Jonesboro's Advertising & Promotion Commission has backed out of committing $300,000 in tax revenue to the $30 million Hyatt Place Hotel & Convention Center project, saying developer Chris Keller did not provide information requested by the commission.
Keller, who is part of the Keller Family Hyatt Group of Effingham, Illinois, and CEO of Northern Arkansas Hotel & Convention Center LLC, did not immediately respond to an email for comment. Citing "serious red flags," the commission had threatened to pull its support at an April 5 meeting.
Located on a 42-acre parcel of land known as the Centre Park Complex on Brown's Access Lane near I-555, the $30 million Hyatt Place would have 147 rooms and a 40,000-SF convention center that could support 1,500 people. The project broke ground nine months ago but stalled amid liens from contractors.
The Hyatt is one of two hotel/convention centers planned for the city of 70,000. Tim O'Reilly, CEO of O'Reilly Hospitality Management of Springfield, Missouri, has a franchise agreement with Hilton Worldwide Holdings Inc. to build a 202-room Embassy Suites Hotel and a 40,000-SF convention center on the Arkansas State University campus in Jonesboro.
O'Reilly had also applied for A&P funding. But the commission, saying it could only support one of the two projects, voted in March 2016 to fund the Kellers' Hyatt. It rejected a second O'Reilly request in May 2016.
On Thursday, A&P Commission Chairman Jerry Morgan told Arkansas Business that O'Reilly had asked when he could submit a new request for funding.
"We just left it open that we'll communicate with him when he's ready to present a proposal, and we'll be glad to look at it," Morgan said.
In a May 19 letter to the commission, Keller wrote that his Hyatt project had reached an agreement with the contractors and subcontractors that claim they are owed $1.5 million. He wrote that the project was working to have the liens against it released.
Keller's letter also stated, "Please find attached a letter from Carl Kaeding" of Kaeding Management Group LLC of Minneapolis, Minnesota, an investor in the project. But Morgan said the letter from Kaeding was not attached and the commission hasn't received a copy of it.
The commission had also asked that the lienholders be paid by the time Morgan sent his letter. Arkansas Business contacted attorneys for the contractors to see whether they've been paid and will update this story.
Returning Money
Keller wrote in the May 19 letter that the project had returned just over $71,000 of the $75,000 the commission gave it earlier this year. Morgan said the commission would not request that the rest of the money — about $4,000 — be returned because it has proof that the money was spent to advertise the project.
The May 19 letter also said the project would not request any more money from the commission until the Hyatt hotel and convention center are complete.
"Once they get the project completed, they are more than welcome to come back and apply for additional funding in the future, if they want to do that," Morgan said. "Our hopes are that it moves forward, and we're hopeful the vendors get paid and they're able to start building soon. That's what they've conveyed to us and we're hopeful that does happen, and we'd be glad to look at additional requests in the future."
The architect’s final plans are expected to be ready to submit in 60 days, and the project is expected to be "coming out of the ground" within 120 days, Keller wrote in the May 19 letter.
Morgan said the money it had committed to the Hyatt project would now be spent on local projects for which the commission had cut funding. Those local projects include the Downtown Jonesboro Association, which will now receive another $20,000; the Downtown Jonesboro BBQ Fest; the NEA Baptist Charitable Foundation's Duck Classic; Hispanic Community Services Inc.; and a Jonesboro bowling tournament.