The city’s second request for proposals to redevelop the Majestic Hotel property drew two respondents, the same two that responded to the initial solicitation.
A joint proposal Grand Point Investment Group of Hot Springs and Cienda Partners of Dallas submitted in the spring was rejected by the city because it didn’t include a bid bond or other information showing it had the financial wherewithal to pull off the $100 million thermal water resort it outlined in its 127-page proposal.
A proposal by DHM Design was also rejected. The Denver firm’s more than 70-page submission didn’t include a financing plan, putting the onus on the city to find investors.
Both proposals incorporated Hot Springs National Park’s thermal waters, an element cited as central to design concepts for the 5-acre Park Avenue site during public planning sessions the University of Arkansas Fay Jones School of Architecture and Design facilitated last April.
The city said the firms submitted proposals for the RFP that closed July 10. It’s unclear what they included, as the city said the materials are exempt from the Arkansas Freedom of Information Act. It cited the law’s provision that shields materials that would give an advantage to competitors or bidders if disclosed.
The RFP said proposals will become public record after discussions and negotiations have been completed and the project awarded.
City Manager Bill Burrough said Wednesday that the initial review of the two proposals indicated at least one meets the RFP’s requirements.
“We will begin a more in-depth review over the next couple of days,” he said in an email.
The city said numerous developers had inquired about the project prior to the onset of the coronavirus pandemic earlier this year. That interest appeared to have returned when the second RFP was issued in June, giving the city hope that its second solicitation would draw more responses than the initial request.
Burrough expressed that hope to the Hot Springs Board of Directors at its July 7 business meeting.
“It feels like it did that first week of March with the number of calls that we’ve had and the interest in the RFP,” he said. “We won’t know until (July 10) what those look like or how many we actually have. We’re very excited.”
Burrough said Wednesday that the level of response didn’t meet expectations.
“With the amount of interest and communications we were receiving, I thought we would have had at least a couple more responses than we did,” he said in an email. “It is my understanding that at least one additional interested party planned to submit but did not realize the July 10 closing.”
The RFP said the development team the city’s selection team chooses will enter into a 90-day period of exclusive negotiations with the city. Both parties may withdraw if an agreement isn’t reached at the end of 90 days.
The evaluation criteria remained unchanged from the previous RFP. The Hot Springs Board of Directors March 2017 values and objectives are the most weighted factor, with up to 30 points available for proposals that align with those priorities.
They include enhancing economic opportunities, improving local quality of life and enhancing the visitor experience, promoting thermal water and respecting the city’s arts, culture and history. Recouping the more than $2 million the city spent acquiring the property in 2015 and demolishing the condemned “red brick” building, Lanai Towers and Lanai Suites in 2016 is also a priority.
The financing plan, 25 points, quality of the development plan, 20 points, and credentials of the development team and its timeline for completing the project, 20 points, round out the weighted scoring.