were going to give us back the 21,000 foot building. We called them to make sure that they didn’t want it. They said, “You know what? We’ve just gotten a new additional business. We want to keep that account. We want to keep that building.” So we went from a 15,000-foot building to a 70,000-foot building in a matter of 10 years. 


[00:14:57] KM: That’s good business.


[00:14:58] HK: Yeah, it was really good.


[00:14:59] KM: You’re listening to Up in Your Business with me, Kerry McCoy, and I’m speaking today with Mr. Hank Kelley, developer and CEO and Flake & Kelley Commercial Real Estate and current president of Rotary Club 99 in Downtown Little Rock, Arkansas. Now you’ve move back to Little Rock. Flake & Kelley doesn’t exist yet, or does it?


[00:15:16] HK: Didn’t exist as Flake & Kelley. In 1979, my partner, John Flake, started Flake & Frank. It’s what it was called at that point, then Flake & Company. Then Flake, Tabor, Tucker, Wells and Kelley, we had five partners. I barely got on the shingle, but I got on the shingle. I was the youngest. Then that evolved into Flake & Kelley. 


[00:15:43] KM: Just the two of you.


[00:15:44] HK: Just the two of us, as the owners of the business. Now, that since changed, because we’ve brought in our associates that have worked with us and shared the company with a number of them so that we have 8 partners in the business that are working with us every day.


[00:16:03] KM: So they have stock shares.


[00:16:04] HK: They do.


[00:16:06] KM: What is your main business? Are you a developer? Do you sell real estate? Do you develop real estate?


[00:16:11] HK: We like to think we do it all. We manage property, which means we take care of property for people. We collect a rent. We take care of the physical property. We repair the roofs and office buildings. We provide services to them. We also do counseling work. So I have a designation called CRE, real estate counseling. Sometimes that gets in to psychological counseling, and I’m not certified in psychological counseling. But the give and take of the real estate business puts you in a position of high-stakes a lot of times. So what I try to counsel my clients on is to think about the math. Think about the math related to the real estate decision that you’re making and remove the emotions from it as much as you can and be business-like about it.


Because the commercial real estate world, unlike the residential world, is more about cash flow than whether or not it’s the home that you’ve got to have.


[00:17:15] KM: That’s right.


[00:17:16] HK: And I’m thankful that I’ve built my career around the former rather than the later.


[00:17:22] KM: Yeah, but you still need a department that takes care of mental health issues of your clients.


[00:17:28] HK: That’s right. We do. We do. But we also develop property, Kerry. So, it’s a portfolio of services that we offer to people that are involved with commercial real estate. So, for instance, we might start a job where we’re looking for a location for someone that then finds a location and they would like to build more of a building than what they need immediately.


So as an example, we entered into a working arrangement with Dr. James Hendron whenver he operated Arkansas systems. Arkansas Systems was a bank software company. At the same time that Systematics was a bank software company years ago. They had a boutique, more of a boutique operation and focused on the ATM world, the world of software for ATMs. James and I were in a business group together, a leads business group, and he asked me to go out and survey Little Rock and look for different locations.


So we went out to the western edge of town and we found a track of land that he wanted to build an office building on, but he really wanted to build for the future. So he wanted to build not only what he wanted today, which was about 50,000 feet at that time, but he also wanted the organization to have room to grow and not have to move again. So, we partnered with him and built a building that was 150,000 square feet.


[00:18:59] KM: When you partner, you put money up with him.


[00:19:01] HK: We do. We have skin in the game, and that’s what we refer to it as, is that we’re looking at the investment just like he is, because we invest money along with the client that’s going to use the building. So, we ended up having to lease about half of the building. It was a five-story building on the Chenal Parkway area along with that land that we needed for the building. We could only buy the land he wanted if we bought 68 acres, and we only needed 15 acres. So, we had to take a deep gulp and say, “Do we really want to take this risk?”


[00:19:40] KM: Go lay on the couch with your other guys and –


[00:19:42] HK: The good news is we said yes and we took the risk, and that track of land, which is at Arkansas’s Systems Drive, or Systems Drive in Chenal Parkway is where we’ve built over half a million square feet of office space over the last 15 years. The Arkansas Systems Building was then later sold to a GMAC, and it goes on and on and on. But that willingness to take the risk of buying the land and being in control of the land benefitted my partner and myself along with the principles of Arkansas Systems. They were able to pay rent to themselves in a partnership, and that’s not a secret sauce, but it is the sauce that we’ve played by and it’s been a really good playbook –


[00:20:34] KM: And you were able to get management fees.


[00:20:36] HK: And we earned them. I mean, we managed the property and we collected the rents. Took care of the properties. Did everything that you had to do as an owner to do that. So that’s what I consider our sweet spot of being willing to take a client, solve their needs even if it means we put skin in the game with them, our investment with them, and take advantage of the opportunity to put our foot in the ground and be able to have product.


[00:21:04] KM: And it worked out great. Is that your favorite project?


[00:21:07] HK: One of my favorites. Yeah, one of my favorites.


[00:21:09] KM: Do you think rental property is a good idea?


[00:21:12] HK: I love rental property?


[00:21:14] KM: But don’t you have to get in cheap for it to be worth it? You have to buy it at 80%.


[00:21:18] HK: You have to buy it at fair value and take care of it.


[00:21:20] KM: What does that mean?


[00:21:22] HK: Well, fair value is a price that a seller is willing to sell for and a buyer is willing to pay. That’s the definition of a fair market value. But what it really means is that you can make a return on your investment based upon the rents that somebody will pay for the building. If the building has to be modified, you can get enough rent from the person that requires the modifications to make the initial investment, plus the modifications paid back in a certain period of time with a fair return.


[00:21:55] KM: That’s mostly commercial.


[00:21:57] HK: It is.


[00:21:58] KM: That is not renting houses.


[00:22:01] HK: Well, that’s right. On the rental house load, you would buy houses you thought was well-located. Spend enough money on it so that the quality of your residential tenant would be a good quality tenant, and then you would rent it on a year-to-year basis or six months at a time. Then when that tenant moved out, you’ll be prepared to make modifications to it again to make it ready for the next tenant.


But the single family rental business has been a good business the last 10 years. It’s been an excellent business for people that have the staying power to be able to buy a home and rent it to others. As you probably know, renting homes, apartments, offices is a lot more popular today, especially in the residential world than it was 10 years ago.


[00:22:52] KM: Because it’s too expensive to get in a home, buy a home?


[00:22:54] HK: Because people want mobility and flexibility, and a lease gives you the ability to say, “You know what? I’ve been here two years. I think I want to move to a different neighborhood, or I want to move to a different market,” and not have the burden of selling the property that you own.”


[00:23:14] KM: I thought it was because they didn’t have the down payment.


[00:23:18] HK: Well, that could be one reason that they rent, but there are a lot of people that have plenty of money that still choose to rent rather than own a home. Especially as you get into people that are in their 60s and up, they look at it and they say, “Do I really want home ownership or do I really want to rent something so that I might have a second home in Colorado, I might have a second home in Florida, and I might own that, but I might also rent that?” So you have much more acceptability these days of people paying rent as supposed to feeling like they have to own something.


[00:24:01] KM: Sometimes rent can be just as expensive as a house payment, but you don’t have to put on a new roof. You don’t have to call a plumber. You don’t have to worry about taxes. So over a long period of time, you can save that money you’re talking about and take the vacations.


[00:24:17] HK: You can, and we still have some deduction value on interest on our income taxes.


[00:24:22] KM: For rental property?


[00:24:23] HK: No. On a home mortgage.


[00:24:25] KM: Oh, that’s great. Yes.


[00:24:26] HK: But you have some limits depending upon your income levels. The new tax laws had changed some of that.


[00:24:30] KM: The other thing about rental property is you don’t have FICA. Isn’t that right?


[00:24:36] HK: I think that’s right. Yes.


[00:24:37] KM: So it’s not wages. So you’re not earning wages.


[00:24:40] HK: No. You’re earning passive income or active income, but rental income, they can be all set by the expenses that you have and can be all set by interest and the depreciation of that rental home.


[00:24:54] KM: Rental income is taxed differently. You don’t have the social security burden. You don’t have to put in 7% of your income on –


[00:25:00] HK: I believe that’s correct.


[00:25:02] KM: So, you save 7% on your taxes. Of course, you don’t get any social security when you get older.


[00:25:08] HK: No.


[00:25:09] KM: So you have to look at that. So is location important?


[00:25:11] HK: Absolutely. That hasn’t changed.


[00:25:13] KM: Is this the most important?


[00:25:15] HK: Some people would argue that financing is the most important. How you handle your debts. But I would say location is still the number one issue that people focus on relative to commercial real estate and also in residential real estate.


[00:25:31] KM: How is the real estate today? By the look on your face, I think you think it’s pretty good.


[00:25:36] HK: I think it’s great. I think it’s great. The balance is really pretty equalized between supply and demand. There’s probably some weakness and what we would call your box retail spaces, and those are some of the junior box spaces that you might see vacant in town. That’s because retail has changed. Retail has changed significantly. The local merchants, a lot of them are no longer in retail.


[00:26:10] KM: And you’re in commercial real estate. Is that affecting you much?


[00:26:12] HK: It absolutely affects the occupancy of the neighborhood shopping centers that we have. So what happens when a merchant goes out of business and we have a vacancy, we evaluate as of today what possible users can we put in that space. In the world of traditional shopping centers, you have a term called tenant mix that’s very important. So merchant A wants to be there with merchant B, and merchant B wants to be there because of merchant C. So it’s a domino effect.


So if merchant A, that is the anchor, leaves, the domino start to fall. So what happens is when you have a vacancy in a shopping center and let’s say you have a men’s clothing store that just went out of business, and we evaluate the other men’s clothing stores in town and we say, “Is there a chance that one of those men’s clothing stores would relocate or would they want an additional location?”


The odds are they don’t want to do either. The odds are we’ve got to find a different use that’s compatible with the shopping center use that’s not a men’s clothing store. The reason for that is when I go to Amazon and decide to click with delivery to my front doorstep instead of getting in my car and driving and trying something on. The fundamentals of retail have changed.


[00:27:47] KM: They sure have.


You’re listening to Up in Your Business with me, Kerry McCoy, and I’m speaking today with Mr. Hank Kelley, developer and CEO of Flake & Kelley Commercial Real Estate and current president of Rotary Club 99 in Downtown Little Rock, Arkansas. We’re talking about how much we love buying real estate, because we do.


[00:28:03] HK: Every piece of property you own owns a piece of you.


[00:28:08] KM: Think about that. That’s kind of gross when you think about it.


[00:28:11] HK: It just owns your time.


[00:28:12] KM: No. It owns my skin and my hair and all that. It’s probably – I know. Think about it.


[00:28:17] GK: I don’t know about that, mom. 


[00:28:19] HK: It’s not meant to dissuade someone from buying real estate, but just know you have to take care of it.


[00:28:25] KM: I love taking care of a property. Anyway, quote from you, “We, meaning Rotarians, look at things from a positive point of view rather than the sky is falling.” You went on to say, “Rotary is a place where if I’m Catholic, if I’m protestant, if I’m Jewish, if I’m agnostic, if I’m black, if I’m white, if I’m Spanish, if I’m Indian and if I’m Mexican, I am welcome.”


So, that’s kind of your mission since you’ve taken over, one of many. But another one that you have is working with Mayor Frank Scott on his mission of City Pride, and you read a book called Our Towns, by James and Deborah Fallows, and I was at Rotary when you first became president. Sitting out there eating my lunch, and you held that book up and you said, “Everybody needs to read this book. I love it, and this is what we’re going to do while I’m president.” It has 11 signs for civic success. Although you call it 10 and a half.


[00:29:30] HK: Well, James Fallows called it 10 and a half, and there are 11. But I’ll get into why it’s a half in just a minute.


[00:29:37] KM: Let’s start. Which one do you want to start with? I wrote them down in case you need help.


[00:29:40] HK: Okay. Well, I’ve got them.


[00:29:42] KM: Okay. Good.


[00:29:43] HK: First, people work together on practical local possibilities rather than allowing bitter disagreements about national politics to keep them apart. That’s so important.


[00:29:57] KM: That one kind of surprised me.


[00:29:59] HK: Well, it is critical though. So if we get on opposite poles because one of us is red and one of us is blue and we can’t go solve the school district issue, what good does that do if we’re apart and not willing to work together to make our local place a better home?


[00:30:25] KM: I’m not sure if it’s a symptom or a reason. It’s the fact that you can’t work together in your local home because you’re Jewish and you’re Muslim and you’re Catholic. It’s the fact that you can’t work together in your home broaden out to become a national problem, or is it because you bring the national problem into your house? I guess they’re the same.


[00:30:48] HK: I’m afraid that we all spend too much time listening to echo conversations by certain brands of news, and we don’t take the time, and I’m reflecting on myself. We don’t take the time to listen to a different point of view.


[00:31:13] KM: And a local view. Take care of local stuff.


[00:31:13] HK: And local view, but the importance of diversity, and it’s critical. If you surround yourself with people that look like you and think like you, you never grow. You just hear the same conversations over and over and over.


[00:31:33] KM: Which brings me to another one of the 11; inclusive and open to attracting new types of people.


[00:31:41] HK: So we’re on a mission, the Club 99, the Little Rock Rotary Club, to make our Rotary club look like our community. It’s a mission. We have a separate committee that’s a division of our recruiting committee, that is the diversity committee. The diversity committee is shared by my friend, Dr. Ashwin Vibhakar, who’s an Indian man, a dear friend of mine. Our friendship goes beyond Rotary. We’ve travelled India with him and his wife. We’ve gone to a family wedding in India. If I had not experienced that, I wouldn’t understand some of the diversity challenges that I faced internally.


I also was lucky enough to go as a chaperone with UA Little Rock to Shanghai, to Xian and to Beijing, and that opened my eyes. I’m a chaperone. I’m learning as much or more than the students are by the experience of interacting with the people.


So if you don’t have the ability to just spend all of your life traveling and meeting people, then it’s just necessary to open your heart and your mind to someone that’s different than you and live through them. Live through their travelled experiences. Live through the experiences they have had as a Jewish person, or as a Hindu, or as a Christian, or as an African-American and don’t limit your knowledge as a person to just what you know. So it’s just the basics of humanity to me.


[00:33:31] KM: Simple. The more you’re exposed to, the more you grow. There’re 9 more. Do you want me to pick it? 


[00:33:38] HK: You can pick one or I’ll hit the highlights of those.


[00:33:40] KM: Hit it.


[00:33:41] HK: So you can pick out the local patriots. Who are our heroes?


[00:33:44] KM: Oh, yeah. That was a good one.


[00:33:45] HK: Okay? So, Mayor Frank Scott is trying to lead this city right now and help us get our swagger back. That’s part of his motto. I want to help him with that, because swagger is a good thing. Our former president, Kenny Gibbs, he’s got swagger. 


[00:34:03] KM: Oh! President of Rotary? Yeah, Kenny Gibbs has swagger. He did. He was a boxer.


[00:34:09] HK: Yeah, he was a boxer. You got to have a swagger to box.


[00:34:12] KM: You sure do.


[00:34:14] HK: But the point of that is be proud of where you live. Don’t dwell on the negatives. Highlight the positives. Work to improve the negatives, but don’t be ashamed of who you are. Don’t be ashamed of where we live. I’m so proud to live here. I wouldn’t live anywhere else.


[00:34:32] KM: You’re a chair leader for here. You really are a city chair leader.


[00:34:35] HK: Thank you.


[00:34:36] KM: I think City Pride is important and I think people – And I think that’s what Frank Scott is trying to do, is really bring up City Pride. We had Ned Perme on who said that he had no idea.


[00:34:49] GM: He’s coming from Mobil.


[00:34:51] KM: Mobil, Alabama. And he came up here and said, “I couldn’t believe that Arkansas, Little Rock, Arkansas had so much to offer. I fell in love with the place, and I left the beach. I can’t believe I left the beach.” So he bought a tanning bed and [inaudible 00:35:04]. No.


But you’re right. It’s a wonderful place and we need to be proud of it and we need to toot our horn and not talk about the things that  it doesn’t have.


[00:35:14] HK: So the other thing is public-private partnership is a term that’s used all over the world. It’s used especially among municipal leaders, but having a real public-private partnership.


[00:35:26] KM: Who would you say that is?


[00:35:28] HK: Well, it’s a project. So let’s say that if you go to the gateway development where Bass Pro is.


[00:35:36] KM: Okay?


[00:35:37] HK: Okay? I-430 and I-30. That was a public-private partnership by virtue of the developer, Tommy Hodges applying for and utilizing a TIF project to build infrastructure and streets and sewer connections that allow that development to get started.


Now, look at what that looks like today compared to what it looked like 10 years ago. If you don’t see the value of a little bit of investment from the public sector to make that happen, then you’re just blind.


[00:36:13] KM: What do you call that project? The TIF project?


[00:36:15] HK: TIF, yeah. The TIF project says, basically, if the city grants you the ability to do it, you can take the difference between the taxes that are being collected on the property today and the taxes that would be collected on the property after the redevelop was done, and you can use part of that. The school district is not exempt. Meaning, the portion of it that goes to the school district is exempt from being relieved. But if you take the difference between what was an  what will be and you use a portion of that to pay for the streets, the sewer, the sidewalks, etc., it stimulates the growth in that area. Nearly every state in the United States has active TIF funding. Arkansas is one of the hardest to get done.


[00:37:03] KM: Yeah, that was a great addition. They have – I thought it was interesting that they had three conversations about schools. A research university, an innovative and unusual school, and a reputable community college to fill the inequality gap, and we had all three of those. 


[00:37:23] HK: We have all three of them. That’s the beauty of this book, is if you read the book and you compare the other cities and towns that he talks about, and their assets, and their challenges, and you compare Little Rock to that. We have the solution to nearly every one of his 10 and a half or 11 points. The schools that we have available to us, including a variety.


[00:37:52] KM: A good variety.


[00:37:54] HK: Both private, public schools at the high school level. Then you go to the college level and you’ve got UA Little Rock, which is a research university. That’s one of the key ingredients.


[00:38:08] KM: Yes. Research University brings new students, professors, smart people. It’s akin to having a river or a harbor was once to a community.


[00:38:16] HK: It’s the flow of intelligent people.


[00:38:19] KM: It’s the flow of intelligent people.


[00:38:22] HK: So, then you have Pulaski Technical College, which is a fabulous two-year institution that prepares people to either go into workforce directly or go on and finish a four-year degree.


[00:38:35] KM: It’s the inequality gap for the people that can’t do the four year, that need to be working faster in two years. And it’s a good one, because there are some community colleges that are not very reputable, and ours is extremely reputable.


[00:38:49] HK: So you also have other community colleges that support the UA System that enter in and around Central Arkansas that can actually interact with UA Little Rock. There was an article recently, I think this week, about UA Fayetteville interacting with its community college in Bentonville, and if they’re seeking that kind of relationship with other community colleges. So the University of Arkansas at Fayetteville has awoken to the idea that they’ve got to do a better job of taking those two-year degree students and finding a way through scholarships and programs to get them through a four-year program if that’s what the student wants to do. UA Little Rock’s been doing it for a while.


[00:39:37] KM: That’s right.


[00:39:37] HK: And they’ve been doing it at the local level. So, what we know about as a graduate from UA Little Rock is they’ve got grit. Very few of the students that go through UA Little Rock have it handed to them on a platter. They may be working part-time. They may have had to delay their education, because they couldn’t find their own educational system. So they might enter college at 20 instead of at 18. They might work while they’re doing it. So it might take them 5 years to get through a program or six years. But the people that we’ve hired that have graduated through that work-study program –


[00:40:18] KM: They really want it.


[00:40:18] HK: They want it. They’re hungry. They’re intelligent and they’re focused, because they work so hard to get through that education. So it’s a bonus and a bargain to get a student that’s gone through it the hard way.


[00:40:33] KM: I thought this one was interesting, which I’ve never thought of; an innovative, unusual school. And if that’s not the Clinton School of Public Service, I don’t know what is. 


[00:40:43] HK: Or you look at the eStem Schools. They’re very innovative. So the latest eStem School is down on Shall Street, right by Heifer International, and they’re educating kids at a very high-level at this point. So it’s a great system. Our fellow Rotarian, Mike Poore, is giving his heart and soul to the school district. I believe he’s got many choices of places he could be, and I’m thankful that he’s here now.


[00:41:11] KM: That’s nice. Of course, everyone knows this one, Great Downtown.


[00:41:14] HK: Great Downtown. We’re so lucky in Little Rock relative to the size of our community. We have a 40-story building downtown that we’re involved with. We also have the River Market Area. We have SoMa. We have so many entertainment areas to go to. I was speaking to one of our fellow Rotarians that lives just on the other side of SoMa and he talked about how nice it is to leave his home, walk to a number of restaurants that are just within two or three blocks at most from his home. And people that live in 303rd River Market Tower regularly walk out of their condominiums, walk to restaurants, like Samantha’s, like Bruno’s. I love Flyweight Brewery over in North Little Rock. It’s just a fabulous setting, and it’s just –


[00:42:04] KM: Yeah, the Argenta District at North Little Rock is just doing great.  


[00:42:06] HK: The Argenta District is on fire.


[00:42:07] KM: I know. Speaking of breweries, Craft Brewery was actually one of the 11 things that makes it good.


[00:42:15] HK: It’s the half.


[00:42:16] KM: It’s the half. I know you were going to say it was the Craft Brewery.


[00:42:20] HK: James Fallow says, and I believe, it’s a great indicator of the spirit of your community. So if you have breweries and distilleries, not that we’re promoting excessive drinking, but what they show is that there’s enough support among the younger people that love to have fresh brew, homemade brew.


[00:42:42] KM: Yeah, they go out and spend money.


[00:42:45] HK: That determinant, he says, is direct.


[00:42:48] KM: Well, they also are the next people coming up. If you don’t have the young people, your community is going to be dying.


[00:42:53] HK: That’s right.


[00:42:54] KM: Then the last one that I think – Well, no. The next to the last one is people know the civic story, which is like the land of opportunity, the natural state.


[00:43:05] HK: So, I understand you’ve got Ernie Dumas coming in the future to talk to you. He was of course a guest of ours at our Rotary club. And The Education of Ernie Dumas, I would just say to our listeners out there, it’s a fabulous book about Arkansas politics, and knowing your civic story, if you don’t know anything else, go read Ernie’s book. It’s just the last 100 years of Arkansas politics told from someone. Ernie hadn’t been doing it for 100 years, but –


[00:43:32] KM: He’s close.


[00:43:35] HK: Ernie, don’t take that.


[00:43:37] KM: He’s probably listening.


[00:43:39] HK: But for 50 years, Ernie Dumas has been involved in the backstories and the backrooms of seeing what happened, and this book tells it all.


[00:43:48] KM: He’s a great storyteller.


[00:43:50] HK: It helps wrap up a great view of our civic history. He’s really good.


[00:43:56] KM: This is a great place to take a break. When we come back, we’ll continue our conversation with Mr. Hank Kelly, developer, CEO of Flake & Kelly Commercial Real Estate and current president of Rotary Club 99 in Downtown Little Rock, Arkansas. We’ll be back after the break.


[00:44:10] Announcer: Friends of Dreamland are proud to sponsor Up in Your Business with Kerry McCoy. Dreamland Ballroom, located on the 3rd floor of the blagandbanner.com building in the historic Taborian Hall is a nonprofit dedicated to bringing back the music, the history and the party of the Dreamland Ballroom.


Our annual fundraiser, Dancing into Dreamland, will be a tournament of past champions to celebrate the 10th year. Mark, Friday, November 15th at 7PM on your calendar. The night will include a dance competition, where audience members text their votes for their favorite acts, a silent auction, free horderves, cash bar and your opportunity to experience the magic and imagine the music of the legends that played on the Dreamland stage, like Ella Fitzgerald, Ray Charles, Louis Armstrong and many more.


Tickets available at dreamlandballroom.org for the 10th Annual Dancing into Dreamland. Be a part of the history of Dreamland. 


[00:45:06] KM: So I just want to tell everybody that you’ve been listening to Up in Your Business with me, Kerry McCoy, and that I have been speaking today with Mr. Hank Kellley, developer and CEO of Flake & Kelley Commercial Real Estate and current president of Rotary Club 99 in Downtown Little Rock, Arkansas.


We didn’t get to everything we could get to. We’ve run out of time. But I do want to give your gift.


[00:45:27] HK: Thank you.


[00:45:27] KM: It’s a desk set with a U.S. and Arkansas flag.


[00:45:30] HK: Thank you.


[00:45:31] KM: Do you have one of those?


[00:45:32] HK: No, I don’t. But it’s so appropriate that, with your business, that you would give this to me. So, thank you.


[00:45:37] KM: I know, right? So every time you put it up you’ll say, “Oh! That flag lady gave that to me.” So do you got any real estate tips for anybody? 


[00:45:45] HK: Buy low, sell high. Yeah. Just remember, look at the location, look at the accessibility. Try not to get over-levered or owe too much debt.


[00:45:58] KM: It’s my worst point right there.


[00:45:59] HK: Yeah, don’t borrow too much money. Put some real equity in your properties, and then the bank won’t dictate to you how your real estate investment goes.


[00:46:08] KM: Have you ever read the book Rick Dad, Poor Dad?


[00:46:10] HK: No, I have not.


[00:46:11] KM: That book says don’t ever buy your own home. Instead, lease, rent, live in an apartment and buy rental property till you’re 40-years-old. Because if you live in your home, you won’t ever have any money to invest in rental property.


[00:46:30] HK: I don’t dispute that, but I would say owning your home is not a bad thing either.


[00:46:35] KM: I agree. It feels good. All right. Gray, who is our guest next week?


[00:46:41] GM: Next week is a reprise of our interview with Joe Fox, owner of Community Bakery. 


[00:46:46] KM: He has sold his business, but he’s still working there, and because it’s Labor Day, I decided it was good to take a businessman who talks about business and starting that business and how he’s turning it over right now. I thought it’s be nice to replay his, because we’ll be out next week.


Hank, thanks again for joining me.


[00:47:05] HK: Thank you. I appreciate you having me.


[00:47:07] KM: I’ll see you at Rotary.


[00:47:08] HK: Thank you.


[00:47:09] KM: For those listeners who might have a great entrepreneurial story they’d like to share, send a brief bio and your contact info to me, kerry@flagandbanner.com and someone will be touch.


To all, thank you for spending time with us. We hope you’ve heard or learned something that’s been inspiring or enlightening, and that it, whatever it is, will help you up your business, your independence or your life.


I’m Kerry McCoy, and I’ll see you next time on Up in Your Business. Until then, be brave and keep it up.




[00:47:38] GM: You’ve been listening to Up in Your Business with Kerry McCoy. For links to resources you heard discussed on today’s show, go to flagandbanner.com, select Radio Show and choose today’s guest. All interviews are recorded and posted the following week. Subscribe to podcast wherever you like to listen.


Kerry’s goal is simple, to help you live the American dream.



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