Developer pitches plan for Majestic
A hotel ownership group made a proposal for the Majestic Hotel site ahead of next month’s public planning sessions, according to emails The Sentinel-Record obtained from the city of Hot Springs through an Arkansas Freedom of Information Act request.
VIPA Hospitality Management pitched the idea for the Majestic Falling Water Resort in a meeting last month with City Manager Bill Burrough,
Assistant City Manager/City Clerk Lance Spicer and Visit Hot Springs CEO Steve Arrison, according to emails provided by the city. Dr. Vijay Patel, the ownership group’s principal, told the city his concept includes a 150plus suite resort with a thermal springs spa, multiple waterfalls and thermal spring fountains and water features accessible to the public.
“The development will have a very nostalgic resort look and feel,” Patel, whose group owns six hotels in Hot Springs, said in a November email to Spicer. “We will use natural grades of the site to showcase the water features and landscaping of the resort. We will name this Majestic Falling Water Resort and seek either a Marriott or Wyndham or similar affiliation.”
The city has provided Patel’s architect with site survey information on the 5-acre property it acquired in 2015.
Patel said his group has raised $10 million to invest in the project, which he said would take advantage of tax incentives enabled by the property’s location in one of the Opportunity Zones the governor designated last year. The corresponding census tract’s poverty rate is more than 35 percent, qualifying it for investments with deferred or exempted capital gains tax obligations.
“Total investment will be $20 to $25 million, out of which we will fund $10 million from our Qualified Opportunity Zone Fund,” Patel said in the email to Spicer. “For the balance, we will need the city’s help for long term financing and some help in taxes.”
The city has more than $2 million invested in the property, borrowing money from its solid waste fund to acquire the site and clear it of environmental liabilities. The demolition and removal of condemned structures cost about $1.4 million. Paying back the solid waste fund is one of the redevelopment goals the city has identified.
Garland County’s contract appraisal service valued the property at more than $1.2 million.
The city maintains public input will inform the project. The dozens of online submissions it has solicited will be a starting point for April 1 and 2 planning sessions at the Hot Springs Convention Center. Ideas presented there will be distilled into more tangible form by students from the University of Arkansas Fay Jones School of Architecture.
“The (Hot Springs Board of Directors) will be making a final decision on what ultimately will happen with the Majestic site,” Burrough said in an email last month to downtown property owner Ken Wheatley, who had contacted him about his desire to see the city’s namesake thermal springs be the project’s central feature. “They have committed to the public input process, and I am sure thermal water bathing will be high on the list from such input.”
Thermal pools and spas — either private, public or both — were the dominant theme of online submissions. Other ideas included an outdoor performance space or amphitheater, city park, 25-story observation tower, visitors center, museum, aquarium, ice skating rink, rebuilding the Majestic Hotel complex and bringing a Starbucks to the site.
“One thing I don’t want people to lose sight of is you can have the greatest idea, but somebody has to pay for it,” Arrison, who emailed the Walton Family Foundation in November about the possibility of the site hosting a next generation Walmart that uses dining, entertainment and community activities to embellish the retail experience, told The Sentinel-Record. “Whatever the idea is, in my mind, it has to make business sense.
“If it doesn’t make business sense, if it doesn’t cash flow and provide a return on investment for the private investor, it’s not going to work. Whatever goes there needs to be an economic demand generator that adds value to the city.”
Arrison said the retail giant has not responded to his inquiry about bringing the Walmart Reimagined concept to the Majestic site, explaining that it was only a suggestion. He said the Hot Springs Advertising and Promotion Commission has not taken a position on the Majestic’s future, but he personally thinks thermal water needs to be the organizing principle.
“It needs to be some kind of a water feature, or thermal pools,” he said. “That’s what I’d like to see. Whether it’s a hotel or mixed-used development, I just hope there’s some kind of water feature.”