Jonesboro A&P to Decide on 2 Convention Center Proposals

Jonesboro A&P to Decide on 2 Convention Center Proposals
Mayor Harold Perrin says Jonesboro's Advertising & Promotion Commission probably can't afford to support both of the convention center projects that are asking for money.

Jonesboro Mayor Harold Perrin had a major goal when he was elected to the city’s top office seven years ago. Northeast Arkansas’ hub city didn’t have a convention center, and he wanted to change that.

Such a venue would help spur the local economy and be a symbol that the city was prospering. 

Now, Jonesboro has two hotel and convention center projects vying for city dollars.

"It’s a good problem to have … two options are always better than one," Perrin told Arkansas Business. "I think once a decision is reached, it will be a great asset to the city of Jonesboro."

Two competing groups, the Keller Family Hyatt group and the O’Reilly Embassy Suites group, are petitioning the city's Advertising & Promotion Commission for incentives to build large hotels and convention centers. O’Reilly has partnered with Arkansas State University to build its project on campus.

The Jonesboro A&P Commission, which collects a 3 percent local-option tax on lodging, will decide Wednesday if it will support one or both proposals. City officials say a public-private partnership is key to making a convention center-hotel project a reality, but Perrin said he’s not sure the commission can afford to back both. 

Both convention centers will be similar in size to convention centers in Springdale and Fort Smith, Perrin said.

The O’Reilly proposal will cost about $50 million, according to figures released by ASU. That includes a 40,000-SF convention center with offices and other usable spaces and a 202-room Embassy Suites Hotel.

ASU has partnered with Tim O'Reilly of O’Reilly Hospitality Management LLC of Springfield, Missouri, for the project. The O’Reilly group wants to build on a swath of land on the ASU campus near the university’s baseball field, according to Jeff Hankins, ASU's vice president for strategic communications.

The university's board of trustees approved a tentative lease agreement with the group on Friday.

The Keller group, led by Chuck Keller of Effingham, Illinois, proposes to build a convention center on the former Arkansas Services Center property near Highway 63 and Caraway Road. The Keller group proposes a 37,000-SF convention center with usable rooms and a 159-room Hyatt Place Hotel.

Perrin wasn’t sure of the exact cost of the Keller group’s proposal. Both could be finished by the end of 2017 or in 2018, Perrin said.

Incentives provided by the city are the major differences between the competing projects.

The O’Reilly/ASU group is asking the commission for an annual $200,000 hotel tax abatement for the next 18 years, Perrin said. That means the commission will allow them to keep $3.6 million in hotel sales tax money during that period, the mayor said.

The group has also requested up to $1.8 million in funding for advertising and promotion, according to figures released by the city.

The Keller group has asked the commission for a hotel tax abatement of $200,000 per year for the next three years. It has also requested an additional $300,000 to be used for advertising and promotion.

Perrin told Arkansas Business he will not publicly endorse or reject either project. The commission takes in about $600,000 per year in revenue, meaning it’s unlikely to be able to support both project proposals, the mayor said.

The benefits to ASU if a convention center is built there are numerous, according to information released by Hankins.

ASU says a convention center and hotel would expose the university to thousands of visitors each year, and another venue to accommodate potential students would spur enrollment numbers.

Large conventions could be held on campus, contributing to the local economy. ASU says a convention center on campus might lure major college and high school tournaments, such as the Sunbelt Conference baseball tournament, to Jonesboro. 

ASU is also contemplating a hospitality management major at the school, and it could attract at least 100 students per year, meaning an additional $781,000 to the university. If the center isn’t located on campus, it will be much more difficult to start the program, ASU officials said.

Perrin said there are still many hurdles to overcome if the city is to get its coveted convention center. He said he doesn’t know which proposal will win out or if the city could sustain both.

Either way, he thinks it shows how much Jonesboro has grown in recent years.

"This is a big step for us," he said.