HOT SPRINGS, ARK. – Sky Capital Group LP, the new owner of The Arlington Resort Hotel and Spa in Hot Springs planning a $30+ million restoration of the historic property, has filed an appeal with the City of Hot Springs. Filed Wednesday, August 30, the appeal cites deficient notice, purported penalty in excess of legal authority, violation of right to district court trial, constitutional violations and undue hardship.
“I am passionate about identifying and renovating hotels and restoring them to their full potential,” said Al Rajabi, CEO of Sky Capital Group LP. “There is an enormous amount of potential in this wonderful historic property. We are committed to this anchor project for the future of Hot Springs and are moving forward quickly, but prudently. Patron safety and enjoyment are our highest priorities while we work on improvements.”
In a letter issued August 10, 2017, by the chief building official, the City of Hot Springs refers to issues that need to be addressed, but never delineates them nor sites specific provisions of the Hot Springs code alleged to be violated, which is required by city code as necessary to impose a mandatory deadline for addressing the alleged issues. Parts of the letter have been published in the media.
The appeal states that the city is acting outside of its authority in threatening to close the property. The jurisdiction for imposition of any penalties lies with the District Court of Garland County and not with any single city official. The appeal also reads that Sky Capital Group LP is being denied the appropriate audience within the court system and being threatened with having property taken without due process, a violation of its constitutional rights.
The recent negative publicity triggered by the city’s August 10 letter has had a negative impact on hotel operations, with an estimated $1 million in lost revenues and associated losses to area restaurants, attractions and vendors. The Arlington employs more than 200 full-time, part-time and contract staffers and is a large customer of dozens of local vendors that would be adversely affected if the hotel were completely shut down during renovations.
Sky Capital Group LP has owned the Arlington for six weeks. The top to bottom renovation will include a phased approach so that the hotel can remain open while renovations are underway. An architect has been engaged and plans will soon be drawn.
Sky Capital Group LP has already invested heavily in Arkansas, recently completing a $10+ million transformation of another significant hotel property – the Four Points by Sheraton on University Avenue in Little Rock. In the wake of the revitalization, Four Points has seen a substantial increase in revenue from corporate clients.
“Given that the Arlington Hotel is an historic property, there are special considerations and protocols to follow,” said Rajabi. “Efforts are underway to submit plans to the Hot Springs Historic District, Arkansas Historic Preservation Program and the Federal Historic Preservation program. We hope to clear up any and all issues with the city quickly so we can return our focus to restoring the crown jewel of the Hot Springs Skyline and tourism industry.”