O’Reilly-backed Embassy Suites-Convention Center project details emerge for site on ASU campus

A proposed convention center project on the Arkansas State University campus in Jonesboro could create as many as 1,000 jobs and add $110 million to the local economy, according to a letter sent Tuesday (Dec. 1) to the Jonesboro Advertising and Promotion Commission.

Springfield, Mo.-based developer Tim O’Reilly is requesting funding from the city’s A&P Commission starting in 2017. In a letter, O’Reilly said he hopes construction will begin as early as January 2016 with the project being completed by fall 2017.

The request has not been acted on as of Wednesday. The commission, which works to promote tourism, typically meets at the end of each year to go over the budget for the next year.

Earlier this year, O’Reilly and ASU officials said the project would include a 200-room Embassy Suites hotel, 40,000-square-feet of conference room space and a Houlihan’s restaurant. A hospitality management program, already in place at the ASU-Newport campus in Jonesboro, would be expanded with students learning how to work in restaurants and hotels, officials have said.

O’Reilly, the managing member and CEO of O’Reilly Hospitality Management, said in the letter that the economic and educational impact of his project would be positive for Jonesboro and the region.

“A successful hotel-convention center project at Arkansas State would meet your mission and more,” O’Reilly wrote in the letter. “It will expand the city’s tourism capacity; create jobs; provide additional tax revenue; drive clients to existing hotels, restaurants and retail outlets; host a new academic program; enhance the use of already existing spaces such as the Fowler Center and the Cooper Alumni Center; assist in the recruitment of new students to A-State; be developed by a proven professional team vetted through an open bid process and be located on the A-State campus on Red Wolf Boulevard – the city’s busiest thoroughfare.”

Shawnie Carrier, the project leader at ASU and the director of the Delta Center for Economic Development, said the project will provide a definite economic impact.

“A successful upscale hotel and convention center project at Arkansas State will expand the region’s tourism capacity, create jobs in a growing industry sector and provide additional tax revenues. It will deliver more business to existing hotels, restaurants and retail outlets. We’re also excited about using the facility to provide real-world experience for a new academic program in hospitality management,” Carrier said. “This development will be built by a proven professional team whose resume exceeds $150 million in similar projects since 2007. The 18-month economic impact of the construction is estimated to be $64 million, and the annual economic impact of this development will exceed $44 million.”

Carrier said the project will also provide a regional impact.

“This project is a win-win for A-State, Jonesboro and the region. Mayor Perrin was asked to reiterate his support for the project since he previously indicated that he personally supports the university project, as well as all appropriate development in Jonesboro,” Carrier said.

EMBASSY DETAILS
In the letter sent to A&P commissioners, O’Reilly said the project, which will take 18 months to complete, will have a direct and indirect impact on the economy. Using records from both the Jonesboro Regional Chamber of Commerce and the Arkansas Economic Development Commission, O’Reilly said the construction phase would create 551 jobs and add $64.277 million to the economy.

Once the project is complete, O’Reilly said at least 430 jobs would be created directly or indirectly as part of the convention center project with a $44.418 million impact on the local economy. Of the estimated 430 jobs, 300 would be at the convention center with the rest coming from other sources.

As for the funding request, O’Reilly said he would be asking for a 10-year commitment. O’Reilly said the plan would also would involve placing the A&P logo on marketing materials including websites and social media, as well as working with the “chamber or others to devise a broad-based marketing strategy agreeable to the Commission.”

“Our partnership request, once in operation (2017-18) for a ten-year renewable commitment is as follows: (1) refund the first $200,000 of tax collections of what we would normally pay into the A&P as a hotel. Anything over the $200,000 amount will still be paid; (2) Up to 30% of our proposed marketing budget to use for marketing the Embassy Suites Hotel, the convention center, the city of Jonesboro and the region which will greatly benefit all hotels and businesses in the market area, thereby generating an enormous ROI for the state,” O’Reilly said.

O’Reilly also estimated that the project would create the following revenue for the A&P Commission, based on a 58% occupancy rate for the first year and going up to 75% by year 10:
Year 1 (2017) – $157,302
Year 2 (2018) – $177,274
Year 3 (2019) – $200,148
Year 4 (2020) – $214,949
Year 5 (2021) – $230,607
Year 6 (2022) – $237,545
Year 7 (2023) – $247,823
Year 8 (2024) – $255,332
Year 9 (2025) – $263,629
Year 10 (2026) – $264,439

The city of Jonesboro collects a 3% tax on hotel room revenue in the city, with the money going to the A&P Commission. The tax is expected to bring in about $630,000 this year, commission chairman Thom Beasley said last month.

KELLER PROJECT, COMPETING INTERESTS
The O’Reilly project is one of two convention center projects in the works for Jonesboro. An Illinois-based group, Keller Enterprises, announced plans in August to build a 152-room Hyatt Place Hotel and Conference Center at the site of the former Arkansas Services Center.

Officials with the Effingham, Ill., company visited Jonesboro in August to discuss the project. Construction has not begun on the project, but in recent weeks there has been dirt work on the property adjacent to U.S. 63.

An official with the project, Shawn Keller, was out of the office Wednesday and could not be reached for comment on the status for the project.

When reached for comment Wednesday, Jonesboro Mayor Harold Perrin said he had received a visit earlier this week from ASU-Jonesboro Chancellor Dr. Tim Hudson on the O’Reilly project heading to the A&P Commission. Perrin said he is reading the letter and would withhold comment until he had a chance to fully review it.

Perrin has in past statements been supportive of the Keller project, which did not sit well with O’Reilly.

“Mayor Perrin pledged his full support for our project a few weeks ago when we met in Little Rock at the ASU office, but I understand that he is now supporting another project, which was somewhat of a shock based on our recent conversations,” O’Reilly said in an early October interview with Talk Business & Politics.