Mayor Baker suspicious of convention center proposal

Fort Smith Mayor Ray Baker deems suspicious the proposal by FSM Redevelopment Partners to convert the Fort Smith Convention Center into a city hall complex.

And at least three of the city’s seven directors are less than enthusiastic about the offer, with City Director Cole Goodman saying the proposal is not valid.

Owners of the Phoenix Expo Trade & Event Center made a proposal to buy part of the Fort Smith Convention Center and convert 40,000-square feet of the exhibit area into a new city hall. The letter from attorneys representing FSM Redevelopment Partners — owners of the Phoenix Expo center — note that an Oct. 25 meeting is already set on the subject, with a Nov. 1 deadline for the city to sign a non-binding letter of intent to pursue the offer. Also, the contract offer stipulates a 9.98% return “based on the total investment by Buyer for the acquisition, construction and conversion of the property …”  (Link here for the story on the proposal.)

“All proposals have merit, but one that affects a building dedicated to use by our citizens needs complete looking-into,” Baker said in a written response to questions from The City Wire. “Proposals out of the blue bear suspicion.”

City Director and Vice Mayor Gary Campbell said converting the center to a city hall “would have a very negative economic impact” and would be “counter to the economic development efforts of the City.”

Goodman, who stressed in his response that Fort Smith does need a city hall, said this proposal is not the best path to a municipal complex.

“The letter seems very generic to me with no real specifics, so to me is not a valid proposal. There are many unanswered questions to get answers to before any discussion on this can occur. There is no pro forma for costs to the city, whether budget neutral or advantageous to the city. With a guaranteed return to the developer of almost 10%, I doubt it is advantageous to the taxpayers,” Goodman noted.

City Director Kevin Settle said he had “major concerns about selling an asset and renting back for ourselves.”

All board members who responded to The City Wire said the Nov. 1 deadline is a deal killer.

“A Nov. 1 deadline is unreasonable,” noted City Director Bill Maddox.

Goodman: “I find the Nov. 1 deadline puzzling as no one can do any form of due diligence in two weeks. I doubt that this will be discussed at a board meeting prior to seating the new board in January.”

And Campbell suggested it would “probably require weeks of work just to explore the legal ramifications.” Settle said it is “unreal.”

Lance Beaty, a partner with FSM Redevelopment, said the Nov. 1 deadline can be negotiated to another date.

“Look, everything here is negotiable. This (letter) is just to get the conversation started,” Beaty explained.

Maddox, who will soon step down as a city director, kept the door open for the proposal.

“I expressed my interest in securing an outside operator many months ago and still have that interest. The above proposal is just part of the mix,” he said.