City hopeful new Majestic RFP gets more interest

The city is hopeful the request for proposals issued earlier this month for the Majestic Hotel property gets more interest than the first solicitation.

Deputy City Manager Lance Spicer said the new RFP is the same as the first, save an addition to the definitions section. A definition for bid bond, a guarantee the developer purchases and provides the city stipulating the developer has the financial wherewithal to carry out its proposal, was added.

“The only real change was that a definition of a bid bond was added to the current RFP,” Spicer said. “We did that based upon feedback from interested developers/firms and those who submitted proposals that the financial requirement was not entirely clear to some of them.”

The lack of a bid bond, or other instrument attesting to financial fitness, led the city to reject both proposals submitted in response to the first RFP. The response window for the initial solicitation coincided with the emergence of the coronavirus pandemic, causing the city to extend the March 30 deadline to April 30.

It’s likely economic uncertainty in the wake of the pandemic dissuaded developers from submitting proposals in advance of the April deadline, the city said. It’s hopeful the current solicitation, which closes July 10, will get a better response for a project that garnered wide interest after state regulators issued the property an environmental clearance in late 2018.

“At this time, we do believe that developer attention will return with the follow-up RFP release and expect to have additional responses,” Spicer, who has led the city’s effort to redevelop the 101 Park Ave. site since the city acquired it in 2015, said. “That belief is based on interest from developers that were previously on the sidelines and those that were involved early on. I say that optimistically, but certainly cautiously as COVID impacts seem to be calming as the state/nation reopens.”

He said most development companies subscribe to services that notify them of RFPs and opportunities to bid on projects such as the Majestic. He said the city is also publicizing the

RFP through its website, where developers can sign up for updates from the city’s purchasing department.

“There are a couple of different methods we use to advertise, which also includes issuing press releases and running notices in the newspapers,” Spicer said.

The evaluation criteria remained unchanged from the previous RFP. The Hot Springs Board of Directors March 2017 values and objectives are the most weighted factor, with up to

30 points available for proposals that align with those priorities.

They include enhancing economic opportunities, improving local quality of life and enhancing the visitor experience, promoting thermal water and respecting the city’s arts, culture and history. Recouping the more than $2 million the city spent acquiring the property in

2015 and demolishing the condemned “red brick” building, Lanai Towers and Lanai Suites in 2016 is also a priority.

The financing plan, 25 points, quality of the development plan, 20 points, and credentials of the development team and its timeline for completing the project, 20 points, round out the weighted scoring.

The city said proposals submitted in response to the first solicitation were incomplete, explaining that they didn’t include a bid bond, standing letter of credit or information demonstrating financial capacity. Submissions included Grand Point Investment Group and Cienda Partners’ 127-page joint proposal for a $100 million thermal water resort with 250 guest rooms, 30 luxury residences, an outdoor civic/park space, rooftop club, full-service spa, mountain biking concierge program and public-private parking.

The group proposed buying the 5-acre property for $2.1 million or leasing it long term for $1 year. Construction would begin next June, with a projected June 2023 opening date.

DHM Design also responded, proposing a design that would “look to integrate the hot springs into the natural environment.” The city would have had to find investors for the design or enlist the Colorado firm’s help in recruiting investors.