Projects across Pine Bluff grind to halt as funds evaporate

A growing number of construction projects across Pine Bluff have ground to a halt leaving barren lots and delayed results. The culprit? A critical lack of funding.

Be it the ambitious go-kart track, a planned development that was set to kick-start a revitalized East Harding, an affordable housing complex intended to address the city’s growing housing crisis or what city officials say is a much-needed Convention Center hotel known as the Marriott, projects large and small have fallen victim to the funding shortfall.

Ryan Watley, CEO of Go Forward Pine Bluff, the driving force behind many of the projects, highlights a convergence of elements that have exacerbated the construction industry’s ongoing crisis. Those elements include the escalating cost of materials, disruptions in supply chains and an unpredictable economic environment, all of which have collectively contributed to the heightened expense and financial risks associated with construction projects. Concurrently, the availability of public and private financing has diminished, leaving developers grappling with securing adequate capital to materialize their projects.

GO-KART TRACK

The go-kart track, Watley stated, awaits the building’s design to estimate the project’s cost. Initially scheduled for a 2023 opening, the project underwent a budget-focused elimination process to stay within financial constraints.

“Once that comes back we will put the project out to bid so we’ll know the pricing on it,” said Watley, who said fundraising for the project and discussions with potential investors are taking place. “We may need more funds to complete the project. We may be within budget, we may be over budget.”

In 2022 the Pine Bluff Urban Renewal Agency planned to build a $697,098 state-of-the-art go-kart track and an 18-hole mini-golf course on a vacant lot at 2100 East Harding, transforming it into family fun entertainment. The plans included 13 go-carts, an entertainment facility and a dual restaurant with restaurant-grade appliances.

But the project was over budget, so Urban Renewal went back to the drawing board in 2023 with a revised go-kart track only, eliminating the entertainment facility.

“We went through some different things to try to eliminate some things to see if we could get within budget and we got those numbers back and we were still over budget,” said Urban Renewal Executive Director Chandra Griffin in a previous interview with The Commercial. “So we had to go back to square one. We said we were going to build a go-kart track so that is the primary focus.”

At that time, Griffin also said there was a memorandum of understanding agreement with The Generator, which will be responsible for finding an operator. As far as concessions were concerned, Griffin said space for food trucks would be available. She also said the architect would draw in a concession stand with a covered building that would house the restrooms and the entrance pay area.

In September of 2023, the Pine Bluff Urban Renewal Agency approved a letter of intent to award Ratliff Enterprises Inc. and Big Banjo Pizza Parlor Inc. with a public-private partnership as the go-kart track food and beverage vending company at 2100 E. Harding Ave.

According to Griffin, the space would be leased in the go-kart track building that would house the food vendor and the ticketing to get in the facility and the go-karts. “They will be supplying their actual kitchen equipment at the space,” said Griffin.

The opening of the go-kart track was planned for fall 2023, then moved to the spring to coincide with Big Banjo’s 50th anniversary, which was celebrated last month.

CONVENTION CENTER HOTEL

Last week, Pine Bluff Convention Center Executive Director Joseph McCorvey revealed that an additional $1.4 million is required to finalize the construction of the proposed Courtyard by Marriott hotel project, which is budgeted at $24 million. The project entails the construction of a 125-bed hotel.

Due to a significant increase in the initial hotel bid, finalized two years ago, additional funding has become necessary for the project’s progress, as explained by McCorvey.

To meet this need, a 32-year, $18 million U.S. Department of Agriculture-backed loan has been secured through Farmers State Bank of Harrisburg, Ill. However, an additional $1.4 million is still required to cover the demolition of the current hotel and architect and administrative fees.

“We are still getting estimates and bids to finalize the gross maximize price,” said Watley. “Once they do that we can close on the loan.”

Due to an administrative setback, Pine Bluff Mayor Shirley Washington reported that a misplaced file resulted in a significant increase in the initial hotel bid, which had been finalized two years ago. Additional funding is now necessary for the project’s progress, as explained by McCorvey.

“By the time our file was found we had lost a lot of time and now the cost of construction had gone up by $800,000, which was the same amount for demolition,” said Washington. “We thought we could do demolition separately, but they don’t want us to do the demolition separate because it puts a separate lien on the property.”

To ensure the project’s viability, Washington emphasized that the construction cost includes the demo cost, so it must remain unchanged. Currently, they are actively seeking additional funding to complete the project.

According to McCorvey, the deadline to take action for the USDA guarantee is in September. The P3 Group, which has been involved in various projects across Pine Bluff, and management group Beechwood Pinnacle Hotels will provide a $1.9 million loan as subordinated debt. Additionally, $2.9 million from the 2017 Go Forward Pine Bluff sales tax — money that had already been appropriated to Urban Renewal for other projects — will be used. The city contributed land valued at $1.2 million to the project.

Contrary to the circulating rumors about the P3 Group’s withdrawal, Watley said such claims are inaccurate. “No one has pulled out, not Marriott, not anyone,” he said. “The P3 Group has been a great partner and is shepherding a lot of the shouldering and work to get the project within the budget and additional capital and advising us on how to obtain whatever may be needed.”

Watley said by September 2024 decisions will have to be made on the hotel, but the money saved by the city’s allocation and the USDA are the top two things that make this project viable.

SIXTH AND CONVENTION HOUSING

In October 2023, Go Forward Pine Bluff initiated a groundbreaking project for The Flats on Sixth, a 124-unit mixed-use apartment complex. Strategically situated at the southeastern corner of Sixth Avenue and Georgia Street, this development aimed to serve as a gateway for housing in the heart of Pine Bluff. Its prime location offered convenient access to the downtown art district and the Convention Center, making it an ideal residential destination.

Watley revealed that the $8.5 million upscale complex project is now on hold due to funding issues. The public-private partnership between the city and the Dallas-based Cedar Crest Development was initially planned. However, the project faced a setback when the Go Forward-sponsored sales tax renewal was defeated in November, causing the investors to withdraw their support.

In a previous interview with The Commercial, Washington said she received information that the Dallas-Fort Worth-area companies Cedar Crest Development and KEE Concrete and Construction would not be able to move forward because of projects that were already underway.

Watley said Go Forward had put out “feelers” for other investors. Though he did not mention which investor he was working with, he did say they were working to get more capital.

“We believe we have a pathway forward, but right now that project is on hold until we get that final pricing number,” he said. “We have some new investors that are looking at it.”

According to Watley, constructing apartments downtown is one of the more challenging projects due to the substantial capital required and the specific market demands.

“We have a capable investor at the table and a new investor but are waiting on one more estimate for construction,” he said. ” One estimate is within budget and the other estimate exceeds the budget so a third estimate is needed to see which one is right.”

SIXTH AND MAIN

Scheduled for completion at the end of the month, the food hub at Sixth and Main appears to be making significant progress. According to Watley, entrepreneurs are being prepared to occupy the space and establish the necessary administrative structure.

In October, vendors were announced to occupy the space. While some stakeholders anticipate positive outcomes, others are bracing for potential challenges. Bruce Lockett, a City Council member and chair of the Development and Planning Committee, expressed concern about the sustainability of properties formerly owned by Urban Renewal, which have now become the city’s responsibility.

Lockett announced that a resolution regarding the Sixth and Main project has been withdrawn. The purpose of the resolution was to ratify an agreement between the Urban Renewal Agency and Simmons Bank regarding the donation of the property and $2 million from Simmons to the city. However, the council members prefer to meet with the Simmons, Go Forward and other potential partners before finalizing the agreement.

“We got to have the ins and outs of what it’s all about,” said Lockett. “Right now it’s something that they have 100 percent of what’s done and the council really doesn’t have a clear understanding of the clauses. We need to have a sit-down meeting and now that it is in the council’s lap, how will we as a council see this thing going forth.”

To complete the project, Urban Renewal approved a legal agreement with Simmons Bank regarding their property donation and a $2 million donation. However, several council members expressed discomfort with this arrangement, which effectively makes the project the city’s responsibility. The project needs the $2 million to be completed.

When the bank transferred the property to the Urban Renewal Agency, a $4 million tax was imposed, with $3 million of that going to the agency, according to Lockett.

“Without a doubt, if that was still in place we wouldn’t be having this conversation,” he said.

OTHER PROJECTS

Continuing her focus on ongoing projects, Mayor Washington expressed her commitment to ensuring a smooth transition for the incoming mayor by actively working to finalize and hand over these initiatives.

“We are continuing to work with the Southeast Housing project,” she said. “I am working with the flood mitigation process because we can’t submit our application as long as it is in the flood zone.”

Initially, when the property was acquired, the plan called for building 96 affordable homes on the 29-acre lot. In December 2022, the Pine Bluff City Council voted unanimously (8-0) to approve a $664,100 contract for demolishing the school buildings. During several City Council meetings, estimates for dirt work associated with the project were discussed, totaling approximately $1.5 million. The demolition was funded using the city’s American Rescue Plan Act funds.

The revamped layout of the development showcases the site plan and floor plans for multifamily stacked flats. The unit breakdown consists of six 1-bedroom flats, 46 2-bedroom flats, and 18 3-bedroom flats, offering a range of living options.

In addition, separate housing units on Ohio Street are in the flood mitigation phase. That project involves the construction of 60 units of senior citizen living and 60 units of multifamily housing.

In the first half of the year, the City Council authorized the real estate contract for Southeast Estates L.P. in an official resolution. The agreement permits the development of housing on city owned land at 2001 S. Ohio St.

“The developers explained with this property we are moving over to them they are going to apply for a $20- to $22-million grant to build 60 units for low-income and 60 units for the elderly,” said Lockett. “The city has $1 million invested in the property. With the Southeast Estates developing the property, we’ll get the value of the $20 million grant that they will receive. I think that’s a great investment — the city invests a million dollars and gets a $20 million return.”

CONCERNING OUTCOMES

In addition to the eyesore of unfinished downtown buildings and vacant lots, some residents have said they feel they have been let down by unfulfilled promises of improved infrastructure, new housing options and better public spaces. City officials, sensing urgency, have actively sought solutions, considering options like public-private partnerships and alternative financing methods. While progress has been slow, Watley emphasized his commitment to collaborate with developers and community stakeholders to find viable solutions aiming to bring properties into productive use.

The expiration of the tax, in his opinion, doesn’t affect the city’s future potential, particularly with regard to Urban Renewal.

“The tax does not determine that commission’s life. It’s more so if that commission and the city still want it to be functioning,” he said. “Yes the funding mechanism behind it came from the 2017 sales tax, but there are some things Urban Renewal can do particularly with Sixth and Main and the go-kart track, which are revenue generators to help sustain the agency.”

Watley suggests that the city consider adopting Urban Renewal’s successful approach to demolishing homes. He believes it might be a beneficial strategy for the city to pursue.

Watley said he is dedicated to his projects and is committed to working until his assistance is no longer essential. In a recent update, he highlighted several community initiatives, such as programming at The Generator, enhancements that foster community engagement, the Neighborhood Enhancement Act, the ALICE Program and programs aimed at educating senior citizens in computer skills.

Although residents acknowledge the effort put forth, a substantial number of them yearn for any project to be finished.

During a recent council meeting, Pine Bluff resident Jihad Muhamad voiced concerns about the completion of promised projects approved by the council. He said that a new administration would be in place in seven months, raising doubts about the continuity and progress of these projects.

“I don’t understand how there are so many deficiencies in these budgets when all of these feasibility studies were done and you all said you were on top of this,” he said to the council members. “When the Go Forward Pine Bluff tax was not renewed, Ryan Watley spoke to the media and said that there were $29 million in the bank to complete these projects.”

Muhumad told The Commercial after the meeting that residents are left to grapple with the uncertainty and frustration of watching their city’s future plans crumble before their eyes.

Concerns are rife that the stalled projects could be a harbinger of large-scale economic decline along with the population decline, whereas some remain optimistic that the city will surmount these hurdles.

The outcome of these incomplete projects is yet to be determined, and they have revealed some flaws in the growth strategy of the entities involved. Despite difficulties, there have been some achievements. Watley stated that he will keep concentrating on the projects and relationships.

“We must complete the projects on the table and make sure they are sustainable to a point where the city is in a good position to thrive,” he said. “We do not want to open something today and they close tomorrow.”

Mayor Washington said she believes a city tax is necessary. However, she acknowledges that the city can maintain its stability even without implementing a tax.

“Our revenue has been going up on a constant basis,” she said. “If we continue to manage the way we are managing, we will be in a good place.”