$40 million hotel development closer for Phoenix renovation

Not only is the newly renovated Phoenix Expo Trade & Event Center finding success booking events, but the owners say they are close to landing a “very reputable” hotel chain operator interested in building a 275-room hotel at the center.

Lance Beaty, a partner in FSM Redevelopment Partners, told The City Wire they are far enough in the process that they’ve had to contact Fort Smith city officials to work out potential infrastructure details.

“We have not signed a deal, but I would say that developmental activities are taking place and we are generally along the track of putting this hotel together,” Beaty said. “The thing with this type of activity is that there are a 100 things that have to happen, and maybe we are on 21.”

If 21 gets to 100, the hotel chain would invest up to $40 million on the 275-room project, Beaty estimated. Also, the 275-room hotel would be the largest in the city, he said. (See computer renderings of the project at the end of this story.)

In January 2009, FSM Redevelopment Partners LLC purchased the 35-acre former Phoenix Village Mall — bounded by Phoenix Avenue on the south, Towson Avenue on the east and Wheeler Avenue on the west. The once poorly-maintained site contained more than 10 acres of structures and was the first enclosed mall constructed in Arkansas. During the past 18 months, Beaty said about $8.5 million has been invested on the site, with much of that to create a modern meeting and convention center.

Beaty said in March that FSM Redevelopment had entered preliminary negotiations with several hotel chains. As interest increased for the expo center, that has created the demand for a hotel.

“We’ve been very pleased with the interest received with the expo, and we are getting a lot of requests and questions about a hotel,” Beaty said. “If you’re bringing in hundreds or thousands for an event, you are going to get that (hotel) interest.”

Adding a hotel is proving to be a tedious process that includes working out development details with the city and pursuing contract negotiations with large businesses and organizations in the area to get them to commit to some level of business with the hotel and expo center. Water and sewer infrastructure is the top issue, however.

“Our biggest concern right now is just addressing what type of infrastructure needs to be addressed. Some of that in that area is getting old and we’re not sure it can handle that type of density,” Beaty said.

A July 22 letter from Steve Beam, vice president of Rogers-based Crafton Tull Sparks, to Wally Bailey, director of development services for Fort Smith, began the process of working with the city.

“General speaking, we think the hotel would be 7 stories total, 6 floors of rooms with a ground floor including concierge, restaurant, bar, break-out rooms, etc. The parking area in front of the Expo Center & hotel would have to be reconstructed to improve traffic patterns in front of the two,” Beam noted in the letter.

Beaty said the target date to open a hotel is January 2012, meaning construction must begin in early 2011.

Although most large hotel chains prefer to locate near an interstate, Beaty said the expo location has not been an issue with the 4-5 hotel chains they targeted.

“Just look at a map and anyone can see our location is quite easy to get to. You have great east-west corridors and great north-south corridors coming to this area. Our ease of access from just about any direction is an asset, not a problem,” Beaty said.

Work on the Phoenix Expo center is almost complete, with “final finishing touches” on the kitchen area and some interior work remaining, Beaty said. The exterior facade of the expo center will be refurbished and improved with or without a hotel. Beaty said they are waiting on a hotel decision so the expo facade will provide “architectural balance” with the hotel design.