FORT SMITH -- The city of Fort Smith decided against selling the property that was meant to be the site of a sport complex.
The city's Board of Directors on Tuesday voted 3-4 against a resolution accepting a bid for about 68.15 acres of city property at Chaffee Crossing, about 62 acres of which was formerly designated for the defunct River Valley Sports Complex project.
The Arkansas Democrat-Gazette previously reported that the developers of the River Valley Sports Complex -- then-state Sen. Jake Files and his business partner, Lee Webb -- approached the city in 2014 looking to build a tournament-quality complex of eight ball fields and amenities to draw in softball and baseball teams from around the region as an economic boost to the area.
The city budgeted $1.6 million for the project, with the stipulation that Files and Webb complete it by June 2015 with donations of materials and labor. However, they missed deadlines that city directors continued to extend until the end of 2016. It was at that point that Files and Webb expressed their desire to withdraw from the project.
Files and Webb had spent $1.08 million of the city's money before city directors voted to terminate the agreement with the two in February 2017. They also demanded that Files and Webb return the $26,945 in state General Improvement Fund grant money they received for infrastructure work.
On Jan. 29, 2018, Files pleaded guilty in U.S. District Court to wire fraud and money laundering over receipt of the grant money. He also pleaded guilty to bank fraud for pledging a forklift he did not own as collateral for a bank loan. He began serving an 18-month sentence in August of 2018.
Files moved from a federal prison in El Reno, Okla., to a halfway house in Little Rock earlier this year in preparation for a Nov. 11 scheduled release. Charlie Robbins, public information officer for the U.S. attorney's office, confirmed on Nov. 26 that Files was released that day.
In a memo to City Administrator Carl Geffken, Deputy City Administrator Jeff Dingman wrote that three separate tracts of property were appraised and offered for public sale. The combined appraised value for the property was $640,000.
The city received just one bid after publishing notice that it would offer all the property for sale, according to Dingman. XFED Commercial Properties bid a total of $210,273 for all three parcels, and provided the required deposit of $10,516.65, which the city holds.
The Fort Smith Board of Directors discussed this during its Nov. 26 study session, Dingman wrote. It was recognized that XFED's bid for the property was well below its combined appraised value. The board requested a second appraisal, which returned an estimated value of $852,000 for the property.
Ward 3 Director Lavon Morton said he asked for a second appraisal with the idea that it would give the board clarity on the value of the property since the first appraisal was substantially in excess of the proposed purchase price.
"However, the second appraisal, if anything, clouded the whole situation more," Morton said. "I've heard a lot of conflicting information regarding whether those appraisals can be relied on with respect to this particular property at this particular time in the condition it's in."
Geffken said something is only worth what someone is willing to pay for it. In addition, a considerable amount of work, including demolition, needs to be done on the land. More than 30 acres of the land is also in a flood plain.
At-Large Position 5 Director Robyn Dawson said that based on research she conducted by reaching out to two bank presidents in the area, as well as the Fort Chaffee Redevelopment Authority and others, she did not think the second appraisal was sufficiently valid for the board to make a decision on it. She expressed her belief that the board needed to table the resolution and get more information to make a good decision.
Morton voted against the resolution to accept XFED's bid, in addition to Ward 2 Director Andre' Good, Ward 4 Director George Catsavis, and At-Large Position 7 Director Neal Martin. Dawson, Ward 1 Director Keith Lau and At-Large Position 6 Director Kevin Settle voted in favor of accepting the bid.
State Desk on 12/18/2019