HOT SPRINGS -- A day after the Hot Springs Board of Directors accepted a counteroffer to purchase the Majestic Hotel complex, its seller was fined $3,000 in Garland County District Court for six building code violations on the property that he likely will not have to pay.
Garrison Hassenflu, incorporator of Park Residences Development LLC, which owns the Majestic Hotel complex, pleaded no contest to the violations, City Attorney Brian Albright said Wednesday.
"The fines will be $500 per count, plus court costs, unless we close on the contract to purchase the Majestic Hotel. If we close on the contract, the fines will be zeroed out," Albright said, adding that the sentence will be suspended for 30 days to allow for the closing to take place.
The Hot Springs Board of Directors accepted a counteroffer made Tuesday by Park Residences to pay $680,000 against the purchase price of $2,032,000 for the property, with the $1,352,000 difference being considered a donation from the seller to the buyer.
The original request from Park Residences was for the city to pay $680,000 for the property, which the Hot Springs Board of Directors approved at a special meeting called July 2. Instead of accepting that offer by a deadline of 5 p.m. Tuesday, Park Residences made the counteroffer at 4:15 p.m.
Cynthia Stone, with The Arc of Arkansas, said Hassenflu paid "a nominal" amount a few years ago for the property, which The Arc had unsuccessfully attempted to convert into an apartment complex for a few years.
"We were just not able to do it and wanted to get out from under the liability," Stone said Wednesday.
The "yellow brick" portion of the complex burned on Feb. 27, 2014, and was razed on Feb. 28 and March 1 in the interest of public safety. That building was condemned by the city board in March 2014 and the remaining structures were condemned earlier this year.
A cleanup plan of the razed building was approved by the Arkansas Department of Environmental Quality late last year, but none of the debris was removed. The owner was also previously cited for several code violations regarding the buildings and admitted that they were unsafe.
In addition to zeroing out the six fines levied against Hassenflu on Wednesday, a condition of the sale includes being released upon closing from any environmental liabilities by the state environmental agency, the U.S. Environmental Protection Agency and the city regarding a portion of the property.
Under the terms of the Park Residences offer, the seller will furnish a policy of title insurance in the amount of the purchase price, and taxes and special assessments due on or before closing will be paid by the seller. Insurance, current general taxes and special assessments shall be prorated as of the closing.
All fixtures and attached equipment, if any, and any other items bolted, nailed, screwed, buried or otherwise attached to the real property in a permanent manner are included in the purchase price, and the property is being purchased in an "as is" condition. Any risk of loss or damage to the property by fire or other casualty occurring prior to the closing is assumed by the seller.
The city issued a statement late Wednesday that "would-be trespassers or vandals are cautioned against entering the Majestic Hotel complex, removing anything from within its perimeter, or damaging the property in any way."
City officials said several city departments received phone calls Wednesday from residents asking about either buying or taking items from the property.
"Trespassing has also recently taken place, along with windows being broken by rock throwers. Criminal mischief, criminal trespassing, and commercial burglary are offenses that carry fines and/or jail time if convicted," officials said in the statement.
Also Tuesday, Mayor Ruth Carney shared an email exchange with The Sentinel-Record that suggests a company, Sari & Co., could take on the revitalization of the Majestic Hotel.
The company, according to the email, has an $18 million redevelopment deal in Shreveport and a $12 million redevelopment deal in Texarkana, Texas. The Texarkana deal involves Hotel Grim, a building in "much worse condition" than the Majestic Hotel, according to the email.
State Desk on 07/11/2015