ASU Board approves $35 million O’Reilly convention center project
by February 26, 2016 7:34 pm 207 views
Developer Tim O’Reilly said Friday (Feb. 26) that the work on a $35 million convention center on the Arkansas State University campus could begin as soon as Monday. He made the comment after the ASU board approved the project.
The Arkansas State University Board of Trustees voted 3-2 Friday to allow O’Reilly Hospitality Management of Springfield, Mo., to build the convention center. The center will be built on an 11-acres where the former ASU track and field complex was located, just off Red Wolf Blvd. Construction of the project is estimated at $35 million, with the university and O’Reilly officials estimating the overall economic impact at $50 million.
Voting yes were trustees Ron Rhodes, Dr. Tim Langford and Stacy Crawford, while trustees Niel Crowson and Howard Slinkard voted no.
O’Reilly said he was “extremely excited” about the vote Friday on the ground lease agreement, with a decision on an affiliate agreement with Embassy Suites known by mid March. The agreement calls for a 50-year lease between ASU and O’Reilly, with a 40-year option to renew. O’Reilly will pay ASU $250,000 a year between the 4th and 9th year of the convention center’s existence, the agreement noted.
From the 10th year until the 19th year, and “for each respective 10-year period following,” O’Reilly will pay $250,000 a year plus the percentage of the positive difference between the Consumer Price Index “for the 60 days prior to the date of increase and the CPI for the same month as the increase 10 years prior.”
O’Reilly and ASU will create a hospitality management program at the Jonesboro campus, while O’Reilly will provide up to 250 room nights at the hotel for ASU-Jonesboro employees and designers at no cost to the university. Also, ASU could receive up to $50,000 a year if large meetings that university employees or agents work solely to get, the agreement noted.
Crowson cited financial concerns as reasons for voting no on the project.
“I have spent countless hours considering this initiative and how I would vote. I would like to first thank our administrative team for their efforts in consistently seeking ways to diversify revenue for our university. I do appreciate the proactive mindset of our team. However, I am not convinced that this is the correct next step in our development as a university. There are many reasons why I have concluded that I cannot vote for this initiative,” Crowson told content partner KASU. “These reasons include financial considerations, strategic development, and timing. I am one who will always speak up and express my ideas and concerns. However, if my colleagues differ with me and approve this project, I will support the university as I always have and will work alongside my colleagues to ensure this, and every other initiative we undertake, will be successful.”
Supporters of the project have said the convention center is likely to draw visitors from academic conferences, recruiting students and the close proximity to the Convocation Center and Centennial Bank Stadium.
There are two convention center projects under discussion in Jonesboro. In addition to the O’Reilly project, Illinois-based Keller Management is wanting to build a 159-room hotel and a 37,000 square foot convention center along U.S. 63. There is also a plan to build a second hotel at the site.
The O’Reilly and Keller projects have requested funding from the Jonesboro Advertising and Promotion Commission to help with marketing. The city has a 3% hotel tax on rooms, which brings in about $600,000 a year, officials said last year. Keller has requested $150,000 a year for three years, plus a return on all room tax revenue that the hotel will receive. O’Reilly is requesting $200,000 a year over 10 years.
O’Reilly reiterated his statement earlier this year that he believed two convention centers would have difficulty succeeding in the Jonesboro market, noting it would likely come down to “who had the best brand.”
The commission will meet at 1:30 pm Wednesday (March 2) at the Jonesboro Regional Chamber of Commerce office to decide on the requests.
KASU News Director Johnathan Reaves contributed to this story.