Arkansas Democrat-Gazette

Hot Springs board to review $2.1M offer for Majestic Hotel


HOT SPRINGS — The city needs time to review R.A. Wilson Enterprise’s $2,163,128 offer for the Majestic Hotel site, City Manager Bill Burrough told the Hot Springs Board of Directors on Tuesday.

The board agreed, voting after no debate or discussion at Tuesday’s special meeting to table the offer until the board’s May 18 business meeting.

“That will give us time to vet and flesh this offer out,” Burrough told the board, explaining that the four parcels totaling 5 acres at 100 Park Ave. need to be appraised before the city can accept an offer.

Burrough told the board CBRE in Fayettevil­le has been hired to appraise the property the city acquired in 2015.

“We should receive that in the next week or two,” he said.

The contract appraisal service used by the Garland County assessor’s office assigned a $1.34 million value to the property. R.A. Wilson Enterprise­s President/CEO Rick Wilson said the $2.16 million offer represents what the city borrowed from its solid waste fund to acquire the property, demolish its condemned structures and mitigate environmen­tal hazards.

Updated values and objectives for the property’s redevelopm­ent that the board adopted earlier this month included recouping the city’s investment.

R.A. Wilson Enterprise­s plans to build the Majestic Entertainm­ent Pavilion, a 5,000-seat outdoor entertainm­ent venue similar to the Walmart Arkansas Music Pavilion in Rogers, First Security Amphitheat­er in the Little Rock River Market and the Murphy Arts District Amphitheat­er in El Dorado.

A rendering of the preliminar­y concept can be viewed on the company’s website, www.

Wilson said last week that a team headed by his son, Matthew Wilson, R.A. Wilson’s vice president of real estate and constructi­on, began studying the potential for an outdoor entertainm­ent venue on the site more than a year ago.

“We’re a tourist and entertainm­ent town,” said Rick Wilson, a Hot Springs native and 1972 graduate of Hot Springs High School. “It’s just a handin-glove fit. We have 100,000 people in Garland County who will also patronize this business. People in Garland County are looking for entertainm­ent.

“… There’s nothing like this in Benton or Bryant. I assure you this will show up over there if it doesn’t happen in Hot Springs. If it does happen in Hot Springs, it’s going to prevent it from happening there. I would never put this in if there were one 25 miles from here.”

Wilson said similar venues his team toured last year have proved to be successful, regardless of their location.

“The actual locations of these pavilions have little to do with their success,” he said. “It’s the management and operation of it: Booking entertainm­ent, the right kind of entertainm­ent and a cross-section of entertainm­ent is necessary, which is why we are working with the Walmart AMP executive leadership team. We fully expect them to be involved in this project from now on.”

The market study the city commission­ed last year ranked an amphitheat­er or performing arts center as the seventh-best use for the site. A stand-alone thermal water complex ranked first, but Hot Springs National Park Superinten­dent Laura Miller said last week that no process is in place to apply for access to the park’s thermal water.

The National Park Service’s Water Resources Division is studying how much water the park’s springs produce and how much is available for distributi­on. Water that doesn’t flow to bathhouses, display springs, public fountains, Levi Hospital and Arlington Resort Hotel and Spa goes into Hot Springs Creek. The study is examining the overflow’s importance to the creek’s ecosystem.

The Majestic Hotel was connected to the park’s thermal water distributi­on system, Miller said, but supply lines were removed after the February 2014 fire at the complex’s “yellow brick” building.

The market study ranked a hotel, public park, retail and restaurant elements as better uses than an amphitheat­er, which the study said is “financiall­y infeasible” for the site. Wilson disagreed, saying his company wouldn’t risk its capital in an unprofitab­le venture.

“This is going to cost me, we estimate, between $12 million and $15 million,” he said. “I’m not going to invest $15 million in something that’s going to have to be subsidized. We have the business model that’s going to make it successful.”

Wilson asked the city to postpone putting out a third round of solicitati­ons for the property, sign the purchase agreement and negotiate its involvemen­t in the operation. The up to 90 days of negotiatio­ns is more for the city’s benefit than R.A. Wilson Enterprise­s, Wilson said.

“We’re willing to negotiate allowing city involvemen­t, whatever that level of involvemen­t is,” he said. “The city wants to control things. We need that time to try to work through whatever the city’s involvemen­t is.”

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