A day after dedicating a new home for the Arkansas attorney general’s office in downtown Little Rock, Attorney General Tim Griffin made a pitch Wednesday for the trustees of the Arkansas Public Employees Retirement System to weigh investing in downtown Little Rock.

Trustee Jim Hudson, who is secretary of the state Department of Finance and Administration, said he expects a report from a working group on a plan for state agencies to efficiently use building space in Little Rock — which was created as a result of Gov. Sarah Huckabee Sanders’ Arkansas Forward initiative — will be coming out in the next few weeks.

He said “after that, I think will be in a better position to talk about what should our strategy be for APERS going forward.”

The system’s trustees should consider the right investment to meet their fiduciary obligations for the system and how to best serve its customers in all four corners of the state, Hudson said.

He said the trustees should consider making direct investments in real assets. He noted the Arkansas Teacher Retirement System has direct investments in real assets, such as the Victory Building that system owns east of the state Capitol.

“So if we think that there is a market for investing in downtown Little Rock to redevelop properties for commercial uses, that is something we can choose to invest in,” Hudson said.

The system could redevelop a building to fill its office’s need for about 40,000 square feet of building space, or it could look for a larger building and review the potential for raising income through leasing out some of the space for other state agencies or commercial tenants, he said.

A year ago, the system’s Investment Finance Subcommittee of trustees voted to delay making a recommendation on where the system should move its offices until McKinsey & Co. completed its report for the governor’s Arkansas Forward initiative. The system’s offices are currently located in the Union Plaza building in downtown Little Rock and the system leases space in the building.

The Arkansas Public Employees Retirement System is the state government’s second largest retirement system with about $12 billion in investments and more than 80,000 working and retired members. The Arkansas Teacher Retirement System is state government’s second largest retirement with about $22 billion in investments and more than 100,000 working and retired members.

Griffin, who is the state’s Republican attorney general, told the public employees retirement system’s board of trustees on Wednesday that “whatever restrictions, standards, needs you all have in terms of your building and what you are going to do, I don’t really care to know about it.

“That’s your business,” he said. “What I want to do is tell you what has worked for me. Now I have an opinion that it would work for you and other people, but I am basically here to do what a tour of the (what is now called the Bob R. Brooks Jr. Justice Building) … would do without me talking.”

Griffin said he started to discuss moving out the attorney general’s office of the Tower Building at 323 Center St. in downtown Little Rock, where the attorney general leased space, six months before he was sworn in as attorney general in January 2023.

He said that initially it wasn’t a fiscal matter. Instead, he said it was a cultural matter with the aim of collaboration and cooperation among the attorney general office’s employees.

“We quickly realized if we could own it, was going to be better for the taxpayer, better for everybody,” he said, and he started looking at the historic Boyle Building in downtown Little Rock.

Griffin said “I was scarred by the move of all the people down to the Riverdale,” which he said is marketable to the private sector.

“I think it was a huge mistake,” he said.

In 2019, the Arkansas Development Finance Authority paid $26 million for property at 1 Verizon Drive from Verizon, which is in the Riverdale area. The state Department of Commerce and its agencies are housed in the building.

Griffin said that “no one ever goes to a city like Nashville, or San Antonio or New Orleans, New York , San Francisco and comes back and (says), ‘We had a great time in the suburbs and at the strip malls.’

“No one says that,” he said. “They go downtown to the River Market, to the River Walk, to Broadway, to New York.

“The downtown core is critical. It is not just another place,” Griffin said.

He said he lauds some of the governor’s statements on this issue, and he has had good talks on the same subject with first gentleman Bryan Sanders.

The government is perfectly suited “to lead in areas where others are a little bit uncertain,” Griffin said.

“By stepping in there, we can handle the risk better and we were able to do it,” he said. “I think that’s what we ought to be doing.”

Griffin said Little Rock and the state of Arkansas has been able to turn the tide before the sprawl “got away from us.”

“I think we have got still some real treasures downtown,” he said.

Griffin said the M&M Cohn building “is a matter of fixing the insides because the outside for the most part, (is) structurally sound and ready to go, so I would encourage anyone, any office holders, anybody who is making decisions … to think about the broader conversation, not where is there a place for you to live.

“It is much bigger than that,” he said.

“We have amazing things going down here,” in downtown Little Rock, Griffin said.

He said he plans with a nonprofit group to build a $1 million World War II memorial to honor Arkansas native Staff Sgt. Denver “Bull” Randleman, who was portrayed in the book turned miniseries “Band of Brothers.”

Griffin said that “we are going to continue to cultivate this area and … if you any want to call me directly I will tell you what worked and what didn’t work.

“I am not against people building new stuff. I just don’t think that government ought to be doing that. I think, for example, I think the ADEQ (Arkansas Division of Environmental Quality) building (in North Little Rock) is a huge mistake,” he said. “What the heck is doing out there? If you could pick it up and stick it down here, I would do it.”

Northwest Arkansas has just as much invested in Little Rock’s success as anybody else, he said.

As a result of the development of the Boyle Building to house the attorney general’s office, nearby real state prices probably will increase and continue to increase, Griffin said.

“You all know a lot about money. You may want to get it before we do some good stuff and price it out because it is going to keep going up,” he said.

“We have four full-time security officers that roam this block and they are contractors and have been uber effective,” he said. “We already have seen a wonderful change.”

After Griffin departed the trustees’s meeting, system Director Amy Fecher said trustees tasked her with looking for property for a new system office site in November 2023, and the system spent about $799,000 on its lease in the Union Plaza building in fiscal 2024 that ended June 30, 2024.

In fiscal 2025 that ends June 30, the system will spend about $826,000 on its one-year lease, she said in response to a question from trustee Jason Brady. The system signed another one-year lease for about $845,000 for fiscal 2026 that ends June 30, 2026, she said. The system leases about 43,000 square feet in the Union Plaza building.

Hudson said the system previously owned the Union Plaza building and then sold it and has been a tenant in the building for more than a decade.

“For an asset-owning entity, it makes no sense that we are not owning the thing we are living in,” he said.

Hudson said he wants to see the need for all state agencies in the Little Rock market before making any decisions on where the system’s offices are located.

Daryl Bassett, chairman of the system’s board of trustees, who also is secretary of the state Department of Labor and Licensing, said that “will require a robust discussion among us,” including whether the system can earn a sufficient investment return from owning its own office space.

Trustee Larry Walther, who is a former state treasurer and secretary of the state Department of Finance and Administration, noted that the system already is invested in farmland and timberland.

Hudson said there are lots of state buildings that are at the point of obsolesce.

“To be good stewards, we have to ask the question if we are going to invest a lot of capital, do we invest it in a very dated building that doesn’t have a lot of architectural qualities to it, or does it makes sense to invest that money here where we can actually spur … economic development?”

“I tend to be kind of where the AG is on that,” Hudson said. “That’s the investment conversation.”

“I still come back to (Executive Director) Amy (Fecher) and her team. They have got to serve her customers and that’s what we have to focus on first,” he said, “so what’s the best way to serve the customers?”

Hudson said the governor wants to look at this issue holistically.

If the Arkansas Public Employees Retirement System gets some extra building space to lease out to state agencies, that would help fix multiple problems at the same time, he said.

Bassett said that “I know one thing, it just doesn’t make sense for us continue to pay $845,000 rent.

“We have to do something in the near future,” he said.