Jonesboro Advertising and Promotions Commission Chairman Thom Beasley said Wednesday (May 18) that finances played a big part in tabling a request by the O’Reilly group for funding support of its convention center in Jonesboro.
Meanwhile, a competing convention center project is headed to the Metropolitan Area Planning Commission for a site plan review next week.
Beasley said the request from O’Reilly Wednesday called for a 3% rebate on A&P taxes for five years, starting in 2018. The amount, based on the request made in March, would be $980,000, Beasley said. However, O’Reilly said in a letter sent to commissioners that “we would be open to any modification” of the request.
The Jonesboro A&P Commission voted by voice vote to table the O’Reilly request until late 2017.
O’Reilly is planning to build a 202-room Embassy Suites hotel, 40,000 square foot conference center and a Houlihan’s restaurant at the former ASU track complex just off Red Wolf Boulevard. The O’Reilly project, on which Arkansas State University is partnering for academic programs, is one of two convention center projects being considered in Jonesboro.
Keller Management, based in Illiinois, plans to build a 159-room Hyatt hotel, 37,000-square-foot convention center and a second hotel on 40 acres that once served as the Arkansas Services Center off I-555. The A&P Commission voted 3-2 in March to appropriate $150,000 in 2018, $100,000 in 2019, $50,000 in 2020 and a $200,000 cap per year on hotel tax abatements for the Keller project.
The commission also voted 3-2 in March against appropriating money for the O’Reilly project.
LETTERS OF SUPPORT FOR O’REILLY
Jonesboro Communications Director Bill Campbell and ASU Delta Center Executive Director Shawnie Carrier read letters to the commission about the O’Reilly request.
“Mayor Perrin is a strong supporter of all economic development in the city of Jonesboro, including anything that strengthens Arkansas State University. While he is legally bound not to instruct the A&P commission how to vote, … he is in favor of the A&P commission supporting the O’Reilly group’s request or some form of incentive to attract the O’Reilly Convention Center to Jonesboro,” Campbell said in reading the letter. “As a supporter of all economic development, if both projects come to fruition, the market will decide whether both succeed. It’s the mayor’s hope that both centers are unique and successful and become jewels that help continue our wonderful city’s growth.”
Perrin originally expressed support for the Keller project, in part because it was the first one announced.
Carrier read a letter sent by ASU system president Dr. Charles Welch. In the letter, Welch said he met with Perrin soon after the vote in March on the Keller project.
“I responded that I believed consideration of a proposal to rebate the 3% hotel tax that this new property would generate would be a fair and logical way forward and would not require the Commission to reduce any current commitments,” Welch wrote in the letter.
Welch said the request was not coming from ASU, but from O’Reilly.
“Based on the proposal I discussed with Mayor Perrin, Mr. O’Reilly is not requesting existing revenues of the commission. He is committed to this project and to supporting an academic program in hospitality management to benefit Arkansas State students. We believe this project is good for Jonesboro, A-State and the entire region and are thankful for your consideration.”
CHAIRMAN CITES POSSIBLE CASH FLOW PROBLEM
Beasley said it would be “fiscally irresponsible” to provide money while not “knowing what our funds will be.” Commission member Cathy Cardwell said other businesses have similar incentives, with the economic impact far outweighing the funding concerns. Beasley countered that the commission will already be spending money by late 2017 on the Keller project with front money, with 2018 being the first year of Keller’s agreement with A&P.
After the meeting, Beasley said the commission is facing a huge hurdle with funding over the next few years. The commission has $167,340 in 2016 requests still left to appropriate for festivals and projects before the end of the year; and is expected to have a $158,211 balance by Dec. 31. Beasley said the commission received $639,000 last year from a 3% tax on hotel rooms, with $879,000 in requests last year.
“It is a cash flow question,” Beasley said. “And it will be extremely tight next year and for several years to come.
Also on Wednesday, a Jonesboro engineering firm turned a site plan into city officials for the Keller project. Associated Engineering & Testing submitted paperwork for the Hyatt Place at Center Park project, city zoning director Otis Spriggs said late Wednesday (May 18).
The 40 acre plot will have a 108,888-square-foot hotel, a 4,891-square-foot convention center and two 6,768-square-foot restaurants, according to a schematic on file at the city zoning office. The project will also have a 684-space parking lot, with 27 handicapped parking spaces.
Spriggs said the site plan will be heard at the MAPC’s May 24 meeting in Jonesboro. The meeting is at 3 p.m. at the Jonesboro Municipal Center.