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Majestic Death Looms Over Spa City

6 min read

Al Rajabi walked into more than historic opportunity when he entered the ownership picture at the Arlington Resort Hotel & Spa in July. The Texas developer stepped into a political hot spot created by the demise of a Hot Springs landmark two blocks north.

The destruction of the Majestic Hotel that began with years of neglect was accelerated by fire and a partial teardown in 2014, pushed by safety-driven condemnation in 2015 and completed with final demolition in 2016.

Once promising plans for a nonprofit-initiated redevelopment of the Majestic were reduced to rubble and hauled away.

Instead of becoming a home for a mix of low-income and market-rate residents, the hotel became a destination for vagrants and vandals after closing nearly 11 years ago.

The loss of the Majestic left an indelible scar on the spa city’s psyche.

Through stepped-up building code enforcement, Hot Springs officials all but vowed to prevent a tragic repeat at the Arlington and other historic properties.

“There was a lot of pride and memories tied up in the Majestic,” said Ed Davis, Hot Springs fire chief. “People take it personally because of that.

“The city tried to be gentle with property owners of older buildings like the Majestic. It would’ve been better if we had taken a firmer approach with the owner.”

The 260-room Majestic Hotel presented a funky puzzle of four buildings. The oldest structure on the north end, known as the yellow brick building, dated back to 1882. In addition to rooms, it was home to a spa and bathhouse.

Adjoining to the south was the annex, known as the red brick building, which dated back to the 1920s and served as the hotel lobby. Two newer buildings completed the quartet: Lanai Suites, built in 1957, and the Lanai Towers, built in the early 1960s.

“When you look at that huge building, it was a monolith with probably $200,000 needed to be spent every year on upkeep,” said Davis. “There were many years where nothing was done.

“The Majestic was a problem that developed over time. At first, it was very difficult to notice there was a problem. But it had a history of neglect. Once things were noticed, it was too late to do anything about it.”

Promising Project
The Monty Scott family, which also owned the Arlington, closed the Majestic in November 2006, and city officials feared the deteriorating hotel was headed toward an appointment with the wrecking ball unless someone intervened.

“The building was starting to deteriorate,” said Kent Myers, Hot Springs city manager at the time. “Structural issues were heading toward the point of no return.”

Myers saw The Arc of Arkansas in Little Rock, whose mission of supporting people with disabilities includes housing redevelopments, as a possible white knight to save the Majestic.

“I want you to meet Monty Scott,” Cynthia Stone, outgoing executive director of The Arc of Arkansas, recalls Myers saying. “We’re afraid he’s just going to tear it down.”

Dealing with Scott was an exercise in patience-trying diplomacy, but a deal eventually was worked out to put a redevelopment of the Majestic by The Arc in motion.

“I’ll tear down the Majestic, and I’d tear down the Arlington,” Stone remembers Scott declaring at one point. Scott died in January 2016.

Stepped-up inspections and code enforcement by the city were growing factors in Scott’s angst.

“We were getting a lot of pushback from some of the downtown property owners,” said Myers, who left as city manager of Hot Springs in 2008. “They were pressuring us. We made some progress before I left, but more needed to be made.”

Plans by The Arc called for the hotel to be converted into 150 apartments in one-, two- and three-bedroom configurations that ranged from 600 to 1,700 SF and would accommodate residents with disabilities.

“We wanted it to be, so badly,” Stone said. “$20.6 million was the big number.”

The proposal appeared to be a godsend for the Majestic.

“People were thrilled to death,” said Liz Robbins, executive director of the Garland County Historical Society. “A friend of mine couldn’t wait to sell her house and move in.”

Initially, Scott was going to require The Arc to pay $3.4 million for the Majestic after a purchase agreement was struck in 2007.

“He wanted us to purchase it,” Stone said. “That caused a big gap in the financing. Monty wasn’t willing to come off his price.”

Options were extended on the deal as six years rolled by and the hotel continued to languish while The Arc tried to pull together funding.

“It would’ve been a great project,” said Hot Springs architect David French.

French did an analysis of the Majestic and determined it was still salvageable when The Arc began its residential redevelopment efforts.

“I was surprised at how well it looked inside,” French said. “Monty had some tarps on the roof. If they would’ve just reroofed that building, that would’ve made a big difference.

“Each year that it remained unoccupied was another year of water damage. That’s the major obstacle. A building that is left dormant like that leads to break-ins, vandalism and mold.”

Ultimately, Scott made the property a charitable gift to the nonprofit in January 2013.

Stone points to Myers’ departure as city manager in 2008 as a turning point in the project. She described Myers as a champion of the redevelopment who helped build and maintain political support for it.

“When we first talked, the city was all about making the development happen,” Stone said. “That all changed when he left. The City Council wasn’t interested in helping at all.”

After 14 years as Hot Springs city manager, Myers resigned to be city manager at Port Angeles, Washington. These days, he’s city manager of Fredericksburg, Texas.

“We worked with them for almost two years,” Myers said of The Arc. “They just didn’t make it. We were willing to help them pursue funding and comply with codes. They got very close, but they just couldn’t get there.”

Garrison Hassenflu, a developer in Kansas City, Missouri, entered to help and ended up owning the property.

“Gary was going to be the white knight to close that little bit of funding gap they had, but it was more of a detriment having him than not,” French said.

Hassenflu brought baggage to the project in the form of a shaky financial background and problems with creditors. His inability to perform allowed more time to elapse and more deterioration to occur.

“Monty ultimately gave the Majestic to The Arc,” French said. “But The Arc couldn’t be the owner because of the liability issue, so they gave it to Gary.

“They thought Gary had the money and the wherewithal to help make the project happen. But when it was all said and done, he took the city’s money and ran.”

In August 2015, Hot Springs essentially paid Hassenflu $672,783 to relinquish ownership of the Majestic and go away after he racked up hundreds of charges in district court from code violations.

Stone wonders if The Arc’s plans for the Majestic suffered from an “affordable housing” stigma, even though residents would represent a mixed demographic.

“I do know the money the city paid Gary Hassenflu for the burned-out property would’ve more than filled our funding gap,” Stone said. “But the city just wasn’t going to do it.”

Under Hassenflu, plans for apartments had morphed into plans for a 130-unit spa hotel in 2014. Hassenflu couldn’t be reached for comment.

Hot Springs officials were skeptical that Hassenflu would follow up on his intentions to clean up the property by spending money and doing construction work, and that skepticism proved well founded.

The city’s contract to acquire the Majestic Hotel property registered at $1.6 million, of which $935,000 was deemed a donation by Hassenflu.

In addition to cash to close the purchase, Hot Springs spent $1.3 million to clear the property through demolition work and hauling off the debris. That pushed the city’s investment to more than $2 million so far.

The 5-acre site at the northwest corner of Park and Whittington avenues remains vacant. Concrete steps from the sidewalk now lead to green space and remnants of the hotel’s foundation.

City officials continue to look at the redevelopment possibilities for the Majestic property. For now, the dormant corner is a stark reminder of a scenario worth avoiding.

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