The local developer who has made a $2,163,128 offer for the Majestic Hotel site doesn't want to follow two controversial land-use items that were ahead of him on the Hot Springs Board of Directors agenda Tuesday night.
The board was scheduled to consider an ordinance authorizing the sale of the 5 acres the city owns at 100 Park Ave. Tuesday night, but R.A. Wilson Enterprises President/CEO Rick Wilson said Friday that he requested the action item be moved to the board's July 20 agenda.
"(The city) tells me they expect the (land-use items) to be very time consuming," said Wilson, who's proposed building The Majestic, a 6,000 capacity outdoor entertainment venue that the Walton Arts Center would operate. "We could be late into the night before we come up. I think it's better for the board to be fresh when we get up there rather than having labored hours and hours over other people's issues. I want them to be fresh. This gives us an opportunity to be the first item up."
City Manager Bill Burrough said the city agreed to move the ordinance to the board's July 20 business meeting.
Wilson said an addendum to the parking study he presented last month will be available for the board to review before the July 20 meeting. The Peters & Associates, Engineers study Wilson commissioned said the combination of on-site, nearby off-street, hotel and shuttle-point parking can satisfy 135% of the 2,400 spaces needed for a sold-out performance.
Ride sharing was not accounted for in the study, but Wilson told the board last month that more than a third of the Walmart Arkansas Music Pavilion's patrons use Uber and other ride-sharing services to get to and from the venue in Rogers. He told the board Uber could make as many as 570 drivers available for large events at The Majestic.
An agreement with Uber can't be completed until the property is under contract, Wilson said. The real estate contract the board will consider later this month calls for a six-month due-diligence period commencing after the contract is signed. Hot Springs Planning Commission approvals would be sought during the 180 days, and designs, soil reports, an environmental review and civil engineering would be completed by the end of the due-diligence period.
The $100,000 in earnest money deposited with a local title company becomes nonrefundable to R.A. Wilson Enterprises at the end of the 180 days.
An Uber spokesman said last month that the company doesn't dictate when and where drivers work, but it can offer them incentives to service large events.
"There's no sort of agreement where the company provides a number of vehicles," Javi Correoso said. "The drivers who drive for Uber are independent contractors; they're not employed by the company. We do have event operations teams that work with venues and stadiums. There's incentives for drivers to come to a venue if we know there's high demand.
"We don't offer a type of service where we guarantee there's going to be a number of drivers or vehicles available at a venue. That's just not the way our business works."
Wilson stressed that ride sharing wasn't included as an offset in the parking demand calculation.
"There's 135% of the necessary spaces even if we have no ride sharing whatsoever," he said. "That's why the study didn't factor in the actual Uber percentages we estimate. The comfort bonus for parking is the utilization of ride share."
Wilson said The Majestic would operate on the weekends from 5-10 p.m. The more than 30 performances it would host from March through October don't coincide with peak demand times for downtown parking, he said.
The parking utilization summary Wilson presented last month showed two of the more than two dozen lots listed in the parking study have all of their spaces filled at 5 p.m. A fraction of the other lots' spaces are filled at that time, with the usage rate falling as day turns to night.
"I think the perspective people have lost is that we're not parking from 8 a.m. to 5 p.m. Monday through Friday, when there's peak traffic " Wilson said. "We're parking on the weekend, and occasionally on Friday and Thursday. Peak traffic is 3-4 p.m. on Saturday. Starting at 5, when the gates first open, the amount of cars in parking lots dwindles to almost nothing.
"Parking is important to us and the success of the business. Parking has always been a problem downtown, but it's a manageable problem. I think we presented enough data, in addition to this addendum, to prove that access to the venue and utilization of parking lots downtown are satisfied."
A market study of the Majestic site the city commissioned from Design Workshop in 2019 determined an amphitheater/performing arts center isn't financially feasible for the site. The report referenced a 2016 study that said a performing arts center would require a wealthy benefactor to subsidize its capital and operating costs.
"The analysis for this report concurs that an amphitheater and/or performing arts is not feasible on this site, as there is no known funding source for development or operations of such a facility," Design Workshop said.
Wilson told the board his company will pay the estimated $12-15 million in construction costs and will contract the Walton Arts Center to operate the venue. WAC operates the Walmart AMP in Rogers, a venture the nonprofit said operates in the black.
"Walton Arts Center did submit a letter of support for this project because it could be a great opportunity for Hot Springs and the region," Jennifer Wilson, WAC's public relations director, said. "With our experience operating not only Walton Arts Center but also the Walmart AMP, we believe we could help program and run the venue. Through a combination of ticket sales, concessions and sponsorships, the Walmart AMP has been profitable in its operations since Walton Arts Center began managing it."
Financial information for the 12 months that ended in June 2020 the nonprofit filed with the Internal Revenue Service reported revenue less expenses of almost $3.5 million. The $31.31 million in revenue WAC reported included $18.77 million the AMP and WAC's performing arts center in Fayetteville generated in ticket sales and other general sales. Contributions and grants totaled $11.84 million.
WAC reported $27.82 million in expenses, including more than $9 million in artist fees.
"I have absolutely every confidence it will cash flow," Rick Wilson said of The Majestic. "We're on the inside of it. Others who are naysayers are outside of it. We're not doing this because it has a chance of failing. We've never failed at anything we've ever done, and we won't fail at this. This will be successful.
"The city of Hot Springs really needs to get behind this and be thrilled we're willing to make the investment in the northern part of downtown."