HOT SPRINGS -- The city will proceed with a market feasibility study for the Majestic Hotel property despite two developers offering to buy the 5-acre site earlier this month.
The Hot Springs Board of Directors instructed City Manager Bill Burrough to continue rating and ranking the five companies that submitted statements of qualifications for the study, which the city will use to solicit proposals for the site. Accepting either Grand Point Investment Group, LLC's or VIPA Hospitality Management's purchase offers before a request for proposals is developed would be premature, the board said.
Grand Point offered $2.1 million for the property, according to an Aug. 5 letter of intent that The Sentinel-Record obtained through a public-records request. Dr. Vijay Patel, CEO of VIPA Hospitality Management, offered the appraised value of the property in an Aug. 12 email that the newspaper also received through a records request. According to Garland County assessor records, the four parcels are appraised at $1.34 million.
The city has spent more than $2 million from its solid waste fund to buy the property, demolish and remove condemned structures, and clear it of any environmental liabilities. The Arkansas Department of Environmental Quality certified the property's environmental health last year, guaranteeing the city and future investors that the 100 Park Ave. site is free of contaminants.
Matt Deuschle, Grand Point's managing member, and Patel pitched their ideas during April's public planning sessions. Grand Point's letter said it intends to build a $115 million, 250-room luxury hotel called the Majestic Resort Hotel & Spa. It would include 30 residential condominiums, a restaurant, retail area, thermal pools, a large public park and parking.
To ease concerns the city has expressed about selling the property and losing influence over it, the letter proposed requiring Grand Point to comply with an agreed-upon set of conditions for developing the property.
The Falling Water Resort at the Majestic concept that Patel presented in April envisions a 150-suite hotel featuring several waterfalls, thermal spring fountains and all 700 feet fronting Park Avenue dedicated to a public gathering space replete with splash pads, benches and boutique shops.
It's a concept he's eager to get started, he said in an email to Burrough earlier this month, telling him the clock is ticking on the $10 million he's put in an opportunity fund. The Majestic is in one of the city's three opportunity zones or tax shelters for unrealized capital gains from the sale of real estate, stocks or other assets. Taxes are reduced or deferred if the proceeds are invested in opportunity zones, which are census tracts with high percentages of moderate-to-low income residents.
"Per Internal Revenue Service guidelines, this fund must be deployed within certain time limits," Patel said in the email. "I humbly request you and the city to make some sort of decision for the project (as soon as possible), so as to help us to concentrate on a particular area in (the opportunity zone)."
Burrough urged the board earlier this week not to let the offers dissuade it from soliciting other proposals for the property.
"We heard everything from a resort hotel to a hot air balloon and a lot of stuff in between," said Burrough, referring to ideas offered at the public planning sessions. "And then there's some who don't want to see anything but green space. My recommendation is we continue the course. Let us do a marketability study and bring that back at a later date."
He had hoped that the University of Arkansas, Fayetteville Fay Jones School of Architecture and Design, which facilitated the sessions, would focus the more than 200 ideas the public submitted into a single vision for the site, but he said the lack of a consensus from the public input sessions will require the feasibility study to consider a gamut of options for the property.
The school's report downplayed the benefits of a large-scale water feature or thermal water pools, two ideas garnering broad support at the planning sessions.
"I think they ran into what [the city staff] ran into, and that was a lot of input for different types of projects at that site," Burrough said. "The report really had three or four different projects that they thought were suitable and really not one that we can choose."
Burrough told the board that it should be prepared to vote on a contract for the feasibility study at its Sept. 3 business meeting. Results would be available six to eight weeks after the contract is awarded, he said.
NW News on 08/30/2019