Beaty Capital Group makes a second offer to buy the Fort Smith Convention Center

by Talk Business & Politics staff (staff2@talkbusiness.net) 456 views 

Lance Beaty, one of the developers behind the renovation of Phoenix Village Mall and who is now in the process of redeveloping the Masonic Temple in downtown Fort Smith, has renewed his 2010 offer to buy the Fort Smith Convention Center from the city of Fort Smith.

Beaty, through the Little Rock-based law firm of Quattlebaum, Grooms & Tull, sent a letter dated Jan. 26 to Acting City Administrator Jeff Dingman that is a “re-submission of our October 15, 2010 proposal, wherein BCG (Beaty Capital Group) would acquire the Fort Smith Convention Center and certain contiguous property now being used for parking.”

The Fort Smith Board during a Tuesday study session discussed the issue with some Directors wanting a future review of the offer. However, the Board did not set a date for further discussion. Beaty’s letter set a Feb. 17 deadline for the city to respond. The city in 2010 rejected Beaty’s offer with little to no formal discussion.

BEATY BACKGROUND
Beaty is also a managing partner with FSM Redevelopment, which purchased the 35-acre and almost abandoned Phoenix Village Mall in January 2009 After investing more than $16 million in the property, the location is now home to more than 1,200 jobs. Dr. Steve Nelson of Fort Smith is also a partner in FSM Redevelopment.

The two largest employers at the Phoenix Center are Sykes Enterprises Inc., a Tampa, Fla-based outsourcing operation employing more than 600 in their Fort Smith center, and a Shared Services Center owned and operated by Community Health Systems Inc. of Franklin, Tenn.. The shared Services Center employs approximately 600 full-time employees in an almost 90,000-square-foot portion of the property.

Through Temple Holdings LLC, Beaty acquired the Masonic Temple on Nov. 6, 2014. in a more than $2.5 million deal that includes property acquisition and redevelopment costs. Beaty Capital Group, which is owned by Beaty, financed the deal.

Beaty told Talk Business & Politics that a possible part of the convention center acquisition would be to convert half of the 40,000 square feet of exhibit hall space to offices for the city. The ceilings are high enough that “you could essentially build a building within the building” and create 60,000 square foot of office space. The city now leases around 32,000 square feet of space from the Stephens Inc. building on Garrison Avenue. Dingman said a rough estimate on combined city office space needs would be between 40,000-45,000 square feet.

The ArcBest Performing Arts Center – and associated parking – does not have to be part of the deal, Beaty said.

“That’s to be negotiated,” he said.

THE RENEWED OFFER
Beaty said his plan could help consolidate key city offices into one area, and he believes that would benefit staff and citizens.

“In every other business in the world, it (convenient and consolidated offices) increases production, increases efficiencies, and I can’t imagine that that would be any different for the city,” Beaty said.

Continuing, Beaty told Talk Business & Politics: “I do think that it’s important to note is that what we are proposing is not an elimination of the civic center. What we are proposing is a modification of the center so that it has a mixed use.”

Beaty also noted that the city has spent “several millions of dollars” on upkeep of the convention center since his last offer.

FORT SMITH BOARD RESPONSE
At Tuesday’s Board study session, Director Keith Lau suggested the Board make room on a future agenda to discuss Beaty’s interest in purchasing the Fort Smith Convention Center.

None of the City Directors were ready to endorse Beaty’s proposal openly. Vice-Mayor Kevin Settle said he would not feel comfortable commenting as he hadn’t had time to look at the proposal before Tuesday’s meeting. Director Mike Lorenz agreed.

“It kind of came out of nowhere,” he said. “I don’t know if historically this is something that has been done in other areas, what the benefits or the possible consequences are. I think everything is worth discussion.”

Lau believed it “needed to be discussed,” not necessarily for a decision on Beaty’s proposal, but “to see if it’s worth the effort and beneficial.”

“I just want to open it up and see if this is a decision where, can we possibly consider moving city offices? Can we consider repurposing the space so that it’s a quasi-city office/quasi-convention center, and is there a possibility of finding money to put towards our LOPFI problem? Could we eventually have the best of both worlds by having a multipurpose Convention Center-slash-office?”

Director Andre Good, building on Lau’s thoughts, said the Board “should have that discussion and in that discussion I’d like to point out why I think we could have the best of both worlds.”

Pennartz believed that when the Board did take up the subject, “the whole continuum of options should be looked at, from not having a convention center to having one and then the in-between options of what that would look like.”

“So I’m not interested in responding by that (Feb. 17) time period, but I think the idea should certainly be discussed by the Board,” she added.

Director George Catsavis was not aware of the letter of intent at the time of Tuesday’s meeting, and Director Don Hutchings was not in attendance.

The city subsidizes the Fort Smith Convention Center to the tune of $777,000 per year, a figure that doesn’t count additional in-kind services, such as water and sewer that the city also provides.

The Fort Smith Board of Directors may soon consider a prepared food tax to help shift a the $777,000 city budget expense that could then be used to help the city address a looming shortfall for payments into the police and fire (LOPFI) pension fund. The LOPFI fund requires approximately $2 million per year in order tp remain solvent for the foreseeable future, and it was a source of debate during budget deliberations for 2016.

Beaty said Tuesday he is not willing to predict how the city will respond.

“I can’t speak for what the city will or won’t do, but i can tell you it is certainly a legitimate proposal. … We’re interested in a fair appraisal,” Beaty said. “We’re certainly ready to engage and answer all the questions that will be raised. The city will be prudent, and we will too. It has to be a win-win. It has to be a good public-private venture.”

Comments

comments