HOT SPRINGS – A $ 2.17 million offer for the Majestic Hotel property was filed on Monday, less than 36 hours before the Hot Springs board of directors met for a $ 2,163,128 offer Consider buying the property and converting it to an outdoor venue.
City Manager Bill Burrough said VIPA Hospitality Management’s offer came shortly after he and Mayor Pat McCabe held a conference call Monday morning with Rick Wilson, President and CEO of RA Wilson, and with Peter Lane, President and CEO of the Walton Arts Center, had completed. RA Wilson’s $ 2.16 million offer is on the city council’s agenda tonight.
VIPA’s proposal was delivered to City Hall on Monday, but Burrough said the company indicated in an email it received Sunday evening that it would make an offer.
The real estate deal, which the board of directors will review tonight, provides that RA Wilson will purchase the property solely for the purpose of building and developing an outdoor venue. The company must provide the venue operator with an agreement before the sale can be concluded in accordance with the contract.
The Walton Arts Center, which operates the Walmart Arkansas Music Pavilion in Rogers, has held discussions with RA Wilson regarding the operation of the 6,000-seat venue proposed for the 5 acres of Hot Springs Town on Park Avenue.
Vijay Patel, CEO and President of VIPA, said the city has been aware of his company’s interest in the property for more than two years. An email he sent to Burrough in August 2019 indicated VIPA’s interest in buying the property at the value determined by the valuation firm that the Garland County’s appraiser’s office has contracted with .
The $ 2.17 million offer is part of the Falling Water Resort at the Majestic offer that VIPA presented during public planning meetings in April 2019. A company affiliated with VIPA acquired the Medical Arts building at the beginning of this year. Parth Patel, President of Development at VIPA and son of Vijay Patel, told The Sentinel-Record that he plans to build a Marriott Aloft hotel in the 16-story Art Deco building.
“I made the purchase offer long before that, in August 2019,” said Vijay Patel, whose company has developed or acquired more than half a dozen hotels in the Hot Springs area, including Home2Suites by Hilton Hot Springs on Lake Hamilton. “I was in the game before the Amphitheater boys were in. My offer wasn’t even accepted. No response from the city manager, city mayor or city council.
“All I want is the recognition that I want to buy it like everyone else wants to buy it. It’s public land. I have assets in Hot Springs. I am interested in our state. I have a vision of what to do that has been presented to the public. “
Burrough said Monday that Patel’s August 2019 email came at a time when the city was weighing the feasibility of ideas presented during public planning sessions held by the University of Arkansas’ Fay Jones School of Architecture at the Hot Springs Convention Center moderated.
“At that point we weren’t in the market to sell the property,” he said. “We wanted potentially some kind of long-term lease, but we didn’t know what the market would have in store for this location. We heard great ideas. ” [during the public planning sessions], that was everything from a hot air balloon ride to a resort hotel. “
VIPA did not respond to the city’s two tenders last year. The submission by Grand Point Investment Group and Cienda Partners for a $ 110 million hot spring water resort was the only proposal the city said responded to their two requests. The Dallas-based group and Colorado-based DHM Design, who suggested designing a hot spring pool complex that the city needed to find investors, were the only responses to both inquiries.
The board abandoned Grand Point and Cienda’s proposal in March after questioning the Dallas Group’s resources to implement its proposal. RA Wilson made his offer public the following month.
“With all due respect to Mr. Patel, you have not submitted a project on any of these proposals,” said Burrough of the two tenders. “There was no suggestion to consider. We are in these negotiations with RA Wilson today, and we have another offer which I would consider possible in the eleventh hour.
“I think, as a board member, he has to think about what’s ahead of us today before we can consider another offer. My recommendation is that you move forward with any decision you will make with Mr. Wilson before making any other offer. “
Patel said the time was not the right time for VIPA to submit a proposal. Lenders have been reluctant to fund hospitality projects amid the economic uncertainty caused by the pandemic, he said, adding that many hoteliers default on loans as occupancy rates change due to changing consumer patterns and public health guidelines , which restrict travel, collapsed.
The Patels said they asked the city in March 2020 to postpone the application process for a year.
“Last year it would have been impossible to get funding,” said Vijay Patel. “There weren’t any banks willing to pay a cent for anything to do with tourism.”
He said his offer should be considered, even if it was made the night before the board meeting.
“It’s not the timing that I wanted to submit at the last minute, but this was the last day,” said Patel. “If I didn’t act, it would be done forever. I wanted at least a chance to buy the property before the city actually sells it. The city should be respectful of looking at my offer and giving me a chance. I was happened to be here and found out that the city meets [today]. This is the only day I was able to trade so I decided to make the offer. “
Wilson questioned the timing, noting that the contract the city received on Monday did not specify what would be built on the site.
“I think the timing of the offer is very suspicious,” he said. “Mr. Patel had plenty of time to develop his hotel plan, which includes parking, traffic, mobility, daytime traffic and disruptions, and submit it to the city along with his offer, but decided not to do so or provide this supporting detail. It suggests that it should be nothing more than an obstacle to personal improvement.
“For this to be credible, given the details and planning that our professional team created and provided to the city council, and the review by the board, is very skeptical,” said Wilson. “I think the board will recognize the same thing that it is unrealistic.”
Wilson expressed skepticism about VIPA’s intention to build two upscale hotels close together.
“How much sense does it make to build two high-end hotels within one block?” he said. “Now they’re going to build a high-end hotel at the Majestic. It would be the same as deciding to buy the Arlington Hotel, demolish it, and build a second amphitheater.”
Burrough said he would recommend that the board consider Wilson’s offer before considering subsequent offers.
“I have great respect for Vijay and Parth Patel and I am very grateful for what they are doing in our community and for their recent purchase of the Medical Arts building,” he said. “It’s nice to know that they have an interest in doing more things in Hot Springs City.”
