The Texas podiatrist who wants to buy the hotel and convention center on the Arkansas side of Texarkana out of bankruptcy asked a judge to reconsider the denial of some tax incentives tied to the project.
The potential buyer, Dr. James J. Naples, entered into a $6.6 million purchase agreement with Dr. Hiren Patel, who owns the Holiday Inn and Arkansas Convention Center through his Texarkana Hotels LLC, which is in Chapter 11 bankruptcy.
If Naples buys the property, he wants the city of Texarkana’s Advertising & Promotion Commission pledge to pay $150,000 annually for 15 years to continue.
U.S. Bankruptcy Judge Brenda T. Rhoades approved the sale of the property last month, but most of the tax incentives, which total nearly $500,000 per year, aren’t going to continue with the new owner. That includes the A&P’s $150,000.
Rhoades ruled that the agreement with the A&P could not be assumed by Texarkana Hotels and transferred to Naples.
Naples argued in his court filing last week in U.S. Bankruptcy Court in Texas that there is nothing in Arkansas law that prevents the assignment of the A&P incentive.
The attorney representing Naples, Mark Weisbart of Dallas, didn’t immediately return a call for comment.
A hearing on the motion has not been scheduled.
If the deal with Naples falls apart, the backup buyer for the Holiday Inn and Arkansas Convention Center is MidSouth Bank of Lafayette, Louisiana, which said Patel’s company defaulted on $10 million in loans.
Texarkana Hotels filed for bankruptcy in March 2016. It listed $10.6 million in debts and $5.2 million in assets.