Jonesboro building permit numbers plummet; Mayor Perrin confident of $200 million goal

Jonesboro’s economy has almost been impervious to bad numbers during the last 15 months, but one economic indicator has nosed dived in the early part of 2017.

The city has issued permits for $23.99 million in total construction projects in 2017, a 43% drop from the first four months of 2016 when $42.508 million were issued, according to figures released by the city. It’s a 22.8% drop from the same period in 2015, when $31.108 million were issued.

Jonesboro Mayor Harold Perrin told Talk Business & Politics he’s not concerned. Timing has a lot to do with permit numbers, and he still expects the city to eclipse the $200 million mark in 2017.

“There can be multiple reasons. Permits come out every week. Sometimes they have to wait because drawings aren’t done on time. Sometimes we tell them we need changes … we look at permits over a broader period of time rather than shorter,” Perrin said.

The numbers released are a combination of commercial, residential, multi-family, and residential duplex buildings. To date 95 permits have been issued for houses; at least 12 residential duplexes with a total of 24-units have been permitted; about 27 multi-family new buildings with 78 units have received permits; and 8 commercial buildings have received permits.

Permit fees collected are also down. This year the city has collected $109,219 in permit fees, a 29.7% drop from the same four month period in 2016, and an almost 9% drop from the same period in 2015. One bright spot is new residential duplex collections. This year $14,720 worth of permit fees in this category have been collected, more than double the previous two years combined for the same time period.

Two projects that could significantly impact the on permit numbers are two convention center projects slated to begin construction this year. Neither has started for contrasting reasons.

Work on the city supported Northern Arkansas Hotel and Convention Center (NAHCC) project has been stalled for several months. Chris Keller, the project’s CEO, has cited investor issue problems and he hopes to have them resolved in the coming months. Construction liens have been placed issued for dirt work already done on the site near adjacent to Interstate 555 near Caraway Road and the city’s hotel row.

The city’s 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. The A&P has already asked for a $75,000 payment to be returned until construction begins again.

Perrin, who publicly supported this project, formerly known as the Keller project, doesn’t think the stalled project will stop the city from reaching its permit target this year.

“We’ve been told the Kellers are working on getting their liens paid and finding another investor. The project is on hold until then, but we anticipated reaching the $200 million mark with or without the Keller’s convention center,” he 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 previously told Talk Business & Politics. The project is expected to cost about $50 million.

O’Reilly 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.

Following are the building permit totals during the last six years. The 2011 number is skewed because major construction began on the $400 million NEA Memorial Baptist Hospital.
2016: $186 million
2015: $151 million
2014: $146.162 million
2013: $126.975 million
2012: $135.847 million
2011: $273.17 million