Convention center gets a new owner

Local purchases facility for $6.55M; judge rules annual $150,000 A&P incentives will not transfer

Texarkana, Ark., Convention Center changed hands Friday, and a bankruptcy judge has ruled that the city Advertising and Promotion Commission does not have to pay $150,000 a year to the new owner.

James Naples of Texarkana purchased the convention center in a bankruptcy sale for $6.55 million. Judge Brenda Rhodes ruled that one financial incentive granted the center’s original owner will transfer to Naples while another will not.

In a nine-page order issued Thursday in the Texarkana Division of the Eastern District of Texas federal bankruptcy court, Rhodes ruled that annual payments of $84,800 to the convention center from the A&P Commission will continue. The payments began in 2014 and are scheduled to end in 2020.

The judge denied the assignment of $150,000 annual payments negotiated between the convention center’s original owner and the A&P Commission, which began in 2011 and were to continue for 15 years.

That agreement also included rebate of any city hotel and restaurant taxes the convention center paid during those years. The rebate will not transfer to Naples.

When the center was built, its owner, Hiren Patel, negotiated the incentive agreements with the city and A&P Commission. Patel’s company, Texarkana Hotels LLC, filed for bankruptcy April 29, 2016, to avoid foreclosure of the property by MidSouth Bank, which was owed millions in unpaid loans.

As sale of the center to Naples neared, the city, the A&P Commission and the Arkansas Economic Development Commission filed objections to the conveyance of the tax benefit agreements.

Naples said he plans to partner with the city of Texarkana on any convention they bring to the Arkansas Convention Center and hopes to enter into new agreements concerning tax benefits that will benefit all parties.

“And any of those where they help the hotel secure conventions. This way the city can recoup the large expenditures they made to induce the Patels to build their hotel and convention center,” Naples said. “I have instructed my attorneys to start working on the contract between the city for circulation as soon as possible after the closing.”

Naples intends to develop land adjacent to the hotel and convention center into a 30,000-40,000 square foot indoor sports facility and has plans to build baseball fields in the area.

“We welcome the opportunity, though challenging, to provide a fine facility for the use and enjoyment of locals and travelers. It is important to the continued health and growth of the Texarkana area to have adequate and appropriate space for a range of uses, from small business meetings to corporate conventions. We are hopeful we can continue to work with the city and A&P commission to utilize this facility to assist Texarkana in becoming a regional destination of choice for meeting and lodging,” Naples’ attorney, Kyle Davis, said via email.

Members of the A&P Commission were not immediately available for comment Friday. The commission authorizes use of revenues from Texarkana, Ark.’s 3 percent hotel and 2 percent restaurant taxes to support the city’s tourism and hospitality industries.

On Twitter: @RealKarlRichter