FAYETTEVILLE — The long-awaited renovation of The Cosmopolitan Hotel in downtown Fayetteville rests in the hands of new owners Ike Thrash and Sam Alley, who announced the pending property purchase on Wednesday.
Thrash of Dawn Properties in Hattiesburg, Miss., and Alley of Little Rock, whose family owns Dallas-based Bedrock Commercial Partners, plan to give the downtown landmark a complete overhaul.
The new venture, including renovation, is expected to cost about $15 million, with financing from First Security Bank, said Ramsay Ball of Colliers International who is brokering the deal.
Ball said the real estate closing is set for mid-September.
Brian Ferguson representing the seller, ANB Ventures, confirmed the deal is pending and offered no further comment.
The partners set sight on the Cosmopolitan last year as the hotel languished in foreclosure after ANB Ventures recovered the property from previous owners John Nock and Richard Alexander.
Alley, a University of Arkansas graduate, said he envisions the new hotel playing a larger role for the downtown area and the college.
“The hotel is such an important piece of the downtown and I wanted to see it restored as an integral part of the city’s growth and prominence,” Alley said.
Steve Clark, CEO of the Fayetteville Chamber of Commerce, said the hotel holds the key for Fayetteville to host large tourist groups for fall foliage, engineering conferences or nanoscience and university research symposiums year round.
“We have missed opportunities for too long because we don’t have a full-service hotel that can fully cater to groups of 150 or more. Once this renovation is under way, we will start advertising those rooms as far as one year in advance,” Clark said.
The new owners expect a lengthy renovation and temporary closing, but expect to be open by fall 2012. The hotel will be renamed.
Ball said the new owners plan to transition into full renovation within a fairly short time frame, taking into account reservations already made.
Chandler Hospitality Group of Scottsdale, Ariz., oversees the staffing at the Cosmopolitan Hotel.
Darren Brotherton, operations director at Chandler, knew nothing of the pending sale and offered no comment.
TIMELINE
Cosmopolitan History
1978: Construction begins on the hotel.
1981: Hotel opens under the Hilton brand.
1992: Fayetteville Hotel Ventures buys the property for $3 million.
2001: The name changes from Hilton to Radisson.
2006: The hotel is purchased by Cosmopolitan Venture partners John Nock and Richard Alexander, who borrowed $16.2 million for the acquisition.
2008: ANB Ventures acquires the loan from the FDIC following the failure of ANB Financial.
2010: The hotel falls into receivership as FDIC forecloses on the property. ANB Ventures repurchases it at auction for $6 million.
Source: Staff Report
The hotel employs 56 workers who will remain on staff until the deal closes and throughout the transition period.
Atlanta-based McGlashan Hospitality will handle hotel management once the renovation is complete.
The partners are no stranger to the hospitality sector. Dawn Properties co-developed the Sheraton Four Points Hotel in Biloxi, Miss., and Alley’s construction firm VCC built the Westin Hotel at Galleria in Dallas.
The renovation will be handled internally as both partners have extensive building and development experience.
The new hotel owners strive for a four-star quality, full-service yet affordable hotel to serve downtown Fayetteville and the University of Arkansas.
Plans call for 200 standard rooms with a dozen or so suites, 15,000 square feet of meeting space, a full-service restaurant and revamped lobby scene.
“Make no mistake, this isn’t just a facelift on an older hotel,” Thrash said. “We want guests that have stayed at the hotel in the past to enjoy a completely new experience.”
There is a need for a full-service hotel in downtown Fayetteville, but ultimately how often it’s used will come down to product quality and price, said Kathy Deck, director for the Center for Economic Research at the University of Arkansas.
She said the investment is timely as the entire region moves toward a tourism focus with the opening of Crystal Bridges Museum in Bentonville.
Thrash manages a string of multifamily condominiums between Galveston, Texas, and the Florida Gulf Coast. He became interested in the Arkansas real estate market after his horse, Line of David, won the Arkansas Derby in 2010.
The Alley family and Bedrock Commercial Partners is a private real estate investment company that focuses on development, capitalization and management of assets.