Executive Summary

Development Pipeline

Industrial Projects

> Additional projects are included in the Appendix below.

Entitlement Risk

Approval Patterns

• The Board shows a high propensity for approving industrial expansions that demonstrate clear job creation and capital investment, evidenced by the 2025 manufacturing wins .
• Infrastructure commitments are robust; the city has approved over $150 million in wastewater and utility upgrades to support system capacity, though these are often "unplanned" costs triggered by new development needs .

Denial Patterns

• No recurring denials were identified for industrial-specific projects; however, significant friction exists for projects perceived as lacking transparency or sufficient stakeholder engagement .
• The board has expressed reluctance toward "blank check" authorizations, preferring specific data on economic returns before committing city resources .

Zoning Risk

• Inventory Contraction: The city is actively rezoning M1 (Light Manufacturing) parcels to C1 (Central Business District) to facilitate tourism and commercial uses in the core, reducing the available supply of small-scale urban industrial land .
• Buffer Requirements: Rezonings near residential areas are being funneled into Commercial Transitional (CTR) or similar districts to serve as mandatory buffers between residential and industrial uses .

Political Risk

• Leadership Friction: Tension exists between the Board of Directors and the Hot Springs Metro Partnership (HSMP). Comments made by economic development leadership suggesting some board members "don't get it" have created a sensitive political environment regarding the vetting of city-owned sites .
• Vetting Control: There is active discussion about allowing city staff to vet development proposals in parallel with HSMP to ensure more direct board oversight .

Community Risk

• Environmental Concerns: Individual resident opposition has been noted regarding rezonings on hillsides, citing concerns for wildlife and terrain impact .
• Nuisance Sensitivity: While industrial projects are generally favored, residents are vocal about "blight" and inactivity on stalled construction sites, which can lead to rapid condemnation proceedings .

Procedural Risk

• Utility Readiness: Large-scale industrial sites like the Buddy Bean property require significant pre-development coordination with utility providers (Energy Arkansas) to verify power and water capacity .
• Extraterritorial Jurisdiction (ETJ) Shifts: New state legislation (Act 314) has eliminated the city's planning jurisdiction in unincorporated county areas, shifting control of certain peripheral industrial lands back to the county .

Key Stakeholders

Council Voting Patterns

• Director Webb: Frequently questions the granular costs of engineering and consulting contracts but generally supports workforce development and industrial growth .
• Director Garcia: Strong focus on infrastructure capacity and ensuring that business prospects are aware of utility advantages/limitations .
• Mayor McCabe: Proponent of industrial growth but emphasizes that such projects must not burden the General Fund; he closely monitors utility bond fund balances .

Key Officials & Positions

• Bill Burrow (City Manager): Actively manages "mega-projects" in the utility bond portfolio; primary point of contact for large-scale infrastructure coordination .
• Kathy Selman (Planning Director): Leads code updates (Code Forward) and ensures projects align with the 2040 Comprehensive Plan .
• Gary Troutman (CEO, HSMP): Primary recruiter for industrial prospects; currently under pressure from the board to increase transparency regarding site vetting .

Active Developers & Consultants

• Redstone Construction Group: Frequently awarded large-scale airport and infrastructure contracts .
• Garver LLC: Dominant engineering consultant for airport and taxiway improvements .
• Maxfoot Construction: Primary contractor for wastewater treatment and lift station upgrades .

Analysis & Strategic Insights

Forward-Looking Assessment

• Industrial Momentum: The pipeline is strong, particularly in the manufacturing sector. The acquisition of local firms by out-of-state entities (e.g., Molecular Processing) indicates a healthy M&A environment that likely precedes further facility expansions .
• Infrastructure Lead Times: Developers should anticipate significant lead times for electrical infrastructure. Current "mega-projects" have faced delays of 150-180 days due to transformer procurement issues with Entergy .
• Regulatory Environment: The adoption of the new Landscape Code (O-25-34) and ADU regulations suggests a shift toward more visual, user-friendly, but strictly enforced standards for new development .
• Strategic Recommendations:
• Site Positioning: Given the elimination of the ETJ, developers looking at land just outside city limits must now navigate Garland County regulations rather than City of Hot Springs planning .
• Stakeholder Engagement: Early engagement with the Board of Directors is critical to bypass potential friction between the City and the Metro Partnership. Providing clear data on "return on investment" for the city's enterprise funds will expedite approvals .
• Watch Items: Monitor the March 2026 Board recommendations for the Majestic site; the outcome of this "iconic property" will signal the city's long-term appetite for mixed-use vs. pure commercial development .