In a 3-2 vote, the Fort Chaffee Redevelopment Authority’s Real Estate Review Committee approved the sale of a 14-acre piece of property on Wells Lake Road for potential use as a commercial development.
Pending a vote of approval by the FCRA Board of Directors on Aug. 16, the $375,000 sale will be an entry point for Bennie Westphal of Riverfront Exploration into Chaffee Crossing development. In land deals like this, the FCRA has the option to vote on purchasing the property back.
Westphal said he expects to have the property developed as mixed-use — commercial up front and residential in back — within two years. The land deal is with Johnny Nguyen and Chao M. Do, who bought the property in 2015 for $280,000, with expectations for use as senior housing or a day-use facility for seniors.
Rod Coleman of ERC Properties told the committee he has a plan for the property as residential and could develop it within a year. The land is adjacent to 71 acres set aside for the Fort Smith Public Schools District and two other ERC Properties projects, a high-end residential area called Providence and the mixed-use, development The HUB at Providence.
“If we get it, I know Rod has some commercial nearby and we’d work with him on it,” Westphal said. “We’re a proven developer in the city, and we would like to get involved here (Chaffee Crossing) at some point and this is a possible entry point for us to bring in some commercial that complements what Rod is doing, and some residential.”
Coleman, in so many words, pointed to the practice of land speculation which he feels impedes development by holding out for higher prices.
"I'm amazed at the number of properties that have been bought and held for so many years and nothing has been done with it," Coleman said.
In Coleman's opinion, the issue also boils down to the potential for the FCRA Trust to buy back land that is not being developed and sell it to groups that will develop it. And then use the profits to make more improvements to the land, whether it is road widening, utilities or trails.
"Does the trust want to take that risk to buy some of these properties back?" Coleman asked. "That’s probably not the case in this one because the risk factor is so low. But it is a possibility that’s out there, and I think you’re going to see — particularly on some of the big commercial lots — that after we’ve come out here for 10 years and worked to put all the housing up, prices will triple or quadruple and they will sell for a profit that, to be honest with you, was due to this trust.”
The real estate committee also approved a first-right refusal extension to ERC Properties on 46.9 acres until 2021. The land is west of the 71 acres set aside by the FCRA for the school district until 2020.