Branson investors add to holdings via auction

by Karen E. Culp

SBJ Staff

Property in Branson formerly owned by businessman Dale Crawford will be put to good use by its new owners following an absolute auction of the properties Jan. 29.

The auction, held inside the Ozark Mountain Buffet, was conducted by the Gadsden, Ala.-based National Auction Group. The property, which included the Ozark Mountain Buffet, two hotels, the Ozark Mountain Amphitheater and some commercial acreage, brought a total of $2,226,365.

The three purchasers of the property all already have investments in Branson. Paul Kreth owns the Shorty Small's restaurants in Branson, Springfield, Little Rock, North Little Rock, Oklahoma City (two restaurants within that city) and Edmond, Okla.

He said his company plans to maintain the Ozark Mountain Buffet as a buffet-style, family-dining restaurant. He added that the two hotels his group also purchased, the Westwood Inn and Thunderbird Inn, will be operated as they had been.

"The properties were in good shape. The Crawfords took extremely good care of those properties," Kreth said.

Based on the price the properties sold for at the auction, it was "hard to go wrong," given that the properties were ongoing operations, Kreth said. The Thunderbird went for $752,500, the Westwood for $496,650 and the Ozark Mountain Buffet for $376,250. The Thunderbird Inn has 125 furnished units and has frontage on state Highway 76. The Westwood has 77 units. The Ozark Mountain Buffet is a 300-seat restaurant and is bi-level, the lower level comprising a ticket office for the amphitheater and sleeping rooms for performers.

Kreth said that the restaurant was his main focus, but the hotels were very attractive to him based on the price. Some of the company's partners are involved in the hotel business, he added.

"I think Branson is the place to be right now. It's a very positive place to do business," Kreth said.

Shorty Small's of Branson Inc. has several stockholders and 600 employees, Kreth said. Another corporate identity will probably be formed for the new acquisitions, although the principals are still considering what type of identity that will be.

The company expects to see a high rate of return quickly from its new investments, Kreth said.

"Tourists have been extremely good to us at Shorty Small's, and we realize how important that repeat business is. The first year with the buffet will be a building process, but we hope to be even stronger the next year, once we make it known that we've got a quality product to offer," Kreth said.

The buffet restaurant will probably employ about 30 people, and the company will be adding between 85 and 95 employees at Shorty Small's restaurant. The company is still debating what the buffet restaurant will be called, whether it will remain the Ozark Mountain Buffet or get a new name. Kreth also said that his company plans to go public in a few years.

Another Branson businessman, Rick Huffman, and his partner in Ozark Resort Management, Marc Williams, purchased the Ozark Mountain Amphitheater, an open-air, 8,124-seat amphitheater, for $204,250. Ozark Resort Management also purchased a 13-acre tract of land that includes a three-bedroom, rock-and-frame ranch home for $220,375.

Ozark Resort Management owns several resorts and some commercial office space in the Branson area, in addition to being a partner in the resort, Huffman said. The company also owns a resort in Phoenix, Ariz., and is opening a telemarketing center in Springfield in the former MCI building, Huffman said.

That venture will bring about 160 jobs to town, and those jobs will pay about $7.50 an hour. The telemarketers will be selling vacation packages in Ozark Resort Management's resorts, according to Huffman.

Huffman said the amphitheater is a good purchase for the group because of its location and capacity.

"It seats 8,300 people; that's the largest crowd in town," Huffman said.

The company had gone to the auction to bid on the Ozark Mountain Buffet, with the intent of converting the restaurant into office space, Huffman said. Instead, they will now pursue using the amphitheater as it was used previously: for live performances. One of the 13 acres Ozark Resort Management acquired will be used to build an office building for the company's new corporate headquarters. The residence will be converted into office space. The tract of land which included the residence was not zoned for commercial use at the time of the auction, but the Branson Board of Aldermen conducted a first hearing on rezoning the property Feb. 3, Huffman said.

The restaurant's price was out of Ozark Resort Management's price range, considering the cost to renovate it into office space, Huffman said. The company was not planning on purchasing the amphitheater, and is therefore uncertain as to its future use.

"We got an excellent location on this property, and it's in a prime part of Branson. We also see some opportunities for revitalizing the property," Huffman said.

Springfield businessman and Branson investor Jim D. Morris also got in on the auction action. Morris' representative, Chris Lucchi, bid on three tracts of land the pair acquired. A 5.75 acre tract sold for $80,625. That piece was attractive to him, Morris said, because it is adjacent to the Quality Inn hotel he already owns. The hotel faces Shepherd of the Hills Expressway on one side and Little Pete's Road on the other.

Morris also purchased another approximately 27 acres (one 13.48 acre tract for $53,750, the other of the same size for $26,875), but that land is probably not going to be used for commercial development, Morris said. The land drops into a ravine, and Morris said that at this time, he has no plans for developing it.

The land adjacent to the Quality Inn will be used for expanding that 214-room facility, Morris said. The expansion is not planned to occur immediately; the hotel could gain another 100 rooms during the calendar year 1999, Morris said.

Morris owns another 113-room Quality Inn and the 63-room Tara Inn in Branson. He came to the town in the spring of 1961. He said Branson will continue growing, but at a slower, steadier pace. He added that he didn't perceive the prices paid at the auction as being unreasonably low.

"The property values may be down a little, but they'll catch back up. The city of Branson has done an excellent job of promoting itself, and we now have the infrastructure to see even more development. I see good things happening in Branson," Morris said.

Dick Hall, past president of the Branson/Lakes Area Chamber of Commerce and owner of Branson Realty, said that the prices the auction brought were below market price, but not that far below.

"The problem is that there have been no real commercial sales in the last two years that would give a good basis for what these prices should have been. And even if these properties had been listed to sell at market value, they could have sat there for two years before they started to get attention," Hall said.

Hall has owned Branson Realty, a company established in 1948, since 1989. He brokered the deal when Syncor Entertainment purchased the Grand Palace from Silver Dollar City, and he sold Mel Tillis land for a theater.

Hall also said that some property in Branson is listed to sell for below-market price and is not attracting buyers. He said it was hard to tell much about the market from a real estate auction, but that the auction had served its purpose for the Crawfords.

"The owners had a unique situation. They didn't want to have a prolonged listing and selling period. That's what an auction is good for," Hall said.

Hall added that the uses of an amphitheater in Branson might be somewhat limited, since there are now large, enclosed performance centers in abundance in the city.

"I don't know what a person would do with an amphitheater now," Hall said.

William Bone, president of the National Auction Group, said the auction "proved there is a market for commercial property in Branson." He said that the prices were what the market would bring at this point.

Ron Stenger, an investor in the group that owns the Shorty Small's restaurants and bought the restaurant and hotels, said the prices were not market prices.

"I think people that think these were market prices are wrong. These were fire-sale prices," Stenger said.

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