The Frederica Hotel, which has been closed since September for not paying state sales taxes, is in disrepair because of break-ins and vandalism, according to a report filed Wednesday in Pulaski County Circuit Court.
Pulaski County Circuit Judge Chris Piazza on May 11 appointed RPM Management of Little Rock as receiver of the historic but troubled downtown Little Rock property, which also is mired in a foreclosure lawsuit filed by ReadyCap Lending LLC of New Providence, N.J.
The firm filed a foreclosure lawsuit in Pulaski County Circuit Court in November, saying the hotel's owners had defaulted on a $4.6 million loan. SHG Management in Sherwood announced in August 2016 that it had purchased the hotel for $2.85 million. Its owners later said they spent about $2 million in renovations.
ReadyCap in January asked Piazza to appoint RMP Management as receiver of the property, with such responsibilities as arranging for repairs and securing the site.
The hotel, at 625 W. Capitol Ave., has had at least two break-ins since its closing by the state Department of Finance and Administration, ReadyCap said in its request for the appointment of a receiver.
RPM workers toured the property on May 12, Vaughn McQuary, RPM's president, wrote in a court filing Wednesday. "The property was found to be in a much deteriorated condition" since October, when RPM first toured the hotel, McQuary wrote.
Electrical wires and copper tubing have been stripped, pipes removed, and furniture and fixtures damaged, "with unsanitary conditions throughout the property," McQuary wrote.
"We were unable to enter some rooms due to not having working room card keys," McQuary wrote, adding that he'd been informed by the hotel's former director of operations that the key card machine had been stolen.
"It's a good, sturdy building, but it has had some security breaches," McQuary said by telephone Thursday. "It needs a good cleaning. Once that's done, it will be very presentable. I hope someone comes in and buys it."
McQuary, a former chairman of the state Democratic Party, acknowledged the hotel's long history, including its time as a center of Arkansas political gatherings.
At age 107, the hotel is the city's second-oldest, behind the Capital Hotel, and was famously known as the Hotel Sam Peck and, later, The Legacy Hotel & Suites.
The hotel's renovation in 2016-2017 included the hanging of enlarged photographs and other memorabilia noting that history, including the 1982 raid of a toga party at the hotel by then-Sheriff Tommy Robinson, later a U.S. congressman. Winthrop Rockefeller lived in the hotel's sixth-floor penthouse suite for a while before serving as Arkansas governor from 1967-1971.
McQuary's report to Piazza said RPM has sent proposals and financial estimates to ReadyCap on closing off the hotel's parking lot, arranging for a private security firm to check the property three times every 24 hours, spraying for bedbugs and other pests, and removing trash, furniture and fixtures.
RPM is to make monthly reports on progress at the hotel, according to Piazza's order.
According to a police report, an owner of the hotel called Little Rock police on Oct. 17 to report a break-in. The owner reported theft of, or damage to, 40 flat-screen televisions, furnishings and bedding, all valued at $26,000. The owner said he was getting ready to show the property to a prospective buyer when he found an exterior door had been forced open, according to the report.
The report indicated the incident might have occurred Sept. 13.
That was the same day officials with the Department of Finance and Administration, accompanied by Little Rock police officers, closed down the hotel. The department has filed liens of more than $60,000 for sales taxes not paid by the hotel.
The hotel's owners also owed more than $52,000 in property taxes and real estate taxes in Pulaski County and more than $12,000 to the Little Rock Advertising and Promotion Commission, according to court filings last fall.
All of the debts cited in the court filings are from the time SHG had the property.
Business on 05/22/2020