A multimillion-dollar redevelopment project is planned for two historic properties in downtown Hot Springs.

The Thompson Building, at 422 Central Ave., is to become a 62-room hotel, and the Dugan-Stuart Building, at 344 Central Ave., will be a residential and retail space, development company TKZ LLC announced this week.

Robert Zunick, one of three partners in TKZ, did not disclose the budget for the restoration of the two buildings, but in an email Friday he estimated that the projects combined will cost from $5 million to $10 million.

Zunick, a financial adviser, has teamed up with architects Bob Kempkes and Anthony Taylor to renovate the two buildings across Central Avenue from Bathhouse Row.

This is the first redevelopment project for the trio, but Kempkes and Taylor have been involved in the restoration of several historic buildings in downtown Hot Springs, including the Quapaw Bathhouse.

The Thompson and Dugan-Stuart buildings house various retail businesses on their first floors and the upper floors are vacant. Construction on the properties is expected to start in the fall and be completed in the fall of 2015.

"I'm glad to be involved in this new chapter in the colorful history of downtown Hot Springs," Zunick said in a news release. "Even though these two buildings' upper floors have been vacant for many years, they are in great shape and ready to renovate."

TKZ gained ownership of the two buildings earlier this week when it bought the properties from the Wheatley family for $2.5 million, Zunick said Friday.

The transaction was finalized Wednesday after negotiations began in October, according to the news release.

"I have great confidence in the historic passion Robert Zunick has for downtown Hot Springs, especially these two buildings," said Kenneth Wheatley, in a statement. "I am confident that the expertise both Kempkes and Taylor have in restoration will ensure this to be a wise decision for our community and be a launching point for future redevelopment."

The plans for the hotel in the Thompson Building include a business center, fitness center and a roof-top terrace, according to the news release.

Some retail space will also be kept on the ground floor of the building. The gardens behind the building will be restored and will connect to hiking trails on West Mountain, the news release said.

The five-story Thompson Building was built in 1913 and designed in the neoclassical style by George R. Mann, who was the principal architect of the state Capitol. The property was recently added to the state's list of historic and endangered places.

Sections of the Dugan-Stuart Building may become vacation rental units, according to the news release. The five-story property was built in 1904.

A glass-covered atrium containing fire exit stairs and communal areas will connect the Dugan-Stuart's two wings. The basement, which once contained a bowling alley, will become a fitness center, according to the news release.

Business on 06/07/2014