Johnny N.T. Nguyen and Chao M. Do received approval from the Fort Chaffee Redevelopment Authority (FCRA) real estate review committee on Thursday (Aug. 9) to resell 14 acres purchased in 2015 to Bennie Westphal. The $375,000 purchase price, once executed, will be Westphal’s entry into commercial and residential development in the Chaffee Crossing district.
The 14 acres are located along Roberts Blvd. and Wells Lake Rd. Nguyen and Do purchased the property three years ago at a price of $280,000. Terms of the deal allowed FCRA right of first refusal to repurchase the property at the original price. Given Westphal’s track record and the slim margin of profit for Nguyen and Do, the committee gave its blessing. However, Rod Coleman of ERC Holdings said such situations may not always be in the trust’s best interests.
Coleman has spent several million dollars on residential and commercial developments at Chaffee Crossing, such as The HUB at Providence, an $11 million “live-above-retail” development which recently broke ground. Coleman had an offer and a development plan ready to go on the 14 acres had the trust decided to repurchase the land.
“Keep in mind, we’re taking property and allowing it to be resold at profits that were never intended. It does not bring economic development to the table or put it on the tax rolls. It allows people to make a decision, tie up property for years, spend money, and then decide they don’t want to do it or can’t for whatever reason, so they’ll go ahead and sell it,” Coleman said.
He continued: “As we come up with a lot of different properties, that’s going to become an issue. Does the trust want to take that risk to buy some of these properties back? That’s probably not the case in this one because the risk factor is so low. But it is a possibility that’s out there, and I think you’re going to see — particularly on some of the big commercial lots — that after we’ve come out here for 10 years and worked to put all the housing up, prices will triple or quadruple and (landowners) will sell for a profit that, to be honest with you, was due to this trust.”
Westphal could see Coleman’s part of it, and emphasized to the board he just saw the deal as “an entry-point” into Chaffee Crossing.
“Please understand,” said Westphal, “if I don’t get in on this deal, it doesn’t mean I wouldn’t come in with something else. I’m 100% behind whatever you all think is best at this time.”
With the approval, Westphal plans to put in some commercial “upfront” on the Wells Lake side. No tenants are signed up, but to give an idea of what he envisions, Westphal mentioned “getting something like a Sweet Bay in there.” He also said he hoped to work with Coleman to build out the area and estimated it could take around two years before the development plan comes to fruition.
Before the deal can be final, the FCRA board will have to approve the real estate review committee’s recommendation. The final vote will occur at the meeting next Thursday (Aug. 16).
Westphal has an ownership interest in Natural State Media, the parent company of Talk Business & Politics.