The Hot Springs Board of Directors voted 6-0 in a special called meeting Thursday afternoon to offer $680,000 for the purchase of the Majestic Hotel complex.
District 1 Director Suzanne Davidson, whose district contains the hotel complex, made the motion to purchase the property.
District 2 Director Elaine Jones was absent from the meeting.
City Attorney Brian Albright said the owners of the more than 5-acre complex asked for terms from the city that included the purchase price of $680,000 and a condition that the Arkansas Department of Environmental Equality and the Environmental Protection Agency release them from responsibility once the city takes ownership.
"If this takes place, it will be on a general warranty deed, all liens and encumbrances will be cleared, the owner will provide the title policy on the property, taxes due will be paid at closing and current taxes billed but not collected will be prorated," Albright said.
City Manager David Watkins said the money for the purchase would come from the city's fund balance, and the cash flow for demolition and cleanup of the property would come from the General Fund.
Albright said the offer will be void if not accepted by 5 p.m. Tuesday, and if accepted, closing will take place within 30 days of the acceptance and the city will take possession on closing. Anything on the property would become city property, he said.
"We have inspected the property and deemed it to be an unsafe structure, with multiple violations cited on the property, which are going through a court process," he said.
Albright said Garrison Hassenflu, the registered incorporator of Park Residences Development LLC, the owner of the hotel complex, is expected to plead "no contest" Wednesday to several hundred code violations. Any sentencing regarding those violations will be suspended pending closure of the sale, and will be zeroed out if the sale is consummated.
Albright said the city would take acceptance of the property "as is" with no warranties.
"The risk of loss or further damage due to fire or other casualty would be on the seller until the time of possession," he said.
Watkins said if the city takes ownership of the property, it would be easier to qualify for grants and assistance to cover some of the costs of removing the rubble of the "yellow brick" building of the complex, which burned and was razed in February 2014, and future demolition and cleanup.
The city board condemned the "yellow brick" building on March 18, 2014, and the remainder of the complex earlier this year.
"The property, which is the entryway to Hot Springs from the north and which serves as the gateway to the city's historic downtown district, is key to ongoing plans for the redevelopment of the downtown area. Acquisition of this property presents an enormous array of great opportunities on several fronts," Watkins said in a news release issued Thursday just before the start of the meeting, which was called Wednesday afternoon.
"Numerous exciting opportunities for redevelopment of the Majestic property have been advanced in the 16 months after the fire. Creation of a city park, a possible performing arts center, a public amphitheater and a thermal pool complex are just a few of the ideas that have been voiced.
"In addition to these possibilities, the acquisition of the property also gives us the chance to meet the city's obligation to provide a safe and aesthetically pleasing environment for the Arkansas School for Mathematics, Sciences, and the Arts, which is located across Cedar Street and is one of the true treasures of our community," Watkins said.
He said the hotel property is also strategically situated to enhance the redevelopment of Park and Whittington avenues, and the acquisition and potential razing of the entire site improves the marketability of the Velda Rose Hotel and other properties in the immediate area.
Watkins said the acquisition will also eliminate the prospect of a long and costly legal effort to utilize eminent domain authority to acquire the property.
"The Majestic property is the entryway to world-famous Bathhouse Row and creates the first impression of visitors entering downtown via Park Avenue from the north. I have seen properties change hands from one developer to another, with no plan of action or hope for improvement. The city's acquisition of this property opens up a number of positive options for redevelopment that are key to the progress of downtown," Watkins said in the release.
Local on 07/03/2015