City board holds up sale of vacant lot

The Hot Springs Board of Directors balked at selling a vacant lot at the intersection of Orange and Rugg streets Tuesday night, telling the prospective buyer progress needs to be made on the plan he and his business partner presented before the city will sell.

The board tabled Monolith Properties Corp.’s $3,000 offer for the 4,560-squarefoot parcel south of the Hot Springs Fire Department Central Station on Broadway Street. Company representative John Girolamo told the board the lot would be used for parking in connection with a public-benefit corporation Kim Hanke wants to open in the former Hot Springs High Fieldhouse at 228 Orange St.

According to property records, the city acquired the lot in 1990. City Attorney

Brian Albright told the board it was probably included in the land purchased for construction of the fire station. The city has classified the lot as surplus property. Monolith purchased the adjacent parcel to the east in March.

Hanke told the board he plans on converting the historic gymnasium into a church with a warming and cooling center for the homeless. To support what he called the “Kingdome Project,” sales seminars and other informational meetings would be held in the building.

Monolith acquired the gymnasium last September. Girolamo told the board the company is planning to sell the building to Hanke’s public-benefit, or B corporation, a for-profit structure that gives equal priority to earnings and serving a societal good.

But the board questioned Monolith’s intent, given that the gymnasium was listed for sale in Sunday’s edition of The Sentinel-Record for $389,000. Property records show Monolith acquired the 25,000-square foot space for $79,000.

“I think what’s confusing the board is two days ago you had this listed for sale,” Albright told Girolamo. “You purchased this property barely over a year ago, and now it’s listed for sale the very week you’re wanting to purchase property across the street. You said this is an accessory use for the gymnasium, but the gymnasium is for sale.”

Girolamo said the property is no longer listed for sale, and that Monolith is committed to Hanke’s plan for the space. He said architects are already working on designs.

“I believe he’ll follow through on this,” he told the board. “I think this neighborhood needs something to happen. You need something to happen there. The worst that could happen is that you’ll have more parking.”

An appraisal the city commissioned in May valued the lot at $3,700 and said it was not suitable to build on, explaining that it couldn’t satisfy the 25-foot setback stipulated by the area’s zoning requirements.

The board said the city needs to develop a policy for selling surplus real estate, as state law does not prescribe a procedure for cities to follow, but that it would consider selling the lot if the Kingdome Project becomes a reality.

Hanke said the city could further that end by going ahead with the sale.

“Why would you want to wait?” he said. “It just makes sense to me that it should be purchased now. It would let us know y’all are behind us. If y’all aren’t behind us we’ve got problems. There’s nothing in it for me. Believe me, there’s definitely not much in it for (Girolamo). He could do a whole lot better selling (the gymnasium) to somebody else. He backed out of a pretty big number.”

Girolamo told the board it was standing in the way of progress. The gymnasium and lot are in one of the city’s three Census tracts the governor designated as Opportunity Zones earlier this year. A feature of last year’s Tax Cuts and Jobs Act, the program defers or exempts capital gains taxes on investments in low-income areas.

“Every time we take a step forward, then we get these new rules,” he said. “I sat here about a year and half ago, and you gave away a whole street to Oaklawn for nothing.”

The board has adopted numerous ordinances since 1987 that have turned over public rights of way to accommodate expansions at Oaklawn Racing and Gaming, according to information provided by the city clerk’s office. The most recent was a 50-foot right of way on Barkley Place in 2013.

“The property is not sold to anyone,” Assistant City Manager/ City Clerk Lance Spicer explained in an email. “The vacation just releases the portion of (right of way) from the public domain to the adjoining property owners.”

Spicer said Oaklawn requested the street vacations after it purchased properties bordering both sides of city rights of way.