Convention center project developer says Jonesboro can’t support two centers

by Michael Wilkey (mwilkey@talkbusiness.net) 140 views 

The developer for a convention center to be built on the Arkansas State University campus said Wednesday that two convention centers in the Jonesboro area would not be successful.

Tim O’Reilly with O’Reilly Hospitality Management spoke Wednesday to the Jonesboro Advertising and Promotions Commission about his project which is affiliated with Arkansas State University.

A second convention project by Keller Enterprises is also in the works, with Jonesboro Mayor Harold Perrin supporting it. That center is planned as a 42-acre development with a 152-room hotel/convention center located at the former Arkansas Services Center site on U.S. 63. Perrin’s support of the Keller project has not been popular with ASU officials.

THE O’REILLY DEAL
O’Reilly and Arkansas State University officials announced plans last year to build a hotel/convention center on the site of the former ASU track complex. Construction could begin as early as April 2016 and would take 13 months to complete.

The project will include a 202-room hotel, a 40,000-square foot conference room and a Houlihan’s restaurant. Of the 40,000 square feet, 24,000 square feet would be available for meeting space. A 500-space parking lot would be built as well as a banquet hall that can hold up to 1,000 people with round tables and 1,500 people in an auditorium style seating capacity.

Also, a hotel management and training program would be created at the ASU-Jonesboro campus.

O’Reilly said his company works exclusively on developing hotels, restaurants and convention centers. The Springfield, Mo.-based company has done about 80 projects in the past several years, O’Reilly said.

O’Reilly said his grandfather, Chub, also began O’Reilly Auto Parts in the 1950’s, laying the groundwork and capital to complete several projects.

O’Reilly also said the brand of a hotel is important to his company. He said a specific brand and their customer Rolodex can bring people to an area, especially leisure and business travelers. Steve Minton, chief architectural officer for the company, told commissioners that a majority of their hotel and convention centers are either in college towns or state capitals around the country. The list includes Murfreesboro, Tenn.; Oklahoma City; Glendale, Ariz.; Albuquerque, N.M.; Frisco, Texas and Normal, Ill. Minton said the company is also building an Embassy Suites Hotel and Convention Center in Denton, Texas.

With any project, Minton said a design can be crucial.

“Flexibility is the key,” Minton said of developing convention rooms.

As for who will be using the convention rooms, a hotel chain can also bring business groups and organizations to the region, O’Reilly said. As for a specific chain, O’Reilly said, “Hilton is the brand of choice,” with Hilton’s business partner Embassy Suites being considered for Jonesboro.

The hotel chain has hotels in Little Rock, Hot Springs and Rogers, O’Reilly said. The project can also draw customers from around the state and region.

As for the Jonesboro project, O’Reilly said his company estimates, based on American Travel Association figures that a convention center with 45,300 attendees a year would spend $5.6 million in the first year and up to $12.6 million in year 10.

O’Reilly said the convention center’s location at ASU is also a drawing point, with Centennial Bank Stadium and the Convocation Center within walking distance.

FUNDING
Commission Chairman Thom Beasley asked O’Reilly about a request made last year to A&P. The request included roughly $200,000 a year from A&P taxes, plus rebates, over a 10-year period. The city collects a 3% tax on the renting of hotel rooms, which typically brings in about $600,000 a year, Beasley said.

O’Reilly said a public/private partnership is crucial for the convention center’s survival and the tax would generate $350,000 to $400,000 a year in revenue.

However, Beasley said a one-cent “hamburger tax” would make funding projects a cinch, snapping his fingers to demonstrate it. Beasley said the decision on the tax would be up to the Jonesboro City Council to implement it.

As for when tax revenue would be needed, O’Reilly said funding would be needed as early as 2018.

Minton said the Jonesboro project will follow a “market, market, market” approach for the future.

“This is the best location,” Minton said. “Putting an Embassy Suite here is a win for the university, for the city and for O’Reilly Hospitality Management.”

The Keller plan to build a convention center along U.S. 63 will be heard Feb. 10. At a Jan. 6 press conference in Jonesboro, developer Gary Harpole said about 15 of the 42 acres have been cleared with the first phase being $25 million to $30 million.

Beasley said the commission will be deliberate in listening to both groups before making any decisions.

“We went years and years without one; and now we have two,” Beasley said.

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