Jonesboro building permit numbers drop 21% in 2017

Northeast Arkansas’ hub city has shown strong economic growth in different sectors, but in 2017 the city’s building permits dropped significantly after an all-time high in 2016. The city issued $147 million in commercial and residential permits last year, a 21% drop from the previous year. It’s a 2.6% drop from 2015.

Jonesboro Mayor Harold Perrin told Talk Business & Politics city leaders believed at the start of 2017, the city might issue $200 million in permits, but those projections hit a snag when construction on two proposed convention centers was delayed. The mayor remains optimistic the city will return to form in 2018.

“These are hard to predict, because developers will buy permits and get started one year and spend the next year developing. Our numbers are less than I expected, but I expected our convention center to be a part of 2017 at this time a year ago,” Perrin said. “One good commercial project would have put us right back where we were last year, and I anticipate to happen next year. Our inspections department has been going full speed as always, so I’m sure we are in good shape.”

The city approved $85.732 million in commercial building permits last year. Commercial building ($45.639 million) was the highest subset, followed by commercial alterations ($18.811 million). The city issued $15.794 million in commercial multi-family building permits, and $5.191 million in commercial additions.

More than $61.757 million in residential construction permits were issued. Residential single family dwelling ($52.311 million) was the highest subset, followed by residential building-duplex ($6.385 million). More than $1.526 million in permits were issued for residential additions, and another $1.202 were issued for residential alterations.

O’Reilly Hospitality Management had hoped to start construction in 2017 on a hotel/convention center on the Arkansas State University campus. Permit issues, spiraling costs, and other factors delayed the project.

The Jonesboro A&P Commission agreed in November to give up to $2.5 million in hotel tax rebates for the proposed hotel/convention center. O’Reilly Hospitality Management will keep the hotel taxes collected after its 203-bed Embassy Suites hotel, Houlihan’s Restaurant, and the proposed 40,000-square-foot Red Wolf Convention Center open. The agreement is for 10 years after the open date, but is capped at $2.5 million.

OHM CEO Tim O’Reilly had previously asked the city to give his group $300,000 to market and advertise the project in addition to hotel tax incentives but that isn’t part of the deal, Campbell said. OHM has 90 days to begin work on the project or the agreement will be voided.

The timetable for construction will be set by OHM, not the university. ASU and OHM have an initial 50-year lease agreement that can be extended another 40 years. Starting in the 4th year, OHM will pay ASU $250,000 annually, and then starting in year 10 the amount will rise by a positive percentage difference based on the federal consumer price index. The university will also receive other benefits such as yearly room stays and others.

O’Reilly initially believed the project would cost about $35 million when it was first proposed in 2015. Since then, the price has grown to an almost $60 million price tag. A construction start date has not been released.

Northern Arkansas Hotel and Convention Center’s planned to build a 78,000-square-foot convention center and 165-bed Hyatt Place Hotel just off Caraway Road along the city’s hotel row, but a primary investor has not allocated funds. Construction on that project stopped in the spring of 2017 after footings were poured. Several lawsuits have been filed for non-payment, and there is little optimism the project will move forward.