Northwest Arkansas Democrat-Gazette
Fayetteville panel to weigh downtown hotel deal
FAYETTEVILLE — The City Council on Tuesday will consider the framework of a deal with a private developer to build a seven-story hotel with public amenities at the southern end of the arts corridor’s civic plaza.
A downtown business coalition and the city’s attorney have concerns over the arrangement.
The council will consider approving a letter of intent with developer Brian Reindl and his Reindl Properties company for a public-private partnership to construct a building northwest of where Spring Street meets West Avenue. Reindl owns the adjoining land immediately south. The project would be part of the planned civic plaza of the downtown arts corridor, known as the Ramble.
The civic plaza will replace the 290-space parking lot west of the Walton Arts Center. A replacement parking deck is under construction northwest of West Avenue and Dickson Street.
The plan calls for a sevenstory, 134- room hotel with ground floor amenities for the public at the southern end of where the Walton Arts Center parking lot is now. Estimated cost of the hotel project is $50 million.
The ground floor would include restaurant, cafe and retail spaces open to the public. The building also would include a rooftop bar with views overlooking the plaza, Dickson Street and the University of Arkansas campus, according to architect Rob Sharp.
“Fayetteville hasn’t had a new downtown hotel since the 1970s,” he said. “This project is an opportunity to express confidence and pride in our downtown.”
Included in the letter of intent is a provision for public restrooms and a storage area for the civic plaza’s outdoor stage, which would sit just outside the entrance of the hotel to the north. The city would maintain the public restrooms. The cost for construction of the restrooms
and storage area would be deducted from the purchase price, negating the cost to the city.
The hotel’s $ 50 million cost would be raised by private investment, Sharp said.
LegaL concerns
Tuesday will mark the first time the full City Council will have seen the plan. The proposal is a resolution, meaning the council must vote on it or table it for another day.
Sharp presented conceptual drawings to the city’s resident-led Arts Council in July. One City Council member, Sonia Gutierrez Harvey, sits on the Arts Council.
If the City Council approves the letter of intent, city staff and the hired landscape architecture firm designing the civic plaza, Nelson Byrd Woltz, will work with Reindl Properties to finalize the building footprint. An independent third party would appraise the land value, and Reindl would agree to buy the land for the building from the city at that price. Staff then would present the City Council with the major terms of a final agreement.
After that would come a planned zoning district outlining specifics of the development that would have to go through the Planning Commission and City Council. Finally, a real estate contract would solidify the final development agreement.
However, City Attorney Kit Williams said he believes the letter of intent as written is actually a binding contract. He outlined his concerns in a Tuesday memo to the council.
“This proposed agreement sets forth and settles the primary and most important terms and conditions for the development and construction of the building,” Williams wrote. “These may be potentially fleshed out by a few minor adjustments around the edges of the agreement, but no significant changes will be possible.”
The letter of intent was written by Vicki Bronson of local law firm Conner & Winters. Bronson is the city’s hired real estate attorney.
Chief of Staff Susan Norton said she does not believe the agreement would lock the city into the project.
“It outlines terms the parties intend to include in a formal agreement,” she said. “LOIs are used a lot in real estate transactions and business acquisition transactions. LOIs do not generally contain every provision that will ultimately be contained in the binding contract, which will come back to the City Council if it makes sense to continue working toward a final agreement.”
Williams advised the council its decision Tuesday should be measured, careful and informed. A provision of the letter of intent calls for public input sessions within four weeks after the agreement is signed. Williams said public input should happen before the council votes. The building’s design and construction will have already been decided and must comply with the drawings included in the proposal, he said.
Parking, Parking, Parking
Peter Lane, president and chief executive officer of the Walton Arts Center, said he and a coalition of downtown business owners have serious concerns about the impact the project would have on the entertainment district. The agreement calls for a minimum 32 basement-level parking spaces for the building. Hotel guests would use valet parking, and the city would lease spaces to the hotel for use.
Justin Clay, the city’s parking manager, said the spaces the city would lease to the hotel would be on “underutilized lots” near the downtown square. The city has 549 offstreet spaces available in its downtown square business parking district with an average use that typically doesn’t exceed 70%, he said.
“Valet parking is a great strategy for any entity to relieve parking pressure in highly utilized areas and makes more efficient use of some of the city’s underutilized parking supply,” Clay said.
Lane said the plan would only take from the existing, finite parking that is available downtown.
“This penalizes established businesses and their customers for the sake of a new development that doesn’t include plans that would accommodate their customers from the very start,” he said.
The Walton Arts Center and a group of downtown business owners announced last month they are commissioning a privately funded study to assess current and future parking needs. The group hired Kimley- Horn consulting firm in Raleigh, N.C., for $100,000. The goal is to finish the study by December.
Lane called for any additional development downtown to be put on hold until the parking study results are available.
City code requires no minimum parking for nonresidential uses. Valet parking, however, may be subject to Planning Commission approval depending on where the spaces are located in relation to the building.
The city does require a statement or parking analysis to indicate how a nonresidential development would provide adequate parking without negatively impacting adjacent properties or creating or compounding a dangerous traffic condition.
Per the letter of intent, Reindl Properties would have until July 1, 2024, to submit the planned zoning district request to the city. All agreements with the city would be null and void if Reindl did not get a building permit within one year of the civic plaza’s completion.
If Reindl did not start construction of the hotel within 60 days of getting a building permit, or if he didn’t finish construction within two years, the city could buy back the land at the original purchase price, plus the fair market value of any work done to that point as determined by a third-party appraiser, according to the agreement.