Landmark Hotel in Downtown Fayetteville Undergoes Massive Makeover as The Chancellor

by George Waldon  on Monday, Nov. 21, 2011 12:00 am  

Ike Thrash, left, and Sam Alley have partnered to restore the faded luster of a landmark high-rise hotel in Fayetteville that has seen a series of financial ups and downs. [Photo by Wesley Hitt]

New Owners

Thrash's Dawn Properties, known mainly for building, buying and selling apartment projects, also has ventured into office and retail purchase/renovation deals and is no stranger to upscale hotel projects.

The company helped develop the Sheraton Four Points in Biloxi, Miss., a 195-room project touted as the city's largest non-gaming hotel. Ike Thrash and his wife, Dawn, are familiar faces in thoroughbred circles. They own Line of David, the 2010 Arkansas Derby winner who crossed the finish line at 17-1 odds.

The Chancellor represents their biggest Arkansas deal to date. Years ago, Dawn Properties owned Willow Creek Apartments, a 133-unit project in Little Rock.

Alley is best known as chairman and CEO of VCC, the largest general contracting firm in Arkansas. His involvement with The Chancellor is through Bedrock Commercial Partners of Irving, Texas, a real estate operating and investment firm.

After pursuing their own separate deals earlier this year, Thrash and Alley joined forces to put the property under contract in September, culminating in a $3.8 million purchase from ANB Venture LLC on Oct. 31.

"They're in the hotel business, and we're a local player with our relationships in the state and with the university," Alley said. "Both of us bring something to the table."

The downtown Fayetteville project proved a daunting fiscal challenge, one that was deemed insurmountable by most prospective buyers. The hotel was put under contract by two other groups in deals that fizzled, and letters of intent were presented by two more would-be buyers in other dead-end deals.

Still others toured the property, put a pencil to it and said no way. At first glance, Ike Thrash wasn't sure if he wanted to take it on either.

"We look at a whole lot of deals, and my son, Joseph, came across this one and said: "Doesn't this look interesting?" he said. "I said, ‘It looks hard.' But when we went and looked at the property, we decided to move on it."

Backed by a complicated funding arrangement mixing  conventional debt with tax credits, Southwind Hospitality was able to structure a $15.8 million financial package to make the numbers work.

A key component was New Market Tax Credits, issued by the U.S. Treasury through the Heartland Renaissance Fund, an affiliate of Little Rock's Arkansas Capital Corp.



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