FAYETTEVILLE — Mayor Lioneld Jordan delayed bringing a proposed lease for a Dickson Street hotel forward for City Council consideration Tuesday.
Jordan said he and members of his administration were still negotiating terms of the agreement with John Davidson, who presented plans for a 60- to 75-room boutique hotel on a portion of the city-owned parking lot west of the Walton Arts Center several weeks ago.
"He resubmitted some stuff, and it's not ready yet," Jordan said prior to Tuesday's agenda session.
"I'm not in any hurry," the mayor added. "I've learned to be a little more patient and not rush things."
Ultimately, the City Council must decide whether to lease about 40 parking spaces to hotel developers in the northeast corner of the parking lot at Dickson Street and West Avenue.
Under terms of the proposed lease city officials sent Davidson last week, hotel owners would pay $6,000 each month over an initial term of 50 years. That figure was calculated based on the maximum revenue the city would lose from the 40 paid parking spaces.
City officials say the rent would provide a reliable income source to finance a yet-to-be-designed downtown parking deck.
According to correspondence obtained by the Northwest Arkansas Times on Tuesday, Davidson made revisions to the lease and submitted those changes for city review Monday.
Among the changes were removing any reference to Oct. 4 as the effective date of the lease and adjusting the agreement to require project completion by June 3, 2014, rather than June 3, 2013, as Kit Williams, city attorney, had first proposed.
"I doubt if these issues can be resolved quickly," Williams stated in a memorandum to Jordan and city staff Monday.
Davidson, who has identified himself as a representative of Monroe Capital, said last week he is leading a team of local investors with the financial wherewithal to pay for the project without having to borrow money, but he declined to name investors.
According to the Arkansas Secretary of State's website, Monroe Capital was incorporated in 2007 but has since dissolved.
Jordan, Don Marr, the mayor's chief of staff, and Steve Clark, Fayetteville Chamber of Commerce president and CEO, confirmed Ryan Fowler, who was also listed as the organizer of Monroe Capital on the Secretary of State's website, is one member of the investment team who has been involved with talks between city officials and Davidson.
Jordan and Marr said they did not know who the other investors are.
Clark said he is personally familiar with Fowler, Davidson and other members of the investment team, but he said Tuesday he was not at liberty to reveal their identity.
"They are rock solid investors," Clark said. "These are not strangers to me and not strangers to business in Arkansas."
"When that lease is getting ready to be signed," he added, "you'll know the legal entity that's signing it, and the city will know who they're contracting with."
Asked what assurance the city had developers would see their project through when larger plans for hotels on Dickson Street have failed, Williams noted the idea of a performance bond, a financial vehicle that would ensure the project's completion.
Essentially, Monroe Capital would be required to provide a bond in the same amount as the cost to construct the hotel. If the project were not finished by a specified completion date, the city would have the right to use the bond to finish the project.
"The performance bond would be the citizens' guarantee that (developers) will build the project if it is approved and the lease is approved," Williams said.
Jordan said Tuesday that it could be several more weeks before the issue is officially presented to the City Council.