Pinnacle Group Buys Out Haynes: Rogers Developers Unify 445,000-SF of Luxurious Space

The Pinnacle Group hasn’t sold an inch of land, ever.

An investment holding company with an estimated $100 million in assets, the group has more than 20 limited liability companies under its umbrella including entities that hold more than 400 acres of primo real estate on the east and west sides of Rogers’ Interstate 540/New Hope Road interchange.

But the ownership in the portfolio was recently consolidated with the departure of Collins Haynes and his estimated 25-percent interest in two of the group’s signature subsidiaries: the $60 million Pinnacle Point Properties LLC and more than $10 million Pinnacle Air Group LLC.

Pinnacle Point is 300,000 SF of class “A” office and retail space, and Pinnacle Air, with three multimillion-dollar Learjets, is the state’s largest charter service.

The Pinnacle Group, led by principals J.B. Hunt, Tim Graham, Bill Schwyhart and silent investor Robert Thornton, bought out Haynes’ interest in the partnerships for an undisclosed sum. Hunt founded J.B. Hunt Transport Services Inc. in Lowell where Graham was also an executive. Schwyhart is an entrepreneur and former BMW dealer, and Thornton was one of Sam Walton’s early executives at Wal-Mart Stores Inc.

Schwyhart said the amicable buyout made strategic sense for the group. It now has about 445,000 SF of lease space under its exclusive control that’s built or near completion in a square mile of west Rogers. Schwyhart said the group expects to add another 1 million SF of office and retail space within the next few years to its Pinnacle complex portfolio, which includes Pinnacle Point, Pinnacle Hills and the proposed Pinnacle Promenade.

Haynes, who created what became the 65-acre Pinnacle Point in 1998 when he and Dave Watson assembled land parcels bought from the Pete Walsh family, has ambitious plans, too.

Haynes said he and his wife, Cynthia Haynes, and their son, Hunter, will maintain the Pinnacle Point office of their architecture firm, Haynes Ltd. Both Collins and Cynthia Haynes are architects, while Hunter manages their lease space and relationships with lenders.

But the family has formed Haynes Holdings LLC, an investment and development firm that Collins Haynes said will house the thrust of their commercial projects during 2004.

The Haynes family owns more than 387 yet undeveloped acres along the I-540 corridor in Benton and Washington counties. Haynes said the new firm isn’t seeking publicity, but his family cashed out at Pinnacle to better concentrate its attention on new developments.

“Our goal is to move ahead and develop commercial environments that are equal to, or larger in scope, than Pinnacle Point,” Haynes said. “We expect to be able to announce some projects this year that are moving ahead a lot faster than we anticipated.”

Haynes Holdings has relationships with six national leasing brokers, and Haynes said “preleasing” for some planned projects is “already ahead of schedule.” He declined to go into further detail.

Schwyhart said the roll-up of the physical property at Pinnacle Point from a couple dozen LLCs into one entity actually occurred in August. The Pinnacle Group’s partners and Haynes had a variety of individual relationships among Pinnacle Point’s properties that were shored up by the transaction.

“I’m just glad [Haynes] was one of the pioneers in this project here,” Schwyhart said. “Every time I go down this parkway, I know that he designed it. He has capacities for big picture design. Large tracts of land are like a blank canvas for a painting to him.”

Landing an Anchor

Schwyhart said a “premier fashion retailer” will be committed to the Pinnacle Promenade project by the end of the month. It will be a “full-size, full-line” department store. Names such as Neiman Marcus and Nordstrom have been bandied about locally, but Schwyhart declined to comment about any retailer.

He said all of the 300,000-SF Pinnacle Promenade shopping and dining center should open about the same time in early 2006. The project is between Pinnacle Point and Pinnacle Hills where The Pinnacle Group’s penthouse office sits atop the 100,000-SF J.B. Hunt Tower — a $15 million investment that opened last March.

The group refers to its complex collectively as “Pinnacle Hills,” although that component to date has primarily been an upscale residential development adjacent to Pinnacle Country Club.

“We will be teaming up with a major retail developer by the end of January,” Schwyhart said. “They will be coordinating the retail, and we will continue to develop the office space.”

Several well-known restaurant chains have expressed interest in the area, including several without an existing Arkansas presence.

Schwyhart said construction on two additional 300,000-SF office towers at the complex will begin in late spring. He’s reluctant to put a price on the Promenade, initially expected to be a $50 million investment, because its numbers have been climbing daily.

Benton County, Schwyhart said, is only at 61 percent of the national average for retail per SF per capita. That statistic, plus the area’s well-documented prosperity and population surge, are part of the Pinnacle team’s motivation for leveraging its finances and focus in west Rogers.

Steve Womack, Rogers’ mayor, said The Pinnacle Group’s “master planned” approach and its geographic advantage between the I-540/New Hope interchange and the one coming to Perry Road will help make Pinnacle “ground zero” for a retail revolution.

The mayor traveled in May to Las Vegas with The Pinnacle Group where they attended the International Shopping Center Convention.

“Other than the shape and the tenant structure, a mall is a mall,” Womack said. “[The Pinnacle Group is] trying to build a lifestyle center that creates an energy that makes people want to go there.

“You need the first big department store to announce their intent to build. Then it will become a track meet.”

Synergies Abound

Other infrastructure in the Pinnacle area includes:

• A $45 million Embassy Suites in Rogers, a 250-room hotel developed by John Q. Hammons Inc. that opened last May.

• Hammons’ $60 million plan to build a 250-room Marriott that will adjoin both the Embassy Suites and a 105,000-SF Pinnacle Hills Convention Center with 24,000 SF of meeting space.

• Fifty-five acres of commercial and 20 acres of multifamily property on the northeast corner of the I-540/New Hope interchange is being master planned by Pinnacle. Schwyhart said the commercial area is being developed for a “big box retailer.”

• St. Mary’s Hospital in Rogers plans to build a 500,000-SF facility by 2007 on the east side of I-540. The 200-bed project will mirror Embassy Suites on the west side of the highway and cost more than $140 million.

The arrival of the new hospital alone will bring 1,400 employees to the area daily. Susan Barrett, president and CEO of St. Mary’s owner Mercy Health System of Northwest Arkansas Inc., said she’s been impressed with the city, state and federal government cooperation that’s making Pinnacle possible.

Hammons, the hotel mogul, said the right infrastructure, corporate synergies and people are behind the success. He predicts the portion of the Pinnacle compound that’s east of the interstate will eventually eclipse the west side. Hammons said he watched traffic patterns carefully at Pinnacle when determining where he’d build.

“You have to read the tea leaves,” Hammons said.

Schwyhart said his primary job now is getting potential clients to Rogers to see the potential for themselves.

“My main responsibility is going to be to shepherd this,” Schwyhart said. “We are very particular about who we let in here.”