Jonesboro may not hit record highs for building permits in 2017

by George Jared (gjared@talkbusiness.net) 75 views 

At the start of 2017, Jonesboro had two potential convention centers on the horizon, and Mayor Harold Perrin thought the city might eclipse $200 million in commercial and residential projects.

The only other time Northeast Arkansas’ hub city surpassed that amount was in 2011 when $273.17 million in construction was permitted. But that was an anomaly because construction on the NEA Baptist Memorial Hospital began. It was the most expensive project of its kind in state history at that time.

Jonesboro may not hit its historic target after all, and may struggle to surpass the 2016 permit value mark of $186 million. Through June the city has issued permits for $25.724 million in commercial projects, a 50% drop from the same six-month period in 2016. Overall permit values have been offset by rising residential construction. It spiked by almost $22 million to $49.273 million as compared to the same period in 2016. Perrin told Talk Business & Politics the decline in commercial projects may prevent the city from hitting his goal.

“We’re looking at the six month mark on building permits and I’m real pleased that residential is up from last year, as well as duplexes and multifamily. The problem is that new commercial is down significantly and we would need a pretty big project to hit the $200 million that I had anticipated we might hit. I still want to be optimistic about it, but we’ll have to wait and see,” Perrin said.

Through the first six months, the city permitted $86.402 million worth of projects, nearly identical to the $86.497 million issued during the same period in 2016. Those values include commercial, residential, multi-family and duplex building projects.

City leaders based the commercial building permit estimates on the assumption that the two convention center projects would be build during the year. One convention center project, formerly the Keller Project, is in doubt after a key investor withdrew funds. In May, Northern Arkansas Hotel and Convention Center (NAHCC) CEO Chris Keller returned $71,000 of the $75,000 the Jonesboro A&P gave to his organization to build a convention center. In a letter to the city, Keller said construction on the stalled $50 million project will resume in the coming months and it will be “coming out of the ground” within 120 days. The $4,000 not returned has already been spent on advertising and promotion.

Groundwork on a 78,000-square-foot convention center and 165-bed Hyatt Place Hotel was stopped earlier this year after liens were placed on the property adjacent to Interstate 555 near its confluence with Caraway Road just off the city’s hotel row. Keller said his legal counsel is working to satisfy the liens and allow work to proceed. Investor issues led to financial issues, but Keller said investor Carl Kaeding should help get the project back on track. The Jonesboro A&P has since voted to not give funds towards the project until it is complete.

The second convention center is slated to be built on the campus of Arkansas State University. O’Reilly Hospitality Management of Springfield, Mo., plans to build 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. It was slightly delayed by the city’s permitting process, but is expected to be completed in 2018.

New building residential duplex projects have spiked higher in 2017. Last year through June the city has issued permits for 14 units, totaling $1.179 million in project costs. That figure has ballooned to 52 units and a 226% ($3.850 million) increase this year, according to the city. Multi-family units have surged by almost 40% to $7.554 million in project costs.

Following are the total permit project values for the last several years.
2016: $186 million
2015: $151 million
2014: $146.162 million
2013: $126.975 million
2012: $135.847 million
2011: $273.17 million

Comments

comments