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Arkansas Municipalities Left to Clean up After Property Owners Leave Mess

7 min read

The city of Pine Bluff debated for months about what to do with the rubble from the privately owned buildings that collapsed in downtown earlier this year.

Pine Bluff Mayor Debe Hollingsworth said the owners of the buildings were willing to walk away from the properties instead of paying to remove the debris that had spilled into the street.

The city considered spending about $300,000 to demolish three buildings that were between 75 and 100 years old on the 400 block of South Main Street, but the city council rejected the expenditure, she said.

“So we just had to sit on it,” Hollingsworth said.

Hollingsworth said the city considers itself lucky, however, that Fordyce businessman Danny Bradshaw came along with a solution. Since June, Bradshaw has made deals with the property owners to acquire the buildings on the east side of the 400 block of South Main Street and will haul the brick and other material off for resale, she said.

“It was an answer to our problems,” Hollingsworth said.

Dealing with property owners who neglect dilapidated commercial buildings is becoming a growing problem for cities, especially when they crumble, she said.

“It’s not unique to Arkansas. It’s all over the nation,” Hollingsworth said. “In older cities, in which the buildings have not been properly maintained, they’re faced with the exact same problem.”

The city of Hot Springs recently spent $672,783 to buy the Majestic Hotel after its former owner refused to clean up the debris after a portion of the vacant building burned in February 2014.

The city of Morrilton similarly became the owner of two downtown buildings in 2011. The buildings collapsed, killing a toddler, and the owners failed to remove the debris.

Vanessa McKuin, executive director of the Historic Preservation Alliance of Arkansas, said she didn’t know whether the problem of collapsing buildings was becoming more common, but she said vacant buildings need to be dealt with quickly so they don’t crumble.

“There’s stabilization work that can be done for these properties that don’t necessarily have to be rehabilitated right away,” McKuin said. “Being proactive about it in the long run is a cheaper way to deal with the situation — and a much safer way.”

Cities have legal options to deal with owners who don’t remove the remains of their collapsed buildings, said Mark Hayes, director of legal services for the Arkansas Municipal League.

A city can declare the property a nuisance and dangerous to the public health, safety and welfare, he said. “That then allows the city to get in there and either shore it up or raze it,” he said.

Hayes said that if the owner disregards the notices and the city has to pay for the repairs, the city can slap a lien on the property for the bill.

“Of course, that means for the future, it makes it very difficult for the owner to try and relinquish the property” until the liens are satisfied, he said.

But sometimes, that isn’t a practical option.

Hollingsworth said that if Pine Bluff had moved forward with the demolition of the three buildings on Main Street and placed liens on the properties, there’s no guarantee the city would ever recoup its investment. “You might get 50 cents on the dollar back. You don’t know,” she said.

Pine Bluff’s Troubles

The city of Pine Bluff, which has a population of around 46,000, experienced its first problem in the 400 block of South Main Street in February 2014 when the building at 401 S. Main St. collapsed. The owners, Joe and Patty Meador of Star City, eventually spent about $30,000 to have the site cleaned, but the project took several months. Meador didn’t return a call for comment.

Then earlier this year, two vacant buildings — the Band Museum at 423-425 S. Main and a building owned by the Veterans of Foreign Wars at 417 S. Main — partially collapsed, spilling bricks and debris into the street, said Dee Herring Gatlin, a real estate broker and chairwoman of Pine Bluff’s Historic District Commission.

The city wanted the two buildings demolished, as well as the 415 S. Main building that once housed Kahn Jewelers. The Kahn building didn’t collapse, Hollingsworth said, but there were concerns about its structural integrity.

Hollingsworth said the owner of the Kahn building, Adrianne Kahn of Hot Springs, “was great to work with and she took responsibility.”

Hollingsworth said the owner of the VWF building couldn’t be located immediately. Gatlin, however, said she eventually found the right contact with the VWF and is in the process of having the title transferred to Bradshaw, who is cleaning up the 400 block of South Main.

Gatlin said she negotiated the deals so Bradshaw could take control of the properties. Bradshaw paid $10,000 total for the buildings at 401 S. Main and 409 S. Main, according to records at the Jefferson County Assessor’s Office. Bradshaw didn’t pay for the properties at 411 S. Main, 415 S. Main and 423 S. Main, but he assumed the liabilities, Gatlin said. All the buildings were vacant except for 411 S. Main, where Robert English operated Mid South Music. The five structures had a market value of about $115,000, according to the assessor’s office.

Gatlin said that Bradshaw has started cleaning up the properties but that knowing how long that would take was difficult. “It’s probably going to be done in phases,” she said. “It could easily turn into a yearlong project.”

Meanwhile, the city of Pine Bluff is contacting other property owners on Main Street to encourage them to take care of their properties.

“We’ve done a complete inventory of our downtown buildings,” Hollingsworth said. “So we kind of have a good idea as to the structural integrity of the buildings.”

She said the city also now has a law on the books that can force building owners to hire a structural engineer to do a complete assessment of the property.

“And then we’ll evaluate that structural engineer’s report and go from there,” she said. “We want them to realize that this is their responsibility, but we want to help them along the way.”

The Majestic

In February 2014, a fire destroyed much of the vacant Majestic Hotel, which had anchored the north end of Central Avenue in downtown Hot Springs.

The owner of the building, Gary Hassenflu, the manager of Park Residences Development LLC of Kansas City, Missouri, planned to turn the building into a 130-unit spa hotel, according to a June 30, 2014, letter to the Arkansas Department of Environmental Quality. The letter was released to Arkansas Business under the state Freedom of Information Act.

But the fire put that redevelopment project on hold. A pile of bricks also littered the sidewalk. Getting the project cleaned up was difficult because some “asbestos-containing building materials” were included in the debris, Hassenflu said in the letter.

Hassenflu said it was his intent, however, to remove the debris from the property. That didn’t happen, said Tammie Hynum, chief of ADEQ’s Hazardous Waste Division.

Hynum said ADEQ tried to work with Hassenflu to get the debris removed from the site, but Hassenflu “was having difficulty securing the financial resources to address this appropriately.”

Hassenflu didn’t return calls for comment.

On Aug. 25, the city of Hot Springs bought the Majestic Hotel. The contract sales price was $1.6 million, but after a number of deductions, including a $935,000 “donation” from Hassenflu, the city paid $672,783, according to a news release from Hot Springs.

The city said in the release that it planned to start removing rubble from a portion of the complex soon. The news release also said that Hassenflu “has been cited for numerous building and code violations” after the hotel’s fire. “Despite public outcry and several date extensions granted by the Arkansas Department of Environmental Quality, Hassenflu never executed any rubble removal.”

Hynum said ADEQ tries to work with property owners to clean up sites, but it can fine the property owner if the property isn’t cleaned and returned to its normal state. Hynum said ADEQ “has had great success” working with Hot Springs to remove the debris.

Tragedy in Morrilton

The city of Morrilton also became property owners in 2011 after a cleanup of the collapsed downtown buildings failed to get under way.

Morrilton Mayor Allen Lispmeyer, who was an alderman in 2011, said cleaning up the buildings’ debris took between six and eight months.

“It could have been handled a lot quicker,” he said, but declined to comment further on what caused the delays.

Brian Andrews of Center Ridge, one of the owners of the buildings, told Arkansas Business last week that cleanup was delayed because the debris contained asbestos and the cost to remove it would have been $64,000.

The Associated Press reported in July 2011 that the other owner of the building, Dr. J.J. Magie of Morrilton, said the price was higher than the $25,000 that had been quoted before the asbestos was discovered.

“It’s just too high,” Magie told the AP.

Magie told Arkansas Business last week that he handed over the property to the city on the advice of his attorney.

“That was a catastrophe,” he said, because of the death of the child.

Lispmeyer said the City Council talked about the city paying to clean up the property and then filing a lien on the properties. “We talked about it every month because we got tired of looking at it,” Lispmeyer said.

But that idea eventually was scrapped because “we never really cleaned up anything ourselves” and didn’t know what legal liability the city faced.

Eventually, the property owners gave the property to the city and assigned the insurance settlement to the city for the cleanup, Lispmeyer said.

He said he didn’t recall the financial terms of the deal.

The site is now an empty lot.

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