HOT SPRINGS — February 2024 will mark the 10th anniversary of the catastrophic fire that destroyed the Majestic Hotel, a landmark property that helped define the historic downtown of Hot Springs National Park.
Ahead of that anniversary, Hot Springs city officials are under pressure to find someone to build something on the 5-acre property, now a vacant grass-covered hill at Park and Central avenues. The only remnants left of the structure, once one of the most famous hotels in the South, are some concrete steps and crumbling walls.
“I am less concerned about the time it might take [to find a developer] than I am about what actually ends up there,” Hot Springs Mayor Pat McCabe told Arkansas Business. “If our goal is to rid ourselves of the property, I guarantee you we can get rid of the property tomorrow. That doesn’t guarantee that what will be there for the next 50 or 75 years will be what we want. That is the big challenge.”
A contract with the Hot Springs Metro Partnership, an economic development group, to market the property and vet potential developers expires at the end of September. It’s unclear whether the group will continue to work as the exclusive clearinghouse for the property after that, a question that is up to the Hot Springs Board of Directors to decide.
Previously the Board of Directors issued requests for proposals. It received scant response, and those that were considered never materialized.
There is no set sale price for the land, but the city said in documents that it needs to recoup the $2.3 million it has spent, including the purchase and costs affiliated with cleanup efforts and environmental studies, which took several years to complete.
The Metro Partnership is pushing for some type of mixed-use development that would include restaurants, a hotel and shops.
An idea to have thermal water pools there was scrapped after it was unclear whether the resources could be secured for use from the National Park Service.
Expensive to Borrow
Since the Metro Partnership’s Majestic Site Development Committee began working on the project last fall, it has reached out to a “list of a dozen prospects” to try to garner interest, Cole McCaskill, Metro Partnership vice president of economic development, said.
“If we got any of [the 12 prospects] it would be like a huge win for Hot Springs,” McCaskill said. “There has not been a lot of interest from those entities. We think that is based on the investment environment. It’s so much more expensive to borrow money. The conversations just feel a lot less exciting than they did pre-COVID when it was a very exciting time.”
The Metro Partnership declined to disclose to Arkansas Business the names of the developers who had been contacted. In May, it declined a Hot Springs Sentinel Record public records request for the same information.
“We have been doing other marketing, and there have been some other prospects identified along the way,” McCaskill said. “We are in talks with several other prospects and are actively doing business development for the site.”
McCaskill also declined to name the three additional prospects he referenced.
There is one prospect who has resurfaced: Rick Wilson.
In July, Wilson, president and chief executive of R.A. Wilson Enterprises, a local development group, told the Sentinel Record that he’s still interested in building an amphitheater on the property.
The Metro Partnership said it had sent Wilson a marketing packet after he expressed renewed interest. “We are now in discussions with him,” McCaskill said.
McCabe, the mayor, declined to comment. “If we get a proposal, our job is to kick it to the Hot Springs Metro Partnership,” he said. “We’re not going to analyze it, or comment on it or enter into a discussion with the proposers.”
Wilson nearly signed a deal with Hot Springs directors in 2021 to build a 5,000-seat performance venue. Those discussions progressed despite a 2020 Majestic Site Market Study that concluded an “amphitheater and/or performing arts center is not feasible” because of “no known funding source for development and operations of such a facility.”
The amphitheater deal fell through after Wilson told the board he couldn’t attract a venue operator, a requirement of the city’s real estate contract. Wilson told the Sentinel Record that clause was “restrictive” but said he might consider a scaled-down version with a smaller amphitheater of about 1,000-2,000 seats.
Arkansas Business could not reach Wilson for comment.
‘Silver Lining’
Another plan to build about a $110 million thermal water resort also collapsed. That deal with Dallas-based Grand Point Investment Group and Cienda Partners failed to move forward after the city board raised concerns about financing.
Exclusive negotiations with Grand Point and Cienda took place as the COVID-19 pandemic began. The pandemic led to the global suspension of the tourism industry. “With what was happening in the world, I was not going to ask any bankers for credit,” said one local developer who spoke on the condition of anonymity, citing concerns that speaking candidly might impact other business ventures in the community.
“They would have laughed me out the door.”
McCaskill sees it differently. “One kind of silver lining that exists in this whole process is we didn’t get a big development going in 2019, then COVID hit, and it stalled out, and we [would] have a half-built project there to contend with because the developer went bankrupt,” he said. “We have a green piece of land that is shovel-ready and ready to be built.”
But there are some concerns that patience for something to happen is growing thin.
“I have constituents who ask questions about the plans for that area. There is a lot of interest in that,” Karen Garcia, a city director, told Arkansas Business. “It’s something I want to keep on the forefront.”
“I don’t want a lot of restrictions on it,” Garcia added, without elaborating further.
McCaskill said that finding the right match “is not for the faint of heart.”
“I would not say that there is anything different about working with the local government here in Hot Springs than anywhere else,” McCaskill said. “That’s not been the problem. That is not the reason why we don’t have a first-class development here — not because the city is difficult to work with.”
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