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Vacant Eureka Springs motel converted into much-needed residential housing

Magic City Commons opened July 1 with over 50 apartments to lease to local residents and tourist industry workers.

When the Ozark Swiss Inn on Highway 62 East in Eureka Springs closed for business, The Dels Corporation, based in Mountain Home, purchased, renovated and converted the motel into 52 affordably priced apartments for lease.

This Saturday morning, two new tenants, Blake Wright, a former Eureka Springs resident, and his spouse Renee, relax with their two dogs on their front porch, an AC unit cooling their newly refurbished apartment.

"I just recently moved back, and we moved in July 1," Blake Wright said.

The sign out front has been changed from Ozark Swiss Inn to Magic City Commons, with a phone number to call. Blake Wright said finding an affordable place to live has been hard.

Considering all utilities are included, you can't beat the price.
Mr. Wright

The couple pays $850 a month for a studio apartment which includes utilities and internet. Pets under 40 pounds are allowed to live here for an additional $25 per month. A few one and two-bedroom apartments have already been leased.

Renee Wright is new to Eureka Springs.

"I think it's very peaceful. I've never lived here before, but I'm very pleased with everything. Very beautiful," Renee Wright said.

The couple is fortunate to find a reasonably priced place to live due to a chronic housing shortage in the tourist town, as well as rising rents.

Historic District Commission director Kyle Palmer, who also serves as director of planning and community development, said The Dels Corporation – Dels Corp for short - initiated renovation of the old motel late last year.

"It was not closed long before the new property owners purchased it, and they had reached out to me in November or December with their intention to see if it would be something that would fit in with the city plan before they came in and purchased the property," Palmer said.

Magic City Commons is located uptown in a commercial-zoned district, so it's not subject to the city's strict historic district regulations, Palmer said.

"They are allowed to convert to residential without getting any special permits," Palmer said. "So, basically, they had to meet building and fire code regulations to make that conversion to long-term rentals, which they've been really good about working with the city on making sure that they meet those requirements."

Eureka Springs Historic District Commission director Kyle Palmer stands in front of the newly converted Magic City Commons
Jacqueline Froelich
Eureka Springs Historic District Commission director Kyle Palmer stands in front of the newly converted Magic City Commons

The two-story cement block complex has a fresh coat of dark blue paint, white trim with black wrought iron railings.

They did do a lot to the property- new roof, new doors, new interiors, new lights - yeah, they made a pretty significant investment.
Kyle Palmer

The former motel units have new flooring, fresh paint and kitchens are built into each former motel unit. Tenants share laundry facilities for a monthly fee.

Palmer said several other tourist motels have stood vacant for a while and could also serve as affordable residential housing.

"And then there are a few kinds of the same style that are for sale, and I know that there's been interest in both of those properties converting them also into long-term rentals," Palmer said.

Providing affordable housing to the town's workforce will help them save money.

It seems like a lot of people were commuting into town for work, and it's caused employment issues with some of the major employers in town not being able to find enough employees because there's a shortage of housing.
Kyle Palmer

We sought comment from The Dels Corp., founded in 2018 by CEO Mark Bertel. The Dels - named after an Italian island - counts over 300 tenants in multiple states and has converted or restored more than 15 properties, including several restaurants and an ice cream shop in Mountain Home.

Kate Fox is Del's leasing agent and property manager who's facilitating leases for Magic City Commons.

"You know, we've had such a positive response from everybody that I have met with," Fox said. "Every single person I've come into contact with I've really enjoyed speaking to. Everyone's very friendly here, but everybody always told me the exact same thing. They say, 'We need this so badly, thank you so much.'"

Prospective tenants must show proof of stable employment or income, submit to criminal checks and request references.

She expects Magic City Commons, currently over 20% occupied, will be full by the end of summer.

We are a tourist town, so we have a semi-transient workforce, and to get people to stay and to make a good living and make it affordable to live here is vital to our economy.
Kate Fox

Sandy Martin, chair of the Eureka Springs mayor's task force on economic development, said she contacted The Dels Corp encouraging the company to invest in Eureka Springs.

"We reached out to the Dell corporation to let them know when we found out what they were doing and the work that they were doing around the state and let them know that we had needs here, and we had several hotels that would be ideal locations to convert," Martin said. "They picked up the ball and ran with it from there."

Martin said the city is looking at available lots in town to build affordable housing.

"The most significant thing we did to help the housing market - particularly workforce and affordable housing - is we started a Community Development Corporation, CDC, of Eureka Springs."
Sandy Martin

"It's patterned after the one in Bentonville, and it will provide incentives, potential for grants and write-off opportunities that the city or any other entity just simply could not do," Martin said. "So, that community development corporation is going to be the development funnel for affordable housing and some other projects that we're working on."

Recently, the owners of the historic Crescent and Basin Park Hotels in Eureka, which reportedly employs as many as 270 receptionists, cooks, waitstaff, housekeepers and bartenders, converted a former assisted living facility into one-bedroom and studio apartments.

Urban districts in Northwest Arkansas are also seeking ways to provide more attainable housing.

Northwest Arkansas Groundwork, a workforce housing center in Springdale, recently announced a new mixed-income housing development branded "Big Emma."

Funded with a $6.75 million grant provided by the Walton Family Foundation, the 77-unit apartment complex will be located on Emma Avenue in downtown Springdale. Nearly half of the units will be reserved for middle-income households.

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Jacqueline Froelich is an investigative reporter and news producer for <i>Ozarks at Large.</i>
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