Jonesboro Mayor Harold Perrin told Talk Business & Politics he thinks two proposed convention centers in Northeast Arkansas’s hub city could still be completed by next year.
Northern Arkansas Hotel and Convention Center (NAHCC) has been asked by the city’s A&P Commission to return $75,000 that has been paid towards its planned 78,000-square-foot convention center and 165-room Hyatt Place Hotel, according to a letter obtained by Talk Business & Politics.
Perrin supported the NAHCC project, formerly known as the Keller project, and the A&P dedicated $300,000 in advertising and marketing revenues and $200,000 per year for the first three years in hotel tax forgiveness. The project has been stalled for months because its primary investor hasn’t paid funds towards construction costs which is slated to top $50 million. When asked by Talk Business if he thinks the A&P should swing its support to another convention center project slated to be built on the Arkansas State University campus, Perrin remained steadfast.
“I don’t think it (the letter) implies that A&P or I believe any outcome has been determined,” Perrin said. “We’ve had two developers propose to build convention centers in Jonesboro. I said from the beginning that I thought it would be difficult to sustain two, but we gladly welcome anyone who wants to do business in Jonesboro. We will see how it works out.”
A&P Commission Chairman Jerry Morgan asked for a letter to be sent to NAHCC CEO Chris Keller after liens were placed on the property near the city’s hotel row off Caraway Road, and abutted by U.S. 555. Dirt work was finished, but construction crews and equipment have been missing from the site for more than a month because of non-payment for work.
Keller has told the commission he is working on the financial details, and the project will be delayed, but it will be built. There is $70,000 from the initial payment still being held in a local bank, and the letter asks that the money be held in a city controlled escrow account until the project restarts.
The letter asks NAHCC to comply with a number of conditions within 30 days of receipt of the letter. NAHCC will be asked to produce an irrevocable letter of credit or surety bond for the return of funds if the project isn’t completed. A letter from a bank, investor, or investment group must be submitted detailing available funds for the project. Final plans for the entire project must be submitted, unpaid vendors must be paid, a commitment letter from the Hyatt corporate office must be included, a full accounting of how the money will be spent, and a timetable to begin construction in the next 90 to 120 days must be established.
Keller told Morgan his company won’t need the other $75,000 installment this year because of the delays. A&P is slated to already pay another $150,000 in 2018, and the $75,000 could be added to that total.
Perrin said he understands the caution exercised by the A&P Commission. Jonesboro has needed a convention center for years, but the city’s financial interests have to be protected, he said.
“I appreciate the commission’s efforts, led now by Jerry Morgan. I know they have the city’s interest at heart, and are simply taking steps that are sound financial management,” Perrin said.
Another convention center project is slated to be built on the ASU campus. O’Reilly Hospitality Management of Springfield, Mo., is waiting for the city of Jonesboro to approve construction and architectural plans for a 202-bed Embassy Suites Hotel, the 40,000-square-foot Red Wolf Convention Center, and a Houlihan’s Restaurant, company CEO Tim O’Reilly told Talk Business & Politics. The project is expected to cost about $50 million.
O’Reilly told Talk Business & Politics he didn’t think his project was subject to city permitting because it was on the ASU campus. But to avoid legal wrangling, the company opted to work with the city. The permitting process has slowed the finish date for the ASU convention center. Officials hope to have it completed by the start of the fall semester in 2018.