Jonesboro panel OKs tax break for hotel

The Jonesboro Advertising and Promotions Commission approved a proposal on Friday that would provide a maximum of $2.5 million in incentives to O’Reilly Hospitality Management of Springfield, Mo., to build a seven-story, 203-room Embassy Suites hotel and 40,000-square-foot convention center on property owned by Arkansas State University.

But O’Reilly won’t receive any of that money until the hotel is generating revenue, said Jerry Morgan, chairman of the commission.

Morgan said the commission voted 5-0 to provide O’Reilly with a rebate of the city’s 3 percent hotel tax for 10 years with a cap of $2.5 million.

“The city’s not on the hook for any of the risk from the cash flow or anything like that,” Morgan said.

The construction is expected to cost $43 million. The entire project, including furniture and fixtures, will be about $61 million, Morgan said.

O’Reilly is also required to ensure that construction starts within 90 days. Clark Construction of Little Rock is the general contractor.

Initially, O’Reilly wanted $300,000 up front, but “we didn’t agree to that,” Morgan said.

The commission made an

agreement with another developer who had started work on a hotel and convention center last year, but that project ground to a halt as the foundation was being laid.

Morgan said the commission had promised $300,000 upfront in that situation, and was able to recoup the $75,000 that had already been paid.

“The financial stability of the O’Reilly group brings us a lot of comfort,” Morgan said.

Shawnie Carrier, executive

director of ASU’s Delta Center for Economic Development, said Friday was a great day.

“I’ve been working on this project for four years,” she said. “I’m still in shock, but in a good way. We have come to the point where we can now move forward.”

Carrier said it will be the only “upper upscale hotel” in Jonesboro.

The hotel will be located on Red Wolf Boulevard, on the site of an old track just south of Alumni Drive and ASU’s Centennial Bank Stadium.

Jeff Hankins, vice president of strategic communications

with the ASU system, said the university will have a land lease agreement with O’Reilly.

Hankins said O’Reilly Hospitality and ASU entered into a 50-year lease, with an option for O’Reilly to renew for an additional 40 years.

Tim O’Reilly, the chief executive officer at O’Reilly Hospitality Management, couldn’t be reached for comment Friday afternoon.

O’Reilly’s management portfolio includes the Holiday Inn Little Rock Airport Conference Center and Boston’s Restaurant and Sports Bar in Little Rock.