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Tom Dees’ Long Fight to Keep Holiday Island AfloatLock Icon

17 min read
Tom Dees Holiday Island 136029
<p>Tom Dees, founder and president of Holiday Island Development Corp., predicts 10,000 people will live there eventually, about four times its current population. </p> ( Kerry Prichard)

HOLIDAY ISLAND — Drive the curvy roads north out of Eureka Springs to the state’s mountainous northern edge, and you’ll discover Holiday Island, “the town that Tom built.”

Etched out of an isolated stretch of Ozarks along crystal-clear Table Rock Lake, the town came together in the mold of several better-known Arkansas lake and golf communities built for recreation and retirement in the mid-20th century. Think Hot Springs Village or Bella Vista.

Editor’s Note: This is the latest in a series of business history features. To suggest future Fifth Monday articles, please contact Gwen Moritz.

But 4,500-acre Holiday Island, whose half-century fight for stability includes zany promotions and characters ranging from Elly May Clampett to a beer-drinking chimpanzee named Magoo, owes its very existence to one Thomas Harold Dees.

That’s the word from economic developers, Carroll County business owners and even locals you meet at cafes and gas stations in this tourist-reliant spot an hour east of Bentonville.

Dees stepped up to buy Holiday Island’s development rights for $10 million in 1990 when out-of-state owners threatened to lock the gates. And it was Dees who conceived the town’s $50 million commercial strip on Highway 23 later in the 2000s, nurturing it through ups, downs and the rise and fall of time-shares.

He remains a mentor and father figure to many of its businesspeople. “None of this would be here if not for Tom,” said Greater Berryville Chamber of Commerce Executive Director Dean Lee, who grew up in the area.

“Eventually there’ll be 10,000 people here,” said Dees, whose one-word description of himself is “optimist.”

Birth of a Municipality

Now in middle age, Holiday Island could use some optimism after a contentious and close vote to incorporate as a city. A November referendum established a new municipality and made Dan Kees its first mayor, accompanied by a five-member City Council. All are working as volunteers.

Kees did not respond to interview requests last week, but he told KUAF public radio this month that access to state turnback funds was a crucial reason for incorporating. “To have access to funds and taxes that we were already paying as residents of the county and the state that we didn’t have access to,” he told interviewer Jacqueline Froelich. “Turnback fund is a general term for gasoline and excise taxes intended to be used for road maintenance.” Those turnback funds were $2,014 in April, when Holiday Island first appeared on the state’s municipality list, and $2,015 in May — somewhat less than many residents expected.

Kees said Holiday Island real estate is heating up, stoked by a pandemic-fueled realization that many workers can now work from wherever they choose to make a home.

Foes of incorporation fear legal complications from city government overlapping with the 50-year-old Holiday Island Suburban Improvement District, which has administered roads, water and sewers for decades.

Mingled local governments are already a legal issue in Cherokee Village (Fulton and Sharp counties), a planned community where Suburban Improvement District members have sued to avoid annual assessments for road costs under the theory that SID road fees are invalid in a municipal structure, where streets are paved with city dollars.

“I felt we should have held off on voting to become a city until we saw how the litigation went in Cherokee Village,” said Barbara Talbot, president of the Holiday Island Chamber of Commerce, a Hope native who returned to Arkansas for retirement, riding her three-wheel Can-Am Spyder through the grief of widowhood.

The city and the SID will be partners until the city can support services independently when the tax base grows sufficiently, said Mayor Kees, a retiree from Wisconsin and a veteran of the improvement district’s Board of Commissioners. The goal is to “better take care of the aging infrastructure in Holiday Island” and enforce standards and codes that were impossible under the SID.

Straddling the past and future stands Dees, who inspires devotion from new investors like Robert and Andrea Evans, who bought four shopping center properties off Highway 23 and recently opened the Corazon Grill. “Tom has been great, and we see a lot of potential in this area,” Robert Evans said.

Holiday Island 5th Monday 136029 Table Rock Lake map
<p>Table Rock Lake rose after the White River was dammed in the late 1950s.</p> ( Holiday Island Chamber of Commerce)

Business Momentum

The Evanses and other local business owners say an improving economy has made jobs hard to fill. Northwest Arkansas has the state’s lowest unemployment rate, and a Carroll County McDonald’s was advertising $300 hiring bonuses this month.

Construction activity has also increased, with a half-dozen houses going up now, and local businesses are reporting new momentum.

Tana and Jerry VanCleve are opening My Farmhouse Cafe & Bakery on Woodsdale Drive and renovating the closed motel next door, for example, and Traci Ram has opened Ms. Kitty’s Thrift Shop near Peachtree Village Assisted Living.

Brad and Donna Handley, owners of H.I.S.S. Security and HI Cleaning Services, are renovating a 2,700-SF parkside building to create a commercial indoor firearms range.

The commercial surge could build as tourists return to Table Rock Lake, Beaver Lake and Eureka Springs, the Victorian spa town 7 miles south that has been named one of America’s distinctive destinations by the National Trust for Historic Preservation.

At 80, Dees has outlasted his resort-marketing contemporaries. “Nobody would do this again these days,” he said. “It’s a dying breed, and I’m the last one.”

After taking over Holiday Island’s sales in 1980, Dees for years papered the American Midwest with 100,000 pieces of direct mail a week. Thousands of potential buyers flew in on a McCulloch Oil airliner for free lodging, golf and boat rides, and a chance to buy into “nature’s best domain for a second home,” the Ozarks. Somebody on Dees’ deep sales team would give them a pitch, and about a tenth of the prospects would buy.

Dees estimates that early Holiday Island owner McCulloch Oil Co. of Los Angeles and later a subsidiary spent $3 million a year for marketing and another $1 million putting visitors up in Eureka Springs hotel rooms, something that vastly improved the town’s tourist trade.

“We centered the promotion on Eureka,” said Gene Thompson, a longtime Dees associate and CEO of Holiday Island Holdings Inc., perhaps Arkansas’ smallest publicly traded company. (See Holiday Island History Ready to Burn.) “Those were busy times.”

Jay Nygaard, nursing a cup in the cafe of Sun Fest Market, described himself as a typical newcomer in those days. (The 27,000-SF supermarket anchors the commercial stretch, known as the Park, along with the 14,800-SF Powell’s Hardware and the 14,400-SF Dollar General.)

“I retired from South Dakota in 1984, got my real estate license and went to work for Tom,” Nygaard said. “Back then, they were just really starting to develop the island, blasting and putting in water and sewer, and building the golf course and the condos. We were marketing heavily, and we’d put people up for a few days and show them around. We had as many as 30 salespeople working out of the office, taking prospects on tours three and sometimes four a day.”

Those heady times ended when Dees ran out of the most desirable lots in the mid-1980s. Lots too mountainous to build on became inexpensive tickets to Holiday Island’s two golf courses, but their appeal has waned with golf’s popularity, leaving some residents to ask if the courses are worth the $250,000 a year or so in red ink that they run up.

Talbot, the chamber president, promotes Holiday Island as a “lakeside community” rather than a golf or retirement community. “I think it all flows from these beautiful waters.”

Holiday Island 5th Monday 136029
Condominiums and timeshares with 25-foot picture windows line the entrance to what locals call "the island," the part of Holiday Island surrounded by Leatherwood Creek and Table Rock Lake, which was formed by the damming of the White River. ( Kerry Prichard)

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Once a ranch with fishing cabins along a bend in the White River, Holiday Island saw a lot of horseback riding and other recreation in the 1970s. ( Holiday Island Chamber of Commerce)

Anglers’ Paradise

Former pro bass fisherman Jeff Fletcher, who grew up on Table Rock’s 800 miles of shoreline, recalled that fishing and horseback riding were the island’s first magnets. His father, legendary White River fishing guide J.D. Fletcher, bought acreage when the dams were being built and let the lake waters rise to him.

“My dad floated past the dams when they were being built, watching all the workers on the scaffolds,” said Fletcher, who described himself as a “laplander,” dwelling where Missouri “laps over into Arkansas.” Fletcher, once sponsored by Walmart on the Bass Anglers Sportsman Society tour, caught an Arkansas record 64.5-pound striped bass near Beaver Dam in 2002. Envision it, a 65-pound bass.

One of his running buddies growing up, Darrel Reddick, joined him in detailing the resort’s early days.

“Before it was Holiday Island it was Banach Island, and my granddad ran it as a cattle ranch, but they had fishing cabins and the whole area was sort of a fisherman’s paradise,” said Reddick, who owns Knuth Electric & Well Service in Eureka Springs and about 800 acres around Eureka Springs and Holiday Island.

Reddick’s mother, Linda Robinson, ran several enterprises on the island when her son was young, including the post office, the now-demolished yacht club and a convenience store. She moved to the area at 16 when her father went to work building Beaver Dam.

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A commercial strip along Arkansas Highway 23 was developed in the 2000s. ( Holiday Island Chamber of Commerce)

Holiday Island 5th Monday 136029
Holiday Island's Big Bass Tournament ( Kerry Prichard)

Island of the Apes

Reddick, Fletcher and Robinson had the whole cafe laughing about two of Holiday Island’s hairiest ambassadors back in the day: chimpanzees Magoo and Ruben.

The chimps belonged to Earl Tatum, a hauler of exotic animals and proprietor of the bygone Holiday Island Animal Park.

“Magoo would drink beer, but Earl told me he would only give him two because he’d get mean after that,” Fletcher said. “He also knew how to water-ski” on a special rig. The more sedate Ruben was a teetotaler terrified of water.

“Magoo would have bib overalls on and he’d go to the yacht club, but he had to pay for his beer,” Robinson remembered, saying he’d even demand his change.

“Earl would give him a dollar, and a beer was 50 cents,” Reddick said, jogging his mother’s memory. “Magoo would sit there and wait for that waitress to give his change back. If she didn’t, he’d slam his hand down on that bar with his palm up, wanting his change. No tipping.”

Dees remembers the chimps, the riverboat by the marina, and the many promotions that drew celebrities like Johnny Paycheck, Dottie West and Hugh O’Brian. There was even a piece of the London Bridge laid at the Ranch House, a 6,000-SF house originally built by Banach with facilities for employees to use as a vacation spot. It housed early Holiday Island sales operations and is now Dees’ home. (Robert P. McCulloch was famous for buying the bridge over the Thames and moving it at great cost to Arizona for the Lake Havasu City development, one of many properties Dees worked on.)

But his devotion to saving Holiday Island went far beyond preserving a colorful resort. Dees was upholding a creed passed down by his father, Will, a Mississippi County cotton farmer who saw a man’s word as his bond.

$10 Million at 12%

That principle led Dees to defy his bosses when they wanted to abandon the resort. One boss was Charles Hurwitz, a Michael Milken associate who had taken over McCulloch Oil, and Holiday Island along with it, on his way to a reputation for sharp elbows and a trail of takeovers, bankruptcies, scandals and plays with other people’s money.

In 1990, when Dees rode to the rescue, Holiday Island had about 2,000 residents; today’s population is estimated at 2,500. He said he couldn’t just abandon them.

“McCulloch said the litigation and liability would cost less than it would to build that place out. I said I disagreed, and they said, ‘Why don’t you just buy it, then?’ So I borrowed some money and bought it.”

It wasn’t just “some money,” though. It was $10 million lent at 12% interest by a half-dozen banks, led by the Bank of Bentonville, now Arvest. Daily interest came to about $3,300. “Every morning before I got out of bed my mission was $3,500 a day,” Dees said. “My wife should have left me.”

The wrecked real estate market after 2008 pushed Dees to relinquish several commercial properties to the banks eventually, including parcels in the 18-building commercial development.

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Hunter Thomas, left, was the winner of Holiday Island's Big Bass Tournament this month, hauling in a 4.8-pounder to win a
,000 first prize. ( Kerry Prichard)

Selling Fur to Alligators

“Tom Dees is a rare developer,” said Lee, the Berryville Chamber chief, one willing to pump money from lot sales back into necessities like Holiday Island’s water and sewage service, which runs to all 5,000 lots, often through paths blasted from igneous rock.

“The normal mode for developers is to come in and take the low-hanging fruit, sell the golf course property and the lakeside property and then leave town, not worried at all about infrastructure,” said Lee. “Tom took all the money and put it into roads, sewage, electrical and all that stuff you can’t see.”

John F. Cross, former president of the Bank of Eureka Springs, recalled in a 1988 remembrance that $7,280,000 in bonds was sold to cover the water and sewer costs, but “instead of $7.28 million paying off all the improvements, the cost went many times that.” The saving grace, Cross told the Arkansas Democrat-Gazette in 2002, was that “Dees could sell an alligator a fur coat. The guy is good.”

A native of Keiser (Mississippi County) whose only ambition was “to get out of the cotton patch,” Dees got a $100 scholarship to Arkansas State College in the late 1950s. He calls it the turning point in his life.

Asked by his aging father to stay close to home, Dees became a schoolteacher in nearby Dyess, the boyhood home of Johnny Cash. There he met his future wife, Kathy, who was still in high school. She was the only girl he ever dated, and now they’ve been married 57 years.

After earning a master’s degree at night, Dees found himself as vice president and financial chief at Arkansas College in Batesville, now Lyon College, while still in his 20s. The school’s namesake, Frank Lyon, informed him there was little money in education, even for a college president.

As his family grew with two daughters, Dees took a more lucrative job with John Cooper, the West Memphis physician who pioneered resort communities in Arkansas.

Cooper was a direct-mail trailblazer and a visionary of communities designed to lure the legions of prospering postwar workers looking ahead to retirement and relaxation.

Cooper Communities built Hot Springs Village, hiring Dees as its second employee, as well as Bella Vista in northwest Arkansas and Cherokee Village, east of Salem. A job in Cooper’s Bentonville headquarters first brought Dees to northwest Arkansas.

A tour around Dees’ office was like stepping back in time, crammed with mementos like a framed $100 check from Cooper, the payoff on a lost bet.

Over here, see pictures of Tom with Bill Clinton; Tom and Kathy with Asa Hutchinson; Tom and Winthrop Rockefeller.

In the corner, an image of O.J. and Nicole Simpson commands attention. Then there’s former Arkansas basketball coach Eddie Sutton, and ex-UA football coach Lou Holtz, who bought a townhouse on the island in 1981. Dees is in the frame, holding the clipboard as Holtz signs.

Donna Douglas, the former “Beverly Hillbillies” actress who worked for Dees on her way to a successful real estate career in California, is prominent. In the 1980s, she headlined the Holiday Island Arts & Crafts Festival.

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Table Rock Lake, along with two golf courses, is the main attraction at Holiday Island, and lakefront properties have largely been bought up. ( Kerry Prichard)

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The crystal clear lake was once a jewel largely for anglers, and still is, but recreational boaters, skiers and water sports are now more common. ( Kerry Prichard)

‘I’ve Had a Great Life’

Dees often objects when Holiday Islanders praise him, and he insists he’s no wealthy man. “I have debt up to here,” he says, gesturing to his forehead. “No, I’m not rich. It’s a different kind of wealth. I’ve had a great life, and I’m not picking cotton.”

He says he cares nothing about his legacy.

“I don’t want my name on anything,” he said, and until recently the only thing you’d see with his surname on it was Tom Dees Real Estate.

That changed this month when two of the island’s biggest employers, Brad Handley and Sheila Wolf, rededicated Veterans Memorial Park, opposite the commercial strip, as “Tom & Kathy Dees Veterans Memorial Park.”

Wolf, the owner of Wolf Wellness Center, which has grown to 18 employees over four years, praised Dees and Kathy for their tenacity and generosity and presented a crystal plaque from the Holiday Island Chamber.

“Tom would give a potential Holiday Island business owner the shirt off his back if it would help convince them to come be successful as a business owner here,” said Wolf, a former chamber president.

Handley, a former law enforcement officer with a growing security business and a handful of other ventures employing nearly 50 workers, made the decision to rename the park, which he bought early this year.

“I was against changing it,” Dees said. “Put my name on something, and somebody will probably tear it down overnight.”

He was wrong there. The next day, the sign was still standing, the Dees name intact.

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Greater Berryville Chamber of Commerce Executive Director Dean Lee with longtime friends Kathy and Tom Dees at a dedication of Holiday Island’s Veterans Memorial Park in their honor. Dees was initially against the idea. “I don’t want my name on anything,” he said. ( Kerry Prichard)

Holiday Island, a Timeline

From Bandy’s Bend to Shields Ranch to Banach Island, the northwest Carroll County acreage now known as Holiday Island has held many names, nearly all connected to the clear and frigid White River. The river, flowing south out of Missouri, rolled and swayed around the craggy Ozarks until it was tamed by U.S. Army Corps of Engineers dams built in the 1950s and 1960s.

Here’s a timeline of the land, 15 miles downstream from Beaver Dam and 7 miles north of Eureka Springs, and some of its human inhabitants, over the past 170 years.

1850s: The hard river bend that frames “the island” intersects with Leatherwood Creek a few miles below Missouri, and it was there that Hughey and Susannah Bandy settled with their family in the 1850s. Soon the area was called Bandy’s Bend. Outlaws killed Hughey Bandy in 1872, and he was buried with his two sons killed in the Civil War, James and Jackson, in a tiny fenced plot by the shoreline. When Table Rock floods, waters swallow the graves.

1868: Daughter Mary Ann Bandy marries Felix Grundy Burnett and the couple claim adjoining land, calling their spread “The Homestead Place.”

1938: Kansas oilman Richard H. Shields buys the spread from a Bandy descendant, Jeff Burnett. Shields builds a ranch for thoroughbreds.

1954: Chicago mortgage broker Henry S. Banach buys Shields Ranch and establishes a rustic “fisherman’s paradise” known as Banach Island Ranch Resort. Horses remained a popular attraction well into the 1970s.

1958: Table Rock Dam is completed, and Table Rock Lake slowly begins to fill up. Eventually the lake covers 45,000 acres and has nearly 800 miles of shoreline, mostly in Missouri.

1965: The Holiday Island name is born when the Holly Corp., owned by the Norsworthy family of Dallas, buys 5,000 acres, including Banach Island. The plan was to create a lake and golf resort.

1966: Beaver Dam is completed, and Beaver Lake becomes the area’s second great man-made reservoir, with nearly 500 miles of shoreline.

1968: The Norsworthys, lacking development capital, sell their acreage to McCulloch Oil Corp. of Los Angeles, better known as the maker of McCulloch chainsaws. CEO Robert P. McCulloch and employee C.V. Wood eventually created McCulloch Recreational Properties. MRP built resorts throughout the country, including Lake Havasu City in Arizona, which spent $10 million importing the London Bridge to Arizona brick by brick.

1969: McCulloch sells the first lot in Holiday Island.

1970: On July 21, McCulloch officially opens Holiday Island, with Gov. Winthrop Rockefeller and Wood placing a piece of London Bridge granite at the Ranch House. A suburban improvement district is formed to build water and sewer systems, as well as roads. The SID follows the model Cooper Communities used at Cherokee Village, Bella Vista and Hot Springs Village.

1973: Holiday Island’s first post office is dedicated.

1976: Rumors swirl that McCulloch will pull out of Holiday Island.

1977: Pratt Properties, led by Lorne Pratt, buys all the development’s assets, builds a sewage treatment plant and finishes the back nine holes of Holiday Island’s 18-hole golf course.

1978: Corporate raider Charles Hurwitz of Houston acquires 13% of McCulloch Oil stock from Black & Decker Manufacturing Co., which had inherited that share through its 1973 purchase of the chainsaw maker. Hurwitz fires all management-level McCulloch employees at the resort.

1979: All of Holiday Island’s homes are now on sewer lines. Pratt announces an agreement with McCulloch Oil, now owned by Hurwitz and renamed MCO, to purchase his interest in Pratt Properties. Hurwitz also raids Cooper Communities for employees, bringing in Tom Dees and George Billingsley Jr. to market Holiday Island.

1980: Dees is appointed to manage all of MCO’s real estate holdings, including Holiday Island and about eight other resorts and planned communities.

1990: MCO, renamed Maxxam of Houston, threatens to shutter the property, figuring the cost of building out would far exceed any legal liability to residents. Dees decides to buy the property and borrows $10 million to swing the purchase. He figures the interest on the loan at $3,300 a day.

2004: Dees announces the sale of 700 Holiday Island lots to a national marketer, National Recreational Properties of Irvine, California. The marketing company eventually returns the land, unable to sell it.

2006: Dees announces plans to build a commercial center on Highway 23, along the edge of Holiday Island, a $50 million shopping and services project that now includes a dozen or more businesses including a supermarket, dollar store and pharmacy.

2016: In the wreckage following the 2008 real estate crash, Holiday Island Development Corp. forfeits almost all its commercial property, including the supermarket property, to First National Bank of North Arkansas of Berryville and Cornerstone Bank of Eureka Springs.

2021: With home prices and lot sales rising at Holiday Island, residential construction has also taken off, with a half-dozen home projects underway this spring.

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