Metro-East News

Family developing Hofbräuhaus loses $300K marketing support for Arkansas hotel

Hofbräuhaus developers return project money to Arkansas city

Jonesboro, AR, city leaders met May 31 and reported the Keller family returned most of the $75,000 the city gave them for a hotel project. City leaders asked for their money back when the Arkansas hotel project stalled, but the Kellers said they h
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Jonesboro, AR, city leaders met May 31 and reported the Keller family returned most of the $75,000 the city gave them for a hotel project. City leaders asked for their money back when the Arkansas hotel project stalled, but the Kellers said they h

The Jonesboro, Arkansas, commission that had agreed to provide $300,000 for marketing a Hyatt Place hotel being developed by the Keller family of Effingham has withdrawn the funding.

The Keller family also is developing the partially built Hofbräuhaus in Belleville and has proposed a $28 million Hyatt Place next to the Hofbräuhaus off Illinois 15, across from the National Shrine of Our Lady of the Snows.

The Jonesboro Advertising and Promotions Commission said it would no longer support marketing for the Hyatt Place because Chris Keller had not given the board a letter of commitment from an investor in the project.

Keller could not be reached for comment.

Keller had sent the commission a letter saying that work would resume on the stalled construction project and that he had attached a letter of commitment from a Minnesota investor in the project. However, Jonesboro officials said they never received the attached letter of commitment.

“It stated the project was moving forward but it did not provide the items we requested,” commission Chairman Jerry Morgan said about Keller’s letter during a meeting Wednesday. “It also referenced an attached letter of commitment from an investor. We did not get the attached letter. We’ve requested that a couple of times and still have not received it.”

We did not get the attached letter. We’ve requested that a couple of times and still have not received it.

Jerry Morgan, chairman of the Jonesboro, Ark., Advertising and Promotions Commission.

The commission had sent Keller a letter in April asking him to respond to the commission by May 19.

“Based on our letter that we sent, with our deadline, we are no longer committed to funding that project,” Morgan said.

“They are welcome to reapply in the future, but my opinion is the project needs to be finished before we review any requests based on the recent history of events,” said Morgan, who previously said delays in the project raised “serious red flags.”

Keller said in his May 19 letter to Jonesboro officials that he would not give the commission an irrevocable letter of credit for the commission’s $300,000 commitment because he would not request funding support until the project is complete.

Keller also said Carl Kaeding of the Kaeding Management Group LLC in Minnesota will back the Hyatt Place project in Jonesboro.

Kaeding could not be reached for comment.

Last year, the Jonesboro Advertising and Promotions Commission agreed to give Keller, CEO of Northern Arkansas Hotel and Convention Center LLC, $300,000 in funding for marketing, with $150,000 to be provided in 2017, $100,000 in 2018 and $50,000 in 2019.

Keller received $75,000 earlier this year but has since returned about $71,000. Morgan said about $4,000 was spent toward advertising the Hyatt Place hotel and convention center project planned off Interstate 555.

Construction on the Hyatt Place halted earlier this year after contractors had not been paid.

On May 10, the general contractor for the Hyatt Place filed a mechanic’s lien for $1.5 million against the construction site claiming it had not been paid, according to court records.

In Belleville, the Keller family in November proposed building a Hyatt Place hotel with a $30 million commitment from ICON Commercial Lending. But work did not begin this spring as announced and ICON is facing a federal lawsuit in Michigan alleging the company did not provide $12 million in financing to two real estate agents.

Ron O’Connor, spokesman for the Keller’s Belleville project, said a completion date for the Hofbräuhaus has not been set but he noted that crews were working on the German restaurant and brewery every day this week except for the Memorial Day holiday on Monday. Construction on the $12 million Hofbräuhaus began in late 2015.

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