An asset-less, revenue-free venture renting office space for $300 a month near the land of Wal-Mart, Tyson Foods and J.B. Hunt could be the least-known public company in Arkansas.
Holiday Island Holdings Inc. has been around for two decades, but for most of that time it operated under a different name. In February 2014, VillageEDOCS, a failed electronic record storage enterprise, morphed into Holiday Island Holdings, a real estate development, management and marketing firm.
Since the fourth quarter of 2013, the penny stock company — and even that description is generous — has aspired to buy developed and undeveloped real estate in Holiday Island, a planned community 5 miles north of Eureka Springs.
“Our plan is to get the first asset on the books and get some attention in the investment community,” said CEO Gene Thompson. “We’re not looking to make a quick buck on an overnight scheme.”
The company hoped to buy a shopping center, commercial land and residential property from the similarly named Holiday Island Development Corp., which developed and managed the planned community of Holiday Island. However, HIH still doesn’t own any property in its namesake community in Carroll County.
For now, HIH’s only presence in Holiday Island is leased quarters at 3 Parkwood Drive. The $300-a-month office suite serves as the business office for HIH and Thompson.
In addition to holding the top executive post at the company, Thompson is treasurer of the Holiday Island Chamber of Commerce. Back in the 1990s, he served as the manager of the Holiday Island Special Improvement District.
Shares of Holiday Island Holdings trade on the pink sheets for less than half a penny per share. The company keeps searching for funds to make acquisitions happen while seeking to buy pieces of the Holiday Island Shopping Center to generate income. Its latest effort is a private placement stock offering with a top-end capital raise of $5 million.
Troubled Properties
Holiday Island Development wasn’t able to wait for HIH to come up with the money to buy the properties. During the past year, Holiday Island Development has exited the ownership picture at the shopping center. Three lenders have taken over the project and other adjoining properties owned by the company.
However, Tom Dees, president of HID, has remained aboard.
“I’ve got a good relationship with all the banks,” said Dees, 77, who has overseen sales and development at the 4,000-acre Holiday Island retirement community since 1980. “It’s been good for both parties. I’m here, I know the property and I can take care of the problems. I could walk off and leave this and retire. But I can’t. This isn’t work. This is fun.”
Over the years, Holiday Island has grown into the third-largest community in Carroll County. At the last census count, the unincorporated community surpassed Eureka Springs: 2,373 to 2,073.
Through Holiday Island Development, Dees brought the shopping center-commercial park to life to augment residential lot sales. But the project on Highway 23, outside the entrance to Holiday Island, proved to be an overwhelming financial challenge.
He found a reliable draw and stable anchor with Sun Fest Market, a subsidiary of G&W Foods of Willow Springs, Missouri. But that wasn’t enough.
Holiday Island Development forfeited nearly all of its commercial real estate holdings, including the grocery store, to a pair of local lenders in December.
First National Bank of North Arkansas took possession of a dozen commercial properties in lieu of foreclosure on four loans totaling more than $4.4 million.
The tenant roster among the bank-owned projects in the Holiday Island Shopping Center is led by 26,666-SF Sun Fest Market, 14,800-SF Powell’s hardware and 14,400-SF Fred’s general store.
The Berryville bank also took ownership of 18 residential lots and 20.1 acres bordering the shopping center.
Also in December, Cornerstone Bank of Eureka Springs took possession of two commercial projects: the 4,096-SF Holiday Island Medical & Rehabilitation Center and the 3,256-SF Holiday Island Chamber of Commerce Building across Highway 23 from the shopping center. In May, the bank sold the chamber building at 2 Holiday Island Drive for $350,000.
In June, Holiday Island Development forfeited to Arvest Bank of Fayetteville six undeveloped lots in The Bluffs subdivision behind the shopping center.
Dees, through his Clinic Enterprises Inc., owns a 10,288-SF medical building in the shopping center. He is also on the advisory board of HIH, where he’s in line for 200 million shares as part of a management contract.
As of June 30, Thompson held a 42.6 percent stake in HIH. Under a management contract, he stands to receive 800 million shares.
“I didn’t get total control until November 2015,” said Thompson, who has been involved with the company since November 2013.
Holiday Island Holdings may lack assets and cash flow, but it does churn out press releases. The company has issued 27 since Jan. 1. (See below.)
The announcements range from would-be financing and acquisition deals to community doings at Holiday Island. One thing that didn’t prompt a press release: Holiday Island Holdings recently tripled its outstanding shares to 170 million.
While acquiring income-producing properties at Holiday Island has been HIH’s primary business plan, the company has also stated an interest in someday buying and marketing vacant residential lots. Scores of improved lots are owned by the improvement district and Dees’ Holiday Island Development.
Holiday Island Holdings Sample Announcements
2014
Jan. 13
VillageEDOCS Inc. announces a purchase/option agreement with Holiday Island Development Corp. to buy all or parts of HIDC’s real estate holdings at Holiday Island in a planned multi-transaction process.
Feb. 13
VillageEDOCS changes its name to Holiday Island Holdings.
2015
Dec. 30
The company announces it is in a “very good position” to realize its 2016 first- and second-quarter goals of becoming a fully reporting public company, completing a registered offering and making its first real estate acquisitions, starting with Holiday Island Shopping Center.
2016
Jan. 25
The company is in final negotiations with Holiday Island Development to purchase a 2.5-acre parcel in the Holiday Island Shopping Center.
Feb. 9
Thomas Dees, president of Holiday Island Development, is appointed to the advisory board.
March 14
“We are excited about our progress with this on-going and final negotiations with a Kansas City-based financial firm to provide funding from $10 to $35 million to purchase real estate at Holiday Island,” says Gene Thompson, CEO of Holiday Island Holdings.
April 11
The company announces a letter of intent with Holiday Island Development for the first in a series of planned real estate acquisitions valued at $35 million.
June 10
Says merger talks with a privately held commercial real estate company are expected to close within 45 days.
Aug. 12
Merger plans are dropped.
Dec. 23
Completes a 1-for-30,000 reverse stock split resulting in 141,694 outstanding shares.
2017
April 25
Announces a deal in principle to buy two medical office buildings in the Holiday Island Shopping Center for $1.5 million.
July 19
Reaches an agreement with New York investment firm GPL Ventures LLC and is completing documents for a private placement of up to $5 million.
July 25
A $200,000 acquisition is in the works for the El Mariachi restaurant. The plan is to close in 30 to 60 days.
Aug. 15
Terms for the acquisition of the three top-performing buildings in the Holiday Island Shopping Center are called “significantly improved”: Sun Fest Market, $1 million; Fred’s, $660,000; and Powell’s hardware, $340,000.
Aug. 28
The company will raise $200,000 within 90 days to buy the El Mariachi project. “Eventually, the acquisition of the three top-performing buildings would give [Holiday Island Holdings] a monopoly on the local retail markets,” Thompson says.
Sept. 18
The company is working with an “Atlanta-based private investment firm” to fund its proposed $3.3 million purchase of commercial properties at Holiday Island.
