HSMP offers help on Majestic redevelopment

After negotiations with one developer ended without an agreement, and another developer pulled out of a real estate contract, the city was ready to put the redevelopment of the Majestic Hotel site on hold.

City Manager Bill Burrough told the Hot Springs Board of Directors last month the city needed to focus on other priorities after having nothing to show for the 18 months of staff time spent on the two proposals, but the lifeline the Hot Springs Metro Partnership recently extended may revive a project that’s been beset by false starts and unfulfilled expectations.

It made a pitch earlier this week to market the site on the city’s behalf.

“We certainly don’t come to you today with a magic wand and a project in hand,” HSMP CEO/President Gary Troutman told the board. “We can appreciate what you all have been through with two very long and exhaustive projects. We’re just asking to lend a hand. We’d like to utilize our resources.”

It requested one year to market the site, with any offers the city receives during that time referred to HSMP.

“We just don’t want anybody to be able to circumvent the process,” local banking executive Scott Dews, chairman of HSMP’s Majestic Site Development Committee, told the board. “If we go out and pursue developers and bring them to Hot Springs, if all it takes is somebody bringing a real estate contract to cut to the front of the line of the work we’ve done, that’s the only thing we’re concerned about.”

The city contracts HSMP for economic development services and is the largest investor in the public-private nonprofit economic development corporation that’s affiliated with The Greater Hot Springs Chamber of Commerce.

Dews told the board the collective expertise of the partnership’s executive committee and membership qualifies it to find the right project for the cityowned property that’s sat idle since 2006.

He said the partnership would vet offers and make a recommendation to the board. It would remain involved during negotiations with the selected developer and see the project through until it’s completed.

Most of HSMP’s economic development work for the city can only be discussed with the board in broad terms, as nondisclosure agreements site selection consultants require prevent HSMP from revealing specifics about the projects it’s pursuing. Burrough asked if that same opacity would apply to the marketing of the Majestic.

“There may be some ability for you to do some work on the front end that’s not disclosed, but the minute the board knows about it, the minute city management knows about it, it’s going to be open,” City Attorney Brian Albright said, noting the state’s open records law provides an exemption for information that would advantage a competitor.

“I can appreciate if there were an entity that had been working with the partnership to present a proposal, and then it becomes public, someone might steal that idea. There is a competitive advantage exception to the (Freedom of Information Act) that could come into play.”

Albright told the board offers HSMP solicits don’t have to be disclosed if they’re submitted directly to HSMP.

“I think if someone is interested in submitting an offer, if

you don’t want to make it public, you have to say please refer any proposals that you have to the partnership,” he said.

Several directors said they and the public will want to be apprised of all offers and proposals the marketing campaign returns.

“I would most definitely want to hear every offer you have, whether it’s for a Ferris wheel or a hotel, because the decision you make may not be the decision we make of what we want there,” District 4 Director Carroll Weatherford said. “I want to hear every offer that comes across your table.”

Mayor Pat McCabe told the board HSMP’s approach would be more focused than the request for proposals the city issued for the Majestic. The two RFPs netted one response the city deemed responsive.

“When we put out a RFP, we’re welcoming anything and everything, whether the person has the wherewithal to pull it off or not,” he said. “I like the approach of targeting specific developers and courting them and making them aware of the opportunity.

“A year from now we may be meeting again with nothing to show. I’m not saying that’s lost time, maybe more of the environment we’re operating in.”

District 1 Director Erin Holliday said enlisting the partnership would lighten the city’s load while broadening the search for the right project.

“It’s a breather for us, so we can focus on the other projects we have going on but knowing that the conversation isn’t dead in the water,” she told the board. “That part is appealing, and also knowing there’s that many more eyes and that many more contacts to try to find what’s right.”

Dews said the right project will do more than recoup the city’s more than $2 million investment in the property. The one-page proposal he circulated said the partnership is “thinking big.”

“We feel the correct development of the site is critically important to the future of Hot Springs,” he told the board. “We recognize we only get one chance to do something special with it. We’d like to help the city and its efforts to ensure the project that goes there is something we can all be proud of for a very long time.”

The board directed Burrough and Albright to work with the partnership on an agreement the board could consider at its Oct. 4 business meeting. Albright told the board it will have to decide how much control to give the partnership.

“The board has to make that determination,” he said. “Are you going to not accept offers for review unless they have been vetted by the partnership?”