The company that took a financial gamble on what has proven to be a successful makeover of the former Phoenix Village Mall property may soon invest at least $7 million in the acquisition and renovation of the Fianna Hills Country Club in Fort Smith.
Lance Beaty, a partner with Dr. Stephen Nelson in Fort Smith-based FSM Redevelopment Partners, has confirmed he is working with club owners David Mille and Jim Shields on buying the club and 18-hole golf course. Both sides are in the due diligence phase, with a goal to close on a deal before the end of the year.
Professional service firms working with Beaty during due diligence include Van Buren-based Burrough Brasuell Corp., Rogers-based HP Engineering Inc., and Fort Smith-based The Hill Firm Inc.
In January 2009, FSM Redevelopment Partners purchased the 35-acre former Phoenix Village Mall in west Fort Smith. When purchased, it was a poorly-maintained site that contained more than 10 acres of structures on about 35 acres.
Since that time, FSM Redevelopment Partners invested more than $10.5 million in improvements, 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. The service center is expected to employ at least 500. Including the HMA jobs, the Phoenix area is now home to more than 1,100 jobs. FSM Redevelopment still owns the mall site and continues to make improvements there.
Shields told The City Wire on Tuesday (Nov. 19) that he and Mille, head of Van Buren-based Mid-South Steamboiler & Engineering Co., are working with Beaty on the possible transaction. Shields, who recently turned 70 years-old, and Mille have owned the more than 40-year-old club and course since 2003. Shields said it’s time to hand the club over to a new owner with a new vision.
“It’s like raising a kid, because there comes a time when you and the kid need to separate,” Shields said.
MAJOR RENOVATIONS NEEDED
Shields said there have been several renovations made to the club in recent years, including a major overhaul of the golf course, but he said it needs much more.
“This place is due for a major renovation,” he said.
And that’s what Beaty and Nelson have in mind if the deal goes through.
Beaty would not go on the record with specific plans, but said the club will be “extensively” gutted and modernized. The investment may include a renovation of the pool area and “significant” expansion of meeting, dining and other spaces.
If the deal closes by the end of the year, Beaty estimates a design and facility plan will be complete by April 2014, with bids going out in May. New construction and renovation of existing facilities could begin in early summer, with the work completed by Fall 2015.
Shields said Beaty will “bring a new perspective” that most of the about 345 club members will like.
“People who know Lance know that he’s not coming here just to sit on his hands,” Shields said. “Yes, we will have a few naysayers, but I don’t expect many. I think in general it will be received very positively.”
Beaty will need a positive reception.
The club has struggled in recent years with membership and revenue. According to an IRS report for the club’s fiscal year ended June 30, 2011, the club posted revenue of $1.9 million, down from the $2.046 million in the previous fiscal year. The revenue in the year ended June 30, 2012, fell to $1.693 million.
Also, membership revenue in the 2012 fiscal year was $858,484, down from the $1.035 million in the 2011 fiscal year.
The trend nationwide has not been positive for the golf industry and associated clubs. The National Golf Foundation has reported that the number of people who play golf has dropped from 30 million to 26 million since 2000.
But Beaty does not believe the industry trends are a deal breaker. His model, similar to that he pursued with the Phoenix Mall property, is to “reposition” the club in a manner that expands the demographic reach and revenue sources.
“That’s the key to this, to reach a different, a younger audience and demographic. And just like we found out with the expo center, there will not be another venue in this market that will provide the range of amenities, event and social activities that we will have here,” Beaty said.
Also, Beaty noted, the supply of such facilities on geography that overlooks a large portion of Fort Smith is limited.
“This is hard and expensive property to replicate. And it has got good bones,” he said.