Developer pulls plans for renovation of Fianna Hills Country Club (Updated)

Editor’s note: See "Story Update" section for information from the Fort Smith Board meeting.

A proposed $20 million development of the Fianna Hills Country Club is no more after developer Lance Beaty of Fort Smith-based FSM Redevelopment Partners pulled the project from consideration at Tuesday's (April 1) regular meeting of the Fort Smith Board of Directors.

“I believe we had the vote (to approve a zoning request needed for the project to proceed). But it’s not just about the vote. It’s a business decision. It’s mathematics. … In a deal like this let’s say that 100 things have to happen in an ordered manner for this to transpire. We got to say, number 60 and determined that it was not a deal for us. It’s that simple. We’ve conducted due diligence on this for months, and our risk-weighted analysis is that it is not a deal for us,”  Beaty explained.

Beaty declined to comment about efforts in recent days to scuttle the project, saying instead that, “I may have some additional comments at the appropriate time, but before the vote, I think it unwise.”

Fort Smith City Administrator Ray Gosack said the Board could still take action on the issue. He said the Board could table it, vote on it as is, or amend it. Gosack said Fianna Hills Country Club Manager Jim Shields has asked that the zoning issue be tabled until the May 6 meeting. According to Gosack, Shields said that would give club owners time to determine if there is other interest in the property and to see if the zoning change would help with that interest.

The Fort Smith Board of Directors voted Tuesday (April 1) to table the proposed planned zoning district until owners of Fianna Hills Country Club can hear out offers from two other interested parties before moving forward.

Before the Board voted 6-1 to delay the PZD decision, City Director Keith Lau made his feelings known on the collapse of the planned development by Beaty and his business partner, Dr. Stephen Nelson, explaining that he had an e-mail from the country club's current owner threatening shut down should the PZD not go through.

"I have to operate on knowns and that's the known that I have to operate on the thought with my real estate experience that if that club goes dark, that if the golf course goes in disrepair, it is going to affect each and every property owner in Fianna Hills and I would hate to see that happen. That would be terrible. And in my guestimate, in my professional experience, that each and every owner will probably be dinged $10,000 worth of property up there and that's something that we can't allow."

Lau also said the controversy that erupted in the last several weeks surrounding Beaty's planned purchase and redevelopment of the club is an example of what drives investors and businesses to other cities instead of Fort Smith.

"I looked at it today and I'm thinking, 'What does this say about Fort Smith, how this all came down?' And people always ask me, 'You know, why isn't Fort Smith like Northwest Arkansas? Why isn't Fort Smith growing? Why aren't we doing what everyone else in the state is doing?' This is why we're not doing what everybody else is doing in the state. OK, what's wrong? It's our attitude, it's our what if it goes wrong attitude. What if we fail? It's not what if we succeed. I think everyone in this room thought that if this program that Mr. Beaty presented succeeded, that it would be an asset to the city of Fort Smith. I know it would have provided jobs. I know it would have provided economic development."

Lau also said he had a letter from the chief of staff from Mercy Hospital stating that the hospital supported the development, with City Director Pam Weber chiming in later to add that projects such as Beaty's now-scrapped plan were what would drive business recruitment in the region. During her remarks, Weber noted the far-reaching impact of the $20 million investment Beaty had previously been willing to make, asserting that the investment could have impacted the local economy by up to $60 million.

City Director Mike Lorenz said that contrary to what anyone may have thought, he and others were not opposed to the project, but instead to other land uses included in the PZD presented to the Board on Tuesday.

Also speaking at the meeting was Lisa Clay, who spoke with The City Wire last week and had a petition signed by more than 250 Fianna Hills residents asking that many conditional uses be removed from the proposed PZD if the Board were to approve it.

Clay did announce that she and several club members would meet with club owners on Thursday about purchasing the facility, though no formal offer is on the table.

Before the Board voted to table the item until the May 6 meeting, Lau attempted to rally support for voting on the PZD as presented, but received no support from fellow Board members. No further action on the item following the vote to table the issue.

Plans to redevelop the country club first came to light in November 2013 when Beaty confirmed that he and business partner Dr. Stephen Nelson were working with club owners David Mille and Jim Shields to purchase not only the club, but also the 18-hole golf course.

It was the second major planned investment for Beaty's company, which purchased the 35-acre site of the former Phoenix Village Mall when it was nothing more than a poorly-maintained site that included about 10 acres of structures. Since Beaty's purchase of the old mall site in January 2009, FSM Redevelopment Partners invested more than $10.5 million worth of improvements at the site, including a successful expo center that was open for about three years before closing to make room for a regional service center operated by Health Management Associates. In all, the former mall now houses more than 1,100 jobs.

The proposal from Beaty for the country club included the addition of guest suites for use by members and their guests, as well as the addition of a medical concierge service and other upgraded amenities. The country club would have also been gutted and rebuilt on its original footprint, expanding from a current square footage of 27,000 square feet to 85,000 square feet.

As part of the revamp of the club, FSM Redevelopment had developed a business plan that would have members joining the facility for a $30,000 fee that could be paid out over time, similar to the membership fee members of the club have already been paying. In order to make the club a reality, Beaty had said he would need about 500 commitments with individuals making refundable deposits of $1,000.

While there was some vocal opposition to Beaty's plan for Fianna Hills Country Club, things appeared to be moving in the right direction on March 11. It was on that evening that the Fort Smith Planning Commission approved a planned zoning district at the site of the country club by a vote of 9-0.

As the project moved closer to Tuesday's vote, more opposition started making their voices heard and left the project in limbo.

In statements to The City Wire published March 17, there was not a consensus among the Fort Smith Board of Directors on whether or not the PZD would pass the final hurdle of Board approval. Fort Smith Vice Mayor Kevin Settle said while he supported some aspects of the club, including the renovation and addition of member suites, he had about other uses included in the PZD.

"The concerns that have been brought to my attention by many citizens in the Fianna Hills area are the other potential developments that are being asked in the PZD. These other potential developments are something that I am going to research and get a better understanding on how they could affect the existing homeowner property values."

Fianna Hills resident Lisa Clay was among those expressing concern about the proposed uses within the PZD. Clay eventually launched a petition which garnered more than 200 signatures asking the Board to pass an amended PZD that would have removed several land uses.


Pat Ross, president of the Fianna Hills Property Owners Association, said a conversation with Beaty occured in which Beaty allegedly said he would turn the site into an office complex. Beaty said March 27 that Ross' allegations were "simply not true or is completely out of context."

Clay said at the time that she would like to have a company come in and keep the country club just that, adding that she was aware of companies interested in purchasing the facility. But when reached for comment, Mille said no other buyers had approached him about purchasing the country club, which he said is heavily subsidized by his other business ventures, which include Mid-South Steam Boiler and Engineering.


He also said that should the Board not approve the planned PZD for the land he currently owns, he would not waste any time shutting down the country club.

“It’s not an idle threat. I assure you. My problem is that I’ve been subsidizing the operating capital of that club for years, and it’s gotten to the point that it’s taking a toll on me financially. And if he (Beaty) doesn’t buy it, i’m going to close it immediately.  … when it starts to hurt your other businesses, I mean, I’m just not going to do it anymore.”

Continuing, Mille noted: “These people opposing this and spreading rumors and bad information to try to stop this, they don’t see what they are doing to Fort Smith. I have a lot of friends who are members there and I enjoy having a place for them to buy a drink or whatever, but I can’t keep subsidizing all that just because they are friends. … Nobody is lining up to do this (buy the club), and so if this (Beaty plan) doesn’t work, you’ll see a lot of weeds and grass on the course, because I’m not doing it anymore.”