Building projects set record pace in Jonesboro during the first five months of 2018

Jonesboro Mayor Harold Perrin predicted in 2017 the city would issue building permits for $200 million in commercial and residential building construction. Two delayed convention center projects caused his estimate to fall short, but during the first five months of 2018, it nearly happened.

Since Jan. 1, the city has issued $177.54 million in permits, more than the $147 million issued in all of 2017, according to the city.

Jonesboro has nearly eclipsed the all-time yearly record of $186 million set in 2016. The city issued $273 million in 2011, but it was an anomaly. Those permit numbers were fueled by the construction of NEA Baptist Hospital, the largest project of its kind in state history at the time. The permit numbers this year are fueled by an expansion project at St. Bernards Medical Center ($85 million) and the long awaited start of construction on the convention center/hotel project on the Arkansas State University campus estimated to cost around $60 million. To date, $39 million in construction permits have been issued for the project.

Residential building permit numbers for the first five months totaled $27 million, up 35% compared with the same period in 2017.

“It’s looking good,” Perrin said. “We are doing good on building permits … we have a lot of new subdivisions being built … our population continues to grow.”

ST. BERNARDS WORK
St. Bernards has completed the second phase of a four-phase plan to renovate its entire campus. The Heartcare Center is finished, Vice President of Affiliated and Senior Services Kevin Hodges told Talk Business & Politics.

The $137.5 million project is expected to be completed by the end of 2019, and will increase the building space on the campus by 25% to 1.02 million square feet, he said. More than four years ago, administrators decided to formulate a plan to renovate and streamline services, he said.

“Phase three is really exciting because folks are seeing the steel go up on a 250,000-square-foot facility that will offer high intensive and critical care services, as well as an expansion of our surgery department,” Hodges said. “We are moving toward opening the new tower in fall of 2019. We are seeing a lot of progress and growth moving forward.”

Four areas were targeted: cancer care, heart care, surgery and intensive care.
The first phase involved a revamp of the Ben E. Owens Cancer Treatment Center. It was completed in August 2016. Two cath labs are under construction, and when complete, the $10 million Heartcare Center will be finished, Hodges said. It will have new electrophysiology and hybrid labs, and the old cardiac catheterization lab has been renovated, along with a 30-patient preparation and recovery area and other updates.

The third phase involves the construction of a five-story, 245,000-square-foot surgical tower. Numerous surgery-related services, a chapel, critical care areas and others will be housed in the tower. To build the tower, the St. Bernards Annex had to be demolished, Hodges said.

Tower construction and a reconfiguration of the emergency room/services department will begin next year and cost about $75 million. It’s slated to be completed later this year. The fourth phase is a renovation of the existing medical center. Patient rooms, as well as designated public areas, will be remodeled. Kitchen and dining spaces will also receive updates.

CONVENTION CENTER PROJECT
O’Reilly Hospitality Management (OHM) broke ground in February on its proposed $60 million convention center/hotel project on the ASU campus. Footings have been poured and concrete work is finished, said Tim O’Reilly, OHM CEO. After the project was stalled for more than a year, O’Reilly said there have been no setbacks since construction began, and it should be completed in July 2019.

OHM, based in Springfield, Mo., plans to build a 202-bed Embassy Suites Hotel, a 40,000-square-foot Red Wolf Convention Center and a Houlihan’s Restaurant. Records from the Jonesboro Regional Chamber of Commerce and the Arkansas Economic Development Commission (AEDC) show O’Reilly previously said at least 430 jobs would be created directly or indirectly as part of the convention center project, with a $44.41 million impact on the local economy. Of the estimated 430 jobs, 300 would be at the convention center with the rest coming from other sources.

By 2015, two competing projects, one by O’Reilly and another by Northern Arkansas Hotel and Convention Center (NAHCC) emerged. Originally called the Keller project, NAHCC proposed to build a 78,000-square-foot convention center and 165-bed Hyatt Place Hotel on the property adjacent to Interstate 555 near its confluence with Caraway Road just off the city’s hotel row. It was estimated to cost about $50 million.

ASU approved the O’Reilly project in February 2016. ASU and OHM agreed on a 50-year lease that can be extended another 40 years. Starting in the fourth year, OHM will pay ASU $250,000 annually. Starting in year 10, the amount will rise by a positive percentage difference based on the federal consumer price index. The university will receive other benefits such as yearly room stays.

Perrin said several times the city probably couldn’t support two convention center projects, and he went against ASU to place his support behind NAHCC. In a controversial 3-2 vote, the Jonesboro A&P commission voted in March 2016 to give NAHCC $300,000 in $75,000 installments. NAHCC was also expected to get up to $600,000 in hotel tax credits.

OHM was rejected when it asked the A&P for a series of six, three-year contracts for its project, starting in late 2017 or early 2018. The amounts ranged from $157,302 the first year, $177,274 the second year and $200,000 in year three. The proposed agreement would have put a $200,000 cap on hotel tax abatements and would have guaranteed a $200,000 per year payment to help with marketing the convention center.

Groundwork on a 78,000-square-foot convention center and 165-bed Hyatt Place Hotel began in early 2017, but was halted later that year after liens were placed on the property. The project never resumed.

When NAHCC returned the money, it opened the door for the A&P to support OHM. The A&P Commission agreed in November 2017 to give up to $2.5 million in hotel tax rebates for the proposed hotel/convention center. The agreement is for 10 years after the open date, but is capped at $2.5 million.