The City Wire Business of the Month: FSM Redevelopment Partners

Editor’s note: The City Wire highlights each month a business operating in the Fort Smith region. Business struggles, accomplishments, philanthropic support and many factors are considered when selecting a business to profile. Input from The City Wire readers also will be considered.

Once THE bustling mall operation in Fort Smith, Phoenix Village Mall fell victim to the city’s eastern migration of retail to Central Mall and Rogers Avenue. With few tenants, the former owners fell into financial trouble, and the property was eventually placed in the hands of a California bank.

But in January, FSM Redevelopment Partners LLC purchased the 35-acre site — bounded by Phoenix Avenue on the south, Towson Avenue on the east and Wheeler Avenue on the west. The site contains more than 10 acres of structures and was the first enclosed mall constructed in Arkansas.

FSM Redevelopment Partners is an affiliate of Bentonville-based Nelson and Beaty Properties. Stephen Nelson, a Fort Smith physician, and Lance Beaty are general partners in Nelson and Beaty Properties. In announcing the deal, Beaty said everyone should soon expect demolition, new tenants and an improved look through greenspace.

The demolition happened almost immediately, and the new or announced tenants include Bentonville-based Gusano’s Chicago Style Pizzeria, Aflac Insurance and Veterans of America. Gusano’s will lease more than 6,000 square feet and is expected to open by mid-January 2010. Along with Big Al’s Famous BBQ (located on the property in the former Shoney’s site), the redevelopment will offer more dining options for those who live and work in the area.

Another restaurant group is “seriously looking” but there is no deal yet, Beaty said.

“I am pleased with the interest and the number of calls we are getting, even in the ‘Ugly Duckling’ stage of our work,” Beaty said.

Beaty said the investment in the property is “creeping past” the $6 million mark, and “is just getting wound up.” He said the next “dramatic visual development” will be the remodeling of the existing strip center that remains. He said that work should begin by late September, with renovation finished by late November.

Since the purchase in January, 2009 FSM Redevelopment Partners has completely remodeled the 115,000-square-foot building formerly occupied by Woolco Stores/Venture and Atwoods. FSM demolished approximately 75,000 square feet of buildings that were “beyond salvage.” A modified part of the redevelopment plan includes creating an “Event Center” in a more than 50,000-square-feet of the former main mall building.

Merrill Kelly, vice president of American Family Brands, the owner of Big Al’s Famous BBQ which recently located in the remodeled Shoney’s restaurant on the Phoenix property, said business is starting to come to the restaurant. Kelly has been surprised at the number of people who say they came to see the redevelopment and found the restaurant by accident. Kelly said a new marketing campaign and menu expansions also are driving traffic.

“I have been very pleased with the recent addition of our old fashioned burgers and our fried catfish platter. Both have been crowd pleasers. We’ll always be known for our famous wood-fired BBQ, but broadening our menu has substantially increased our traffic at the restaurant,” Kelly said.

Beaty said he is not concerned about entering into such a large commercial venture in the midst of an economic downturn. He said relatively lower property and renovation costs will allow for lower rents for quality commercial space.

“It will work because we’re delivering value to the market. We’re delivering a nice product at a significantly lower occupancy cost,” Beaty explained. “That model works day in and day out regardless of what the economic conditions are.”