Talk Business & Politics Nov/Dec 2014 by Talk Business & Politics

November/December 2014

General Wesley Clark On War & Peace Arkansas’ Labor Pool The Service Sector Rises Walmart to Go The Grand Brand Experiment Hot Springs Heats Up Election Central The Final Countdown to Nov. 4 Tom Schueck’s Steel Resolve Jeff Amerine What’s Missing in the Startup Ecosystem?

Bill Clinton

The Downtown Decade By John Brummett

Bold Profiles:

Raymond Chung, Cruncha Ma-Me When looking for the ideal location, Raymond Chung, CEO of Cruncha Ma-Me, found exactly what he needed in Arkansas. “We are turning Arkansas into the Edamame capitol of the U.S.A,” says Raymond, “and we eventually want it to be the capitol of the world.” Edamame is becoming one of the fastest growing specialty foods in America. Raymond’s company understands the importance of growing locally. “As Americans become more aware of where their food is coming from, they really want made in the U.S.A.” Raymond partnered with the University of Arkansas Biological Engineering Department to develop a process for growing and harvesting edamame on American soil. That partnership led to Cruncha Ma-Me putting down roots in Mulberry, Arkansas. Today they are supplying Sam’s Club, Whole Foods and Costco with the snacks their customers love to eat. Arkansas favors Cruncha Ma-Me with advanced research and abundant natural resources. How can Arkansas favor you? Learn how at ArkansasFavorsTheBold.com.

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Contents November/December 2014 5 Publisher’s Letter

Commentary

7 Jeff Amerine

The Startup Ecosystem

8 Amy Whitehead, UCA Inside the Numbers

55 General Wesley Clark

Let’s Don’t Wait for the Next War

65 Janet Harris

State Government Needs Big Data

42 Point Counterpoint

David Couch & Brian Richardson Expanding Alcohol Sales Profiles

24 Few

Getting Bigger & Better

28 Downtown El Dorado South Arkansas Oasis

56 Hometown, Arkansas

The Hot Springs You Never Knew Insights

32 Big River, Big Opportunity 71 Wal-Mart Gets the Picture Guy 44 Numbers More Than Just Songs 69 68 66

Regional Northwest Arkansas The Compass Report Ahead of Schedule Walmart to Go Northeast Arkansas

70 The Dixie Pig 72 Cashing In on Tourism 73 Jonesboro Chamber Reaches Out Industry

46 Agriculture

Against the Grain

49 Agriculture

Game Changer Energy

50 A Biomass of Promise 81

In-Depth A New Workforce Under Construction

Leadership Customer Loyalty Building Your Brand

Story: Bill Clinton’s Global Downtown Vision 10 Cover Clinton’s selection for placing his presidential library sparked a downtown renaissance a decade in the making. What’s next?

Features

74 Business: State’s Labor Pool in Transition

Arkansas is now home to a fast-growing service sector.

34 Politics: Up and Down the Ballot

A full plate of candidates and ballot measures define this November as a seminal moment in Arkansas politics.

Executive Q&A

96 Tom Schueck Man of Steel

COVER ILLUSTRATION: SHAFALI ANAND

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TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

From the Publisher

Next Steps Talk Business & Politics is owned by River Rock Communications and is published six times a year. For additional copies, to be included in our mailing list, or for information about advertising, contact Katherine Daniels at katherine@talkbusiness.net. November/December 2014 Publisher & Editor-in-Chief Roby Brock roby@talkbusiness.net Art Director Bryan Pistole DesignMatters LLC bryan@designmattersllc.com Editor Bill Paddack wbp17@comcast.net Contributing Writers Larry Brannan Steve Brawner Jeanni Brosius Wesley Brown John Brummett Kerri Jackson Case Michael Cook Paul Holmes Rex Nelson Ethan Nobles Casey Penn Ben Pollock Bob Qualls Ryan Saylor Kim Souza Michael Tilley Jason Tolbert Michael Wilkey Photographers Trey Ashcraft treyark@yahoo.com Stephanie Dunn dunnmsteph09@yahoo.com Tim Rand pix@trand.com Bob Ocken bob@ockenphotography.com Kat Wilson katographic@gmail.com Vice President Operations Stephanie Baker stephanie@talkbusiness.net Vice President Sales & Marketing Katherine Daniels katherine@talkbusiness.net

I speak to a lot of groups – nearly one every week if not more often than that. People are curious about what’s developing and what’s to come in business and politics, and I find the exchanges and dialogue informative to keep up with the curiosities of our audience and to pick their brains on topics likely to stir their interests. Recently, I’ve had the occasion to visit with several younger groups, which remind me of me when I was their age. These 20- and 30-somethings are making their way in the world, paying their dues and climbing the corporate ladder in many instances. I recall the impatience I once felt sitting in their shoes. In putting together this issue of our magazine, many of our topics led me to reminisce about my more youthful days when I watched the leaders of my time embark on ambitious plans to build this state in their vision. This magazine issue focuses on the fruits of their labor as we explore stories from Little Rock, North Little Rock, Northwest Arkansas, Hot Springs, El Dorado, the Fort Smith and River Valley region, Jonesboro and Northeast Arkansas, and many places across the Delta. More than a decade ago, I produced a documentary about the Downtown Little Rock renaissance and its potential. The city had invested in the River Market; Bill Clinton had chosen the east Little Rock site for his presidential library; and Acxiom had positioned its corporate headquarters as an anchor in its shadow. Argenta’s rebirth was barely scratched out on a napkin. Skip Rutherford, now dean of the Clinton School of Public Service, was interviewed as part of this documentary and I paraphrase our conversation that has stuck with me all of these years. Skip said his generation had defined this city space in its vision and it was up to the next generation to carry it forward and add/alter/create its vision for what a city and state could become. Seeing what has happened in downtown Little Rock and North Little Rock – and witnessing many similar efforts in all pockets and corners of the state – those words from Skip sank in anew when I was before the latest attentive audience. Reading and editing stories for this issue, it is obvious that so many of those seeds that were planted in the late 1990s and early 2000s have really blossomed. You see fruits of labor all over the state from generations who led a decade or two ago. To our younger readers and a younger generation, step up. Your elders are happy to pass the torch and your impressions of what Arkansas can and should be are something we’re all ready to witness – and report. Sincerely,

Printer John Parke Democrat Printing & Litho jparke@democratprinting.com River Rock Communications 8308 Cantrell Road Little Rock, AR 72227 501.529.1737

Roby Brock Publisher & Editor-in-Chief www.talkbusiness.net

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

Commentary

The Arkansas Venture Scene: What’s Missing? By Jeff Amerine Jeff Amerine

ver the past 10 years, Arkansas has developed numerous sources for seed-stage capital. These include public sources such as the Arkansas Science and Technology Authority (ASTA) Seed Capital Investment Program (SCIP) and the Arkansas Development Finance Authority (ADFA) Risk Capital Matching Fund (ARMCF) as well as private sources such as the Fund for Arkansas’ Future, Gravity Ventures, Tonic NWA Fund, New Road Ventures, Torch Fund, Tech Rock Fund, Natural State Angel Association, Arkansas Angel Network and Union County Angels just to name a few. Even with that considerable growth in angel funding, startup ventures in the state are still largely reliant on out-of-state venture funds for investment rounds of greater than $500,000. Moreover, while the ADFA Arkansas Institutional Fund has done an excellent job in investing in out-of-state venture funds such as Noro Moseley Partners, Fulcrum Equity Partners and others to encourage Arkansas investments, more needs to be done to ensure adequate Series A (and beyond) funding sources are available. Otherwise, growing ventures will either stall or move to regions where needed growth capital is available.

both the growth stage funding that is currently absent to promising in-state ventures, and to also act as a significant attractant for promising ventures in these sectors that are currently located elsewhere. In addition, formation of such a fund would finally create a good partner for syndication with out-of-state venture firms that have coverage for Arkansas.

CURRENT INITIATIVES For the past year or so, business leaders and angel investors in Northwest Arkansas have been working to define a structure for a sector-focused $50M-$100M venture fund. This effort is intended to aim at retail technology, supply chain technology, and supporting digital and data analytics company investments that are here in the state and nationwide. The investment thesis would be to provide

POSSIBLE ALTERNATIVES OR ADDITIONS: VENTURE DEBT Several discussions have occurred around focusing on an alternative to a typical equity focused venture fund. One such approach would be to emulate the Silicon Valley Bank (SVB) model with a venture debt structure. SVB typically provides the debt portion of a venture round in conjunction with a well-established venture fund. Arkansas could do something similar.

CHALLENGE: LIMITED PARTNER FATIGUE One of the significant challenges facing all newly forming and existing venture funds is the general fatigue of the traditional limited partner (LP) institutional investors. Post 2001, exits (which are the means by which investors get a return) have primarily been driven by acquisition rather than public offering and as a result LP investments in venture funds are tied up for longer periods of time. As an asset class, venture capital faces this significant hurdle as LPs are concentrating their allocations in fewer and fewer venture capital firms. This LP fatigue with venture capital as an asset class will pose a significant challenge to the formation of a venture fund of consequential size. This will be especially true in the case of an unproven management team leading the fund.

Such an approach for Series A and later investments would give the venture debt fund and investors in the fund, a lower risk and potentially more timely return. In addition, some equity upside would be possible with warrant (warrants are the right to purchase stock in the future, typically at the time of a liquidity event at a discount) coverage. Based on inputs from those knowledgeable in both banking and venture capital, the time might be right to explore such an alternative in more detail. In addition, revenue-based finance (akin to the ASTA SCIP non-dilutive royalty structure) could be considered for cash-flowing businesses with solid margins that are not yet “bankable.” Overall, the time appears to be right to consider alternate financial structures as traditional equity focused exits are still rare and stretched out over longer periods of time. NEXT STEPS Flagship business leaders, startup leaders and policymakers around the state, including Accelerate Arkansas (the catalysts behind Innovate Arkansas and the Arkansas Research Alliance) and the Northwest Arkansas Council, are giving these issues serious consideration. Out of necessity and frankly due to a growing pipeline of quality deal flow, my prediction is that Arkansas will have several new sources of savvy growth capital within the next three to five years. Sooner is better than later. Let’s get after it! Jeff Amerine, PMP, is Associate Vice Provost/Research & Economic Development, Director/Technology Ventures and Adjunct Faculty/Entrepreneurship at the University of Arkansas. He is also Advisor for Innovate Arkansas. www.talkbusiness.net

Commentary

Inside the Numbers Checking on economic activity in the first seven months of the year. By Amy Whitehead Director, University of Central Arkansas Center for Community and Economic Development Amy Whitehead

his edition of Inside the Numbers resumes its focus on economic data for 12 Arkansas cities, with a look back at the first seven months of 2014, and how those months compare to the same time frame in 2013. Analysis for the cities of Bentonville, Conway, Fayetteville, Fort Smith, Hot Springs, Jonesboro, Little Rock, North Little Rock, Pine Bluff, Rogers, Springdale and Texarkana is provided. To view the complete data for each of the 12 cities, visit www.talkbusiness.net/insidethenumbers. Heading into the final stretch of a political

season that has focused on job creation and economic development, a careful look at the data shows where economic engines are firing and where more attention may be needed to jump start the local economy. LABOR FORCE AND UNEMPLOYMENT A renewed focus on workforce development at the state level may not have come at a better time for workers. The labor force participation rate in the first seven months of 2014 contracted in a year-on-year comparison in all cities except Bentonville and Jonesboro. This mirrors a contraction in

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

labor force levels at the state level, while the U.S. is posting gains in the number of workers who are currently employed or seeking employment in the marketplace. As we have reported in the last several issues of Inside the Numbers, Northwest Arkansas continues to fare the best in the unemployment landscape with Springdale (4.77%), Bentonville (4.82%), Rogers (5.33%) and Fayetteville (5.39%) recording seven-month unemployment rates that easily outpace the U.S. rate of 6.5 %. The unemployment rates in Hot Springs (7.67%), Texarkana (8.08%) and Pine

Bluff (11.16%) were higher than the state unemployment rate of 6.9 %, making them the only three cities in the analysis to show a rate that fared worse than the state as a whole. On a positive note, the unemployment rate improved year-on-year in all cities except Texarkana, with a minor .09% increase in the rate between 2013 and 2014. HOUSING SECTOR Home sales have shown positive gains compared to the first half of 2013, as have the values of the homes sold. Units sold were up in all cities except Pine Bluff, which showed a 4.9% decrease. Fort Smith, Hot Springs and Texarkana showed a double-digit increase in home sales, increasing by 14.2%, 14.3% and 31.9% respectively. The value of homes sold was down in Conway (-7.9%) and Pine Bluff (-7.2%), with Hot Springs being the only city to show a double-digit increase in the value of the homes sold, with the values up by 17.7%. Home sales are reported by county. Springdale and Jonesboro were the only cities that showed a gain in the number of permits issued for new single family

Unemployment Rates:

4.77 % % 4.82 5.33 % % 5.39 7.67 % % 8.08 11.16 %

residential construction. The change in value of the permits issued for the residential construction ranged from -48.8 % in North Little Rock to 17.4 % in Little Rock. Residential permit data for Pine Bluff was not available by the publication deadline. COMMERCIAL SECTOR When comparing 2014 to 2013, the number of new commercial permits was up in five of the 12 cities, with the change in permits issued ranging from -40.0% in Fayetteville to a 177.8% increase in Bentonville. The number of commercial permits issued in the first part of 2014 were fewer in Fayetteville (-40.0%), Fort Smith (-6.7%), Conway (-5.3%) and North Little Rock (-4.3%) than the number that had been issued in the first seven months of 2013. The data on permits can fluctuate widely from one reporting period to the next, and can be skewed when a previous reporting period has significant commercial development and permitting that isnâ&#x20AC;&#x2122;t present in the next reporting cycle. The value of commercial permits increased over 100% in Hot Springs

ROGERS

FAYETTEVILLE

Home Sales: FORT SMITH

HOT SPRINGS

TEXARKANA

PINE BLUFF

STATE

6.9

SALES TAX REVENUE Most of the cities showed gains in 2014 sales tax collections over the same time frame in 2013, although four communities posted a decrease in collections, including Bentonville (-8.1%), Texarkana (-2.9%), Conway (-1.3%) and Hot Springs (-0.3%). Springdale showed the largest increase at 9.1%, while Rogers, Jonesboro, Fort Smith, Fayetteville, Pine Bluff, North Little Rock and Little Rock had increases of 5% or less. Amy Whitehead is the director of the Center for Community & Economic Development at the University of Central Arkansas.

2013 vs. 2014 HALF-YEAR COMPARISONS

SPRINGDALE

BENTONVILLE

(173.4%), Little Rock (178.6%), Springdale (260.8%) and Bentonville (685.7%). When comparing the permit data against commercial permit gains for the last part of 2013, permitting does not seem to be accelerating at quite the same pace as it was. This does not necessarily mean that the economy is slowing down, but may indicate some plateauing as the economy continues to recover from the Great Recession. Commercial permit data for Pine Bluff was not available by the publication deadline.

HOT SPRINGS

TEXARKANA

PINE BLUFF

14.2 14.3 31.9 -4.9

% % % %

Sales Tax Revenue:

-8.1%% -2.9% -1.3% -0.3% 9.1

%or less

BENTONVILLE TEXARKANA CONWAY HOT SPRINGS SPRINGDALE

ROGERS, JONESBORO, FORT SMITH, FAYETTEVILLE, PINE BLUFF, NORTH LITTLE ROCK AND LITTLE ROCK www.talkbusiness.net

ILLUSTRATION: SHAFALI ANAND PHOTOS COURTESY OF LITTLE ROCK CONVENTION & VISITORS BUREAU

Cover Story

the Downtown

Decade

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

Clinton Presidential Center marks a decade in which it has seen more than 3 million visitors and played a major role in creating a vibrant downtown district in Little Rock. By John Brummett

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Cover Story: Clinton Editor’s note: The author of this article, John Brummett, is a columnist for the Arkansas Democrat-Gazette.

t was the afternoon of Sunday, Sept. 28, 1997. Then-President Bill Clinton had announced in February of that year that his presidential library would be placed in Central Arkansas. The Greater Little Rock area had prevailed over Fayetteville, Georgetown and Yale. But the specific site within Central Arkansas remained a matter of competition. Little Rock City Director Dean Kumpuris got word that President and First Lady Clinton, in town and staying at the late Dorothy Rodham’s Hillcrest condominium, were ready to see the proposed downtown

– joined the black-vehicle motorcade that ventured eastward under Interstate 30 and into . . . well, a no-man’s land, pretty much. The idea had been for the motorcade to drive up a ramp and onto the concrete roof of an abandoned book depository just east of Interstate 30. That would provide the optimum southeastward overview of the site. The Secret Service vetoed that. It hadn’t had time to assess the structure for vehicular safety. So the presidential party – Clinton, Hillary, Kumpuris, Moore and local Clinton library coordinator Skip Rutherford – got out of the limousine and walked up the ramp. Then the group encountered a gate that no one knew how to open. “This is crazy,” Kumpuris remembers a

place. Kumpuris and Moore were pointing to sections and extolling ideas for development, envisioning aloud the certain loveliness that awaited. “I felt kind of like a used car salesman,” Kumpuris recalls. The Clintons were nodding, revealing themselves to be somewhere understandably between euphoric and horrified. Rutherford says it was the strangest thing. There he stood on the roof of a book depository with an American president and an uneasy Secret Service detail. A couple of weeks later Clinton was back in town for a final personal look at the then-two finalists – “Murky Bottoms” and the site in North Little Rock now graced by

Secret Service agent saying as Bill and Hillary and others edged their way around the gate, venturing perilously close to the edge of the building. What was below them if they fell? “Air,” Kumpuris recalls. Everyone negotiated the situation safely. Bill and Hillary stood and looked southward, eastward, then behind them to the Arkansas River. They saw warehouses, most abandoned. They saw vines growing onto an abandoned Rock Island Bridge. They saw cans, bottles, assorted debris and a wild wetland – all worthy of the Murky Bottoms name that the late columnist Richard Allin had given this

Dickey-Stephens Park. He seemed to be leaning to Little Rock. Actually, it appeared the fix was in. He had Kumpuris in the car with him. He had no one from North Little Rock as a passenger. But then-Mayor Patrick Henry Hays of North Little Rock was not to be deterred. Hays got a tip on the imminent visit. He and a small party met the motorcade in the street. “How did he know we were coming?” Clinton asked of Kumpuris, who said Pat Hays was a resourceful sonofagun. Here access and imagination were

Presidential library site pre-construction

Little Rock site east of Interstate 30. It was one of four local possibilities. The others were a site near the Bowen Law School and McArthur Park, the current site off Cantrell Road of the Episcopal Collegiate School and the current riverfront site in North Little Rock of Dickey-Stephens Park. This visit was unplanned, an all-of-asudden thing. City officials were unprepared. Bill Clinton can sometimes display a certain spontaneity. So Kumpuris and then-mayor’s assistant Bruce Moore – the point-persons for advocating a Little Rock site and clearly prejudiced in favor of the fledging River Market and this downtown site east of I-30

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

easier. The space was open, level and readily available. Several businessman in North Little Rock had pledged $40,000 apiece to buy the land and deed it for the library free and clear. Across the glassy river rose the best view of downtown Little Rock’s skyline. North Little Rock essentially competed with Little Rock by framing a nice picture of Little Rock. Little Rock’s advantages were not readily evident. Its site contained many parcels, some in active use. That would require condemnation and public money. But the advantages were real and strong. The National Archives preferred the larger space of Little Rock’s untamed site, needing room for a museum, the actual archives storage and essential parking and landscaping. Several eminent architects had been whisked in and all preferred what they could envision on “Murky Bottoms.” Little Rock’s advocacy was intense. Not too long before, Kumpuris had been in a meeting that included Jerry Maulden, the former Entergy head who led a commission that helped persuade Clinton to choose Central Arkansas generally. Maulden, a North Little Rock native, was pushing for the north-shore site. Kumpuris leaned forward and told him to forget it – that North Little Rock already had been ceded the new multi-purpose arena; that this was Little Rock’s turn. The Clinton motorcade had driven past Little Rock’s then-fledgling River Market en route from “Murky Bottoms” to North Little Rock. Bruce Moore remembers Hillary looking at the River Market pavilion and saying she could see Bill working a rope line there every Saturday morning. Then, in a few days, Clinton notified Rutherford that he indeed was choosing the Little Rock site. Rutherford immediately drove to the winning urban wilderness and looked around. There was the muck, the trash, the overgrowth. “I didn’t know where to start,” he says. There were plenty of obstacles. At least one of the warehouses to be removed, the Mays Supply building, framed an old Rock Island freight depot that railroad buffs believed to be historic and

We salute President & Hillary Clinton for helping shape our new skyline

Building a great city, one development at a time. 200 River Market Avenue, Suite 501 | Little Rock, AR 72201 | 501-376-6555 | www.mosestucker.com

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Cover Story: Clinton worthy of that designation and protection. So the city moved quickly on the Wednesday before Thanksgiving of ’97 to demolish it. That same day, the railroad buffs sought an injunction in federal court against demolition. Federal Judge G. Thomas Eisele dismissed the petition as moot when a city official testified that, actually, the building had been brought to the ground that morning. It was a ruthless act by the city, but perhaps essential. The warehouse/depot sat precisely where the library itself was to rise. Local political and taxpayer opposition could well have derailed the city’s obligation to sell park revenue bonds to acquire the land for donation for the library. A petition drive to refer the issue to the ballot – where it might have lost amid the Lewinsky scandal that broke in 1998 – came up short of signatures. The owner of the Mays Supply warehouse, businessman Eugene Pfeifer, had been among the businessmen pledging $40,000 for the North Little Rock site. He resisted

Little Rock’s use of eminent domain to condemn his property and other parcels to buy the library site. He opposed the city’s tactic of calling the library site a park and using public revenue in the form of park proceeds from the zoo and municipal golf courses. But he lost in court. Then when Clinton left office in January 2001, he invited a New York federal grand jury probe into his granting a pardon to international fugitive Marc Rich, whose wife had made a large donation to the library. The investigation had a year-long chilling effect on large donations, which fell under subpoena for a while. But all obstacles were overcome, or at least survived. The date of the announcement of Clinton’s selection of the site – and of Rutherford’s feeling overwhelmed – was Nov. 7, 1997. The $165 million presidential center was dedicated in heavy rainfall on November 18, 2004. And here it is November 2014, the 10th anniversary of what may well have replaced

Central High for all of history as Little Rock’s signature place and defining symbol. There will be a celebration. And there should be contemplation: What has the library meant to Little Rock? What lies ahead? AN UNCERTAIN VISION At the time of Clinton’s site selection, the nearby River Market was but a modest beginning – the new Main Library, opened that year in the renovated Fones building, and the River Market/farmers’ market pavilion itself, built with surplus bond money and private donations and anchored by Andina’s coffee shop. The rest was an uncertain vision, mostly of Kumpuris and Jimmy Moses, real estate developer. Moses had returned to Little Rock in the early 1970s, after four years of college and a degree in urban planning, to find that downtown Little Rock had pretty much died – from urban renewal and white flight, facilitated by the coming convenience of a

Join us as we celebrate Little Rock’s Decade of Progress with ten days of events. Clinton Center Events

• Celebrate 10: A Community Concert • The Work Continues: Day of Action (benefitting Arkansas Foodbank) • Free admission days

Throwback Thursday: Party in the Pavilions AND MUCH MORE AT:

See the full event schedule at LittleRockDecadeOfProgress.com 14

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

ARKANSAS ARTS CENTER ARKANSAS GOVERNOR’S MANSION ARKANSAS REPERTORY THEATRE ARKANSAS SYMPHONY ORCHESTRA BALLET ARKANSAS BUTLER CENTER FOR ARKANSAS STUDIES CLINTON PRESIDENTIAL CENTER CLINTON SCHOOL OF PUBLIC SERVICE ESSE PURSE MUSEUM HEIFER INTERNATIONAL/HEIFER VILLAGE HISTORIC ARKANSAS MUSEUM MACARTHUR MUSEUM OF ARKANSAS MILITARY HISTORY MOSAIC TEMPLARS CULTURAL CENTER MUSEUM OF DISCOVERY OLD STATE HOUSE MUSEUM P. ALLEN SMITH’S MOSS MOUNTAIN FARM RON ROBINSON THEATER WITT STEPHENS JR. CENTRAL ARKANSAS NATURE CENTER

turned out for the best. Did Clinton himself actively intend to fuel the River Market boom? In a statement issued to Talk Business & Politics from his foundation, Clinton indicated he intended more than that. “We built the center to serve as a bridge between the past and present, the individual and the community,” he said. “Everything from site selection, the design of the building itself, and the educational programs we offer reflects this vision. One of the most important things we wanted to do was create local bridges that would bring people together and encourage creative cooperation.” “I think he wanted an urban experience,” Kumpuris says. “At the time he thought he might spend a week a month here, which hasn’t happened. And I think he liked the idea of strolling down to Andina’s for a cup of coffee.” How much of the development, which has spread to the Argenta section of North Little Rock and Little Rock’s newly percolating

Main Street, is owed to Clinton’s choice? “You can’t quantify it,” Kumpuris says. “It’s like the Old Testament – one thing begets another.” But some causes-and-effects are pretty clear. Acxiom Corp. chose the River Market for its new headquarters, opening in 2003, almost solely because the Clinton Library had made the River Market an appealing place. There were rumblings in the mid-1990s that the Heifer Project might leave Little Rock, perhaps to put its headquarters in Chicago. Those rumblings pretty much ended when Heifer got the chance to develop a state-of-the-art and energyefficient new facility in the shadow of the new presidential library. “What the Clinton Library did was validate what we were trying to do,” Moses says. Jordan Johnson, spokesman for the Clinton Foundation in Little Rock, offers this observation: Little Rock now has a

CHIHULY May 17, 2014 January 5, 2015

Dale Chihuly, Mille Fiori (detail), 2008

new east-west commuter freeway, I-630. In 1992 Moses, desperate to revive downtown, helped lead an effort for voter approval for a multi-purpose arena called the Diamond Center at the old Coachman’s Inn site, where a post office is now located. Voters overwhelmingly rejected the proposal, so distressing Moses that he says now he would have left Little Rock, maybe for Portland, one of his favorite cities, except he had so much debt he couldn’t. Today the River Market bustles for blocks with nearly 2 billion dollars of private and public investment. The early idea of a retail shopping district hasn’t come to pass, because things seldom go exactly as planned. Instead, Clinton Avenue is a place of bars, restaurants and museums – and high-rise condominiums, lofts and upscale hotels, nearly all of them developed by Moses and his new partner, Rett Tucker, brought on in that fateful year, 1997. Gene Pfeifer now says the library has been a wonderful boon for all of downtown, even on the north shore, and that everything has

1200 President Clinton Avenue • Little Rock, Arkansas 72201 501.374.4242 • clintonpresidentialcenter.org Forty Two Full Service Restaurant 1200 President Clinton Ave. 11 a.m. – 2 p.m. • Mon. – Fri.

Clinton Museum Store Official Store of the Clinton Center 610 President Clinton Ave. 10 a.m – 5:30 p.m. • Mon. – Sat. 2 p.m. – 5:30 p.m. • Sun.

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Cover Story: Clinton cultural and entertainment strip extending from the Clinton Library on the east to the Robinson Center, now undergoing remodeling. And the prominent New York City architect who designed the Clinton Library – James Polshek – is now designing the river-panoramic meeting facilities to rise on the northern side of the new Robinson Center. No other city will be able to boast of a cultural and entertainment strip with Polshek designs as bookends, Johnson says. The cultural, educational and policy enrichments have perhaps exceeded the strictly economic, mostly from three library adjuncts. One: The Clinton School of Public Service is based in the renovated Choctaw Railroad passenger depot on the library grounds. Through affiliation with the University of Arkansas System, it offers graduate-level and service-required studies to specially selected national and international students. The enrollees also do studies at the nearby River Market’s Arkansas Studies Institute and Main Library. Rutherford, dean of the

school, says the school considers the entire River Market its campus. For the broader community, the Clinton School has brought hundreds of distinguished speakers – scholarly, popular and topical – to Little Rock. It has done so without paying lecture fees, only expenses for travel, lodging and dinner with students. Rutherford became inspired to reach for a world-class speaker series when he visited Harvard. The Clinton School now averages nearly three lectures per week during non-holiday school terms. In the finest tradition of higher academia and cultural enrichment, Rutherford has irked his friends on the left by bringing in Karl Rove and irked his friends in the rightward mainstream by bringing in Richard Dawson, probably the world’s leading atheist and evolutionist/biologist. Both lectures had to be moved to the Statehouse Convention Center to accommodate the crowd. Bob Dole gave the first Clinton School lecture in September 2004. He was doing a favor for his friend David Pryor, the first

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TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

dean of the Clinton School. Two: That old vine-covered Rock Island Bridge is now lined with hanging baskets of yellow lantana and open to bikers, joggers and walkers. It provides the eastern end of a recreational loop and river trail extending a dozen miles west to the Big Dam Bridge and Two Rivers Bridge. Walk the bridge and you’re apt to confront a couple from, say, Michigan, on a cross-country trip, wondering about all the names etched into the bridge’s concrete walking path. They are the names of donors. The pedestrian bridge drops south-bound users into the Clinton Presidential Park, an area of modern landscaping that the Clinton Foundation, hoping to make more accessible to the public, has opened the last four years for the Riverfest celebration in late May. Rainfall during the first Riverfront activities caused damage to the grass. “It grew back,” Jordan Johnson says. Between the park and river lies the Bill Clark Wetlands, bridged by a walkway over natural fauna and flora. Three: The Clinton Foundation has launched charitable and public policy initiatives that have brought millions of dollars to the state. They include a climate initiative making loans for energy improvements; a health initiative offering, among other projects, aid to disabled disadvantaged Arkansas youth to improve their educational and career opportunities and lift them from Medicaid or Social Security disability; and the City Year Little Rock program for youth voluntarism that has provided nearly 700,000 hours of service in the community by nearly 300 City Year members. Meanwhile, early critiques that Little Rock was relying too heavily on the library as a tourism destination – that presidential libraries don’t typically serve that purpose – seem to have been belied. Owing to Clinton’s uncommon postpresidential visibility and popularity, and probably to the facility’s visibility to cross-country traffic, more than 3 million people have visited the library in a decade. Only the Clinton library and the LBJ one in Austin have sustained their visitation numbers year to year. Generally, attendance

at presidential libraries starts high and declines. Beyond that, the presidential center has become a major local gathering place, hosting over the decade 3,779 events and special exhibits drawing 1.5 million attendees. No other presidential library matches those public event numbers. Compilations from the state Parks and Tourism Department show that, in 2003, Pulaski County had $1.073 billion in travelrelated expenditures, and had $1.6 billion a decade later.

Moses also says the River Market’s leading advocates – himself, Kumpuris, Tucker, library head Bobby Roberts – are getting on in years and that a new generation of champions needs to emerge. But Moses says it occurred to him on a recent Sunday bike trip over the bridge and into the presidential park that “one thing is here forever.” And that is the presidential center. “That’s the real gift,” he says. Kumpuris says the long-term prominence may well come from the Clinton School. He predicts that someday one of those students will parlay a service project into a Nobel Prize. Moses uses the word “renaissance” for what has happened in downtown Little Rock. Kumpuris says he agrees, but says

A NEW GENERATION OF CHAMPIONS Now to the future: Moses says much depends on the continued development of Main Street with the new Technology Park and in the South Main district. He also says the city nears an end of the era by which the River Market can be jump-started or artificially stimulated or shoved along by public policy and public investment. It needs now to stand on its own, most importantly, he believes, by landing a private employer or two to bring working folks into the district every day. Moses also longs for the Clinton takes in the view University of Arkansas to occupy a building downtown and bring in many cities have experienced a downtown students for classes. And he has this dream renaissance of sorts in recent years. He – and, remember, he’s had impractical says Little Rock’s has simply been different dreams before that came to some measure because of the Clinton Library. of fruition – that a major retail department Moses says Little Rock is not yet a “great store will come downtown. city,” like Nashville or Austin, but “kind of a Kumpuris says the market district needs growing-up city, maybe a lanky adolescent.” lower-cost apartment living. And he stresses What he and others mean by a “great city” that those jobs advocated by Moses need to is one with a strong and diverse economy, be private sector jobs, not state government a vibrant young creative class, high-tech ones. That’s because, he says, state governentrepreneurship, a culturally rich quality ment allows only a half-hour for lunch. The of life and an absence of stifling racial city made a mistake by allowing state offices problems and a serious crime rate. on Main Street in buildings connected by So Little Rock is not there. skywalks, he says. State employees come Owing to a crime rate that ranks high to a cocoon, stay in it for eight hours and nationally and a largely resegregated public go home. A downtown needs shoes on the school system that sometimes seems to take pavement, Kumpuris says. one step up and two steps back, Little Rock

still hovers somewhat precariously, as-yet undefined, between a burgeoning great city and a stymied, troubled city. It pushes ambitiously toward Nashville and Austin. At the same time, it tries hard not to be, say, Memphis, a town beset by crime and racial problems though it, too, has revived sections of its downtown. And it actually boasts the home not of Clinton, but the real and original Elvis. So there’s more to a great city than a vibrant downtown district and a famous favorite son and an iconic destination. As for a new generation, it seems likely that not even Bill Clinton can live forever. His only child, Chelsea, spent formative years in Little Rock, attended its public schools and seems still to have a fondness for the place. In fact, she strolled unnoticed through Riverfest in May, mainly to observe the use of the presidential park for activities. Rutherford says Chelsea recently retweeted with a compliment his tweet announcing the October speakers at the Clinton School. Now we behold the generation after Chelsea – an infant Clinton granddaughter by the name of Charlotte Clinton Mezvinsky. Someday she presumably will head the Clinton Foundation. Perhaps her mother will bring her to Riverfest in a few years – to see the city her granddaddy is trying to help build on his old stomping ground. Then there’s the matter of the infant’s grandmother, perhaps yet to become president herself. Someday she might either consolidate her eventual foundation and library with her husband’s or build her own elsewhere. But we’re getting a tad ahead of ourselves. For the final word, here is Clinton himself in the written statement issued by his foundation: “I am deeply proud that the center has been an active part of the Little Rock community for the past decade, and I know our best years are yet to come.” www.talkbusiness.net

Cover Story: Clinton MORE THAN

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THE CLINTON SCHOOL SPEAKER SERIES HAS HOSTED NEARLY

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IN LITTLE ROCK AND NORTH LITTLE ROCK

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TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

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FOR IMMEDIATE RELEASE October 9, 2014 It’s been nearly ten years since the opening of the William J. Clinton Presidential Library on November 18, 2004; a true landmark that has drawn millions of visitors to Little Rock, and has spurred unprecedented cultural, economic and social progress. November 18 will mark the library’s 10th Anniversary. The Little Rock Convention & Visitors Bureau, along with the Clinton Foundation and many others, will be coordinating a 10-day celebration leading up to this important anniversary. The opening of the Clinton Center (Clinton Presidential Library, University of Arkansas Clinton School of Public Service and the Clinton Presidential Park) has forever changed the landscape of Little Rock, and was undoubtedly the catalyst that has propelled more than $2.5 billion in economic development to the Central Arkansas area. The Clinton Foundation’s initial goals for the Presidential Center focused on four themes: economic development and revitalization of downtown Little Rock; developing an institution of higher education promoting public service; a tourism magnet for Arkansas and the mid-south; and archival repositories where the past, present and future intersect. Ten years later, Little Rock and all of Central Arkansas have benefitted from the advancement of those goals. Top 10 “Decade of Progress” elements for Central Arkansas (Pulaski County): • Over $2.5 billion in economic development • Annual visitation increased by more than 25% • Offers the nation’s first Master of Public Service (MPS) degree and hosts one of the country’s outstanding college speakers series • Little Rock named #1 by Kiplinger’s Personal Finance in annual “10 Greatest Places to Live 2013”; Editor’s Choice, Outside magazine; “Best Towns of 2013” and one of “Five Secret Foodie Cities” by Forbes Travel Guide in 2014. • Almost 2,000 new hotel rooms and RV spots and 64.5% increase in Little Rock’s tourism tax revenue • Arkansas is a leader in sustainable design, ranking in the top 20 among U.S. Green Building Council chapters, and boasts 170 certified LEED buildings • Home of the longest pedestrian and bicycle bridge in North America, built solely for that purpose • A presidential archive with over 100 million items • Home to the most LED-illuminated bridges, spanning a major body of water, in the country • Little Rock’s revitalization master plan for its historic Main Street, known as the “Creative Corridor,” has received several national awards and various phases of the plan have been completed, or are in process The past decade is a true tribute to the progressive attitudes and vision of our destination leadership and partners. It’s time to celebrate the growth, revitalization, and advancements these opportunities have provided, and envision where we should go in the future. We invite you to come and experience, first-hand, the total transformation of Little Rock. Sincerely, Gretchen Hall President & CEO Little Rock Convention & Visitors Bureau 20

James L. “Skip” Rutherford III Dean, University of Arkansas Clinton School of Public Service Founding President, Clinton Foundation Coordinator, Clinton Presidential Library project (1997-2004)

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

Industry

Extensive I-30 Project Brings Big Possibilities, Huge Challenges By John Brummett Editor’s note: The author of this article, John Brummett, is a columnist for the Arkansas Democrat-Gazette. It looms, part opportunity and part worry. It is the next big thing for downtown Little Rock. Talk Business & Politics was inquiring about the generally positive state of affairs in the revitalization of the River Market area of Little Rock – a “renaissance,” some call it. The context was the 10th anniversary in November of the opening of the Clinton Presidential Center on the east end of the River Market. One subject kept coming up, mostly as a warning. It’s that the reborn area of downtown Little Rock will soon confront disruption and risk. Be advised that, before long, the state Highway Department intends to tear up the traffic system for the area and build another. “We don’t have any choice but to get this right,” says outgoing Pulaski County Judge Buddy Villines. He’s a key visionary largely credited with the savvy placement of Verizon Arena on the north side of the Arkansas River and the erection of the Big Dam Bridge out west. “I don’t want to see the River Market turned into a ghost town for four years,” says Little Rock City Director Dean Kumpuris. He’s one of the key persuaders of President Clinton to locate his library in those oncemurky bottoms east of Interstate 30.

So you’re asking: What in the world are those community leaders fretting about? Let’s answer this way, with a question: So do you think the imminent project to replace the Broadway Bridge is a big deal? It’s not, comparatively speaking. It’s child’s play. It’s a matter of a mere 24,000 cars a day. It means between six months and two years of traffic disruption, producing in the end the same downtown traffic configuration that existed before. Now consider and contrast this hovering ordeal: • Four years of traffic disruption, affecting 120,000 cars a day, beginning in 2018, at an estimated cost perhaps to exceed $400 million, more than twice the cost of the Big Rock fly-over project for Interstates 430 and 630. • Widening Interstate 30 from its north interchange with Interstate 40 and U.S. 67-167 to its south interchange with Interstate 440. • Refortifying and expanding from three to four lanes each direction, or conceivably replacing altogether, the Interstate 30 Arkansas River Bridge linking the downtowns of Little Rock and North Little Rock. • Broadening the roadways extending immediately from the newly widened bridge, presumably requiring the taking of right-of-way either from the River Market or the park at the

Clinton Library, or both. • Redoing the entire interchange system in the downtown area of Little Rock because the current exits and entrances at Second, Sixth and Ninth Streets are impractical, ill-placed, unevenly used and too close to each other for today’s standards. That’s all. Who decided we would do all of that? You did. You voted two years ago for a decade’s sales tax increase for bonded debt for highway jobs that included the vast one just described. Scott Bennett, director of the Highway Department, provides two assurances. One is that the department will take as little new right-of-way as possible. The second is that the existing I-30 bridge will be kept open to traffic – at times on one bottle-necked lane each way, probably – because there is no way 120,000 cars a day could be conveyed across the Arkansas River otherwise. Beyond that, speculation is imaginative. Complications are menacing. Dread is building. Committees are forming. Ideas are rampant. Kumpuris almost wishes, and maybe fully wishes, that the whole project would be abandoned and the status quo preserved. He seems to fear a four-year interruption of momentum more than he anticipates any eventual long-term improvement. Doing nothing seems to be the least www.talkbusiness.net

Industry: I-30 Challenges likely option. The 50-year-old interstate bridge needs fortification, at least. The rush-hour traffic count seems to compel widening. The existing downtown exit and entrances invite gridlock. The voters spoke. The Highway Department likes to spend voter-approved bond proceeds as it said it would. And the department wants the job done within a decade of the tax program’s approval, meaning by 2022, which means getting started in 2018. One idea is to merge the Second, Sixth and Ninth Street exits into one large “distributor exit” from which traffic would be directed one way to the Clinton Library and another to the River Market and another to the state Capitol and another to Main Street. The logical place for that might be Third Street. That probably would require digging up the trolley spur on Third that goes to the Clinton Library and dead-ends at the Heifer Center. The loss would not be widely mourned. Some call that spur “the streetcar no one desires.”

But that’s a lot of distribution of traffic on very limited real estate. So there is an idea for another new interchange to the south. But that might imperil the Hanger Hill neighborhood, which is historic and reviving. So another idea is to move the entry ramps into downtown Little Rock to the south off Interstate 630. But it’s hard to figure where big new ramps would go without slicing McArthur Park or the Mount Holly Cemetery. And City Manager Bruce Moore says experience elsewhere plainly shows that downtowns decay when freeway exit traffic is moved away from them. Bennett says another idea is that some south-bound access to downtown Little Rock, to LaHarpe Boulevard, maybe, could be directed from freeway exits actually in North Little Rock. Jordan Johnson, the spokesman for the Clinton Foundation in Little Rock, reads all of this from a silver lining playbook. He says removing the Second Street exit would clear out a mountain of existing

concrete between the River Market and Clinton Center. That, he contends, would provide space for widening the main interstate between the library and market without new right-of-way acquisition. And, he says, it would better join the market with the library, at least visually – to the extent that “you could see through.” But even he, like all others with a direct stake, acknowledges that the construction period alone will unavoidably put a strain on these emerging destinations so vital to downtown Little Rock. Presumably there will be times when the quickest way from Interstate 30 to the River Market will be via the exits at Sixth or Ninth Streets. So it seems fairly certain that the downtown Little Rock area will begin in 2018 a transition to a new look, a new dynamic, indeed a new era. It’s one that will be recorded as “Renaissance Interrupted,” at least, but surely not “Renaissance Lost.” As the home remodeler once said to the weary homeowner: We’ve got to make a mess to make it better.

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TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

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The leadership of Few (left to right): David Hudson, Arlton Lowry and Gabe Couch

Knowing a Thing â&#x20AC;Ś or Few

Agency strives to provide cutting-edge mobile applications and startup mentoring. By Casey L. Penn

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

t the corner of Sixth and Center Streets in downtown Little Rock resides Few, a young Web development and mobile application company that, after just one year as an “all-in” agency, is already standing out for its cutting-edge capabilities and somewhat avant-garde approach. Co-founders Arlton Lowry and David Hudson, along with agency partner and UX/UI Designer Gabe Couch, have more than a few things in common. Aside from their affinity for strategically unkempt beards, the Few men share a love for clean design, a strong sense of community and high regard for things unconventional. The guys share a penchant for hard work, too, provided they enjoy it. “We live and breathe our projects. We love what we do, and that is a big part of our sales pitch,” said Hudson of the company’s service list that includes Web and mobile applications, startup fostering and Few’s annual Web conference known as Made by Few. Lowry, Hudson and Couch encourage this same level of enjoyment from their team of six employees, and a handful of designers and developers who help them on a contract basis. “If we don’t love it, we don’t do it,” Couch adds. Few does client work (The Integer Group, Heifer International, Slingshot) and works on internal projects. They have created apps for clients that include Eyenalzye, a company offering real-time profit analysis to busy restaurant owners. Internal Few projects have included Grades.io, a Web application that allows educators worldwide to track and manage classes and student information (grades, attendance, assignments) through a userfriendly interface. Another internal concept, WriteGov.com, began as a labor of love by Hudson. It aims at making “armchair activists” into “actual activists” in a matter of minutes. When it comes to a political party, Hudson aligns himself with Thomas Jefferson. “I’m in a sect of one,” he explains. “Who speaks for me? How do my representatives hear my individual voice? WriteGov is an answer to that.” WriteGov makes it easy for citizens – without regard to political party or economic status – to get their individual voices heard on just about any issue.

THE PATH TO FEW Lowry and Hudson were friends long before they were colleagues. They met Couch through freelance projects over the years. Couch and Lowry were each involved with the annual BarCamp Conway community conference, though they did not meet at the time. The event focused on education, technology and development. Lowry also helped found the now defunct Conway Cowork in 2010. He credits his involvement in such events for spurring his passion for community. More recently, the three have collaborated to plan, coordinate and host their own conference celebrating design known as Made by Few. A precursor to Few, which officially formed as an LLC in 2013, Made

“All of us were adamant that we do the very best work possible. We pushed each other, and we shared the same goals to create the best design, the best development.” – Arlton Lowry Few by Few remains a huge identifier for the agency. Launched in January 2012 by Lowry and Couch, the first Made by Few conference was small but mighty. Since that first year, when it was planned around a single venue and roughly 100 attendees, the event has grown to include multiple venues, more speakers and attendance in the hundreds. The 2014 event (held in August) featured 11 leading-edge designers, illustrators, developers and entrepreneurs. Among them were New York City-based illustrator Tuesday Bassen (the New York Times, Snapple, American Greetings) and Google Ventures UX Designer Marc Hemeon and others.

The mission has remained consistent, they say. In their words, Made by Few is a “kickass” conference focused on making the Web a more beautiful place while fostering camaraderie among designers, developers, entrepreneurs and others in the community. FORMATION OF FEW Over the years of collaboration, these friends began to notice a trend. “We realized we enjoyed working together,” said Lowry, who like his cohorts had plenty of experience working alone. “All of us were adamant that we do the very best work possible. We pushed each other, and we shared the same goals to create the best design, the best development.” It was Hudson and Lowry who first decided to form a company together. Shortly thereafter, they pulled in Couch. Each partner brought to the table a unique skill set. Hudson, 30, knew from a young age his path in life. “I’m the luckiest guy in the world,” he says. “From age 12, I knew I wanted to write code. I spent every waking hour learning it.” At 24, Hudson launched his first full-time Web development position. Since then, he has worked on projects large and small. He was head developer for a Texas tourism website and also helped work on a huge health insurance website. “It was very much like healthcare.gov, except that it worked,” he says. “I’ve led small teams, large teams, and now here I am at Few, living the dream.” Living the dream isn’t always easy and many times requires sacrifice. “We left awesome full-time jobs,” says Hudson, who was a new father to a one-month-old baby when he decided to partner with his colleagues. “I normally don’t take big risks, but this is one of those once-in-a-decade situations where I could ‘go for it.’ I could have stayed with my current job for years and then try something like this again, but I decided to take the leap and quit my job full time. It’s been one hell of a ride ever since.” Lowry left a secure job, too. “That was the key,” he says. “[What we left] were just jobs and not our dreams. We wanted to build our own.” Couch held several positions, many remotely, before finding a permanent home with his friends at Few. The Dardanelle www.talkbusiness.net

Profile: Few

“We want people that love what they do to work with us not for us.” – David Hudson Few native majored in fine arts with an emphasis in design before holding design positions at Arkansas Blue Cross Blue Shield, Acumen Brands, Saatchi X and other places. “I moved around,” Couch says. “I was looking for that challenging environment.” Lowry, 33, grew up outside Jonesboro, near Black Oak. “It was rural. My grandfather was a cotton picker,” he recalls. After attending Arkansas State University for a short time, Lowry finished earning his degrees (mass communications major; IT minor) from the University of Arkansas at Little Rock, where he now teaches a senior-level Web development course.

Since college, Lowry’s IT minor has served him well; he has worked for several companies over the years (AETN Marketing Outreach, Conway Cowork among them) and has also worked remotely for Less Everything (Florida), Walmart, Mozilla and others before joining Artletic full-time for two years. “My [biggest] goal was to work with my friends,” Lowry says of finding the ideal work environment. When the opportunity presented itself, he was ready. FROM FEW TO MANY Few leaders are hoping to find more amazing designers and developers who

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

would like to join their team and share their passion for the Little Rock community. “We’re very careful about who we hire,” states Hudson. “We have a certain environment to cultivate. I can honestly say that nobody in the state is doing what we’re doing now. We want people that love what they do to work with us not for us. We want to encourage them in their careers, and in their education. We want them to be themselves and not to placate us or pour themselves into a mold that we create for them.” Hiring the right team isn’t always easy, especially when local designers are often

tempted by opportunities that exist outside the state. “It’s an interesting thing trying to keep people here,” Couch says, elaborating on what he says sometimes feels like a catch-22 situation. “A lot of our most valuable people, we’re bleeding them left and right. We need to retain that talent by creating a culture of communities that want to make and do things together here, not going out of state.” Community is key, they say, to fostering a business environment here in Arkansas that is profitable and competitive over the long term. “From a business standpoint, sure, it helps us immensely to have amazing designers and developers right here in Arkansas. When they leave, we can only hire them remotely. We can’t bring them into our office – and our community. From an altruistic side of things, we genuinely want to see this community thrive.” The business community in Arkansas is still getting used to Few. “The types of things that we do are brand new and cutting edge – the type of stuff going on big in Silicon Valley, in Austin and in New York City, but not really happening much here yet,” Lowry says. “There just isn’t a big understanding yet of what we’re trying to do.” At the same time, something is getting across, as evidenced by the large group of sponsors – some direct competitors – who came together in support of 2014 Made by Few. “Maybe we fooled some of them?” joked Lowry, who felt great pride at seeing so many in the industry come together in support of an event he readily admits may not be for everyone. So just what is it that these Few Arkansasloyal entrepreneurs are trying to do? At its most basic intent, Few is about providing a space for the local community of designers, developers and entrepreneurs to grow, to learn, to utilize as they see fit. As a business, the company is all about providing beautiful Web work, cutting-edge mobile applications and startup mentoring. Lowry says the agency’s future is somewhat mapped out. “We plan to continue to grow startups,” he says, “expand into new markets, expand our conference and community activities, hire the best talent and build the company we would want to work for.”

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Designed by Polk Stanley Wilcox Architects of Little Rock, the El Dorado Conference Center has garnered a number of awards, including the 2013 American Institute of Steel Construction IDEAS2 National Award, the 2012 Brick Industry Association Brick in Architecture Award - Bronze, and the 2011 Associated Builders and Contractors of Arkansas Excellence in Construction Award.

Something Old, Something New

El Dorado Festival & Events sees entertainment venues as the next step in the revitalization of the south Arkansas townâ&#x20AC;&#x2122;s historic districts. By Rex Nelson

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

ichard and Vertis Mason didn’t plan to take on the restoration of an entire downtown after moving back to south Arkansas in 1975. It just sort of happened. Richard Mason, who’s now in his 70s, is a graduate of Norphlet High School who’s steeped in the culture of the south Arkansas oil and gas industry. Timber harvesting and cotton production dominated the region’s economy in the late 1800s and early 1900s. That changed in January 1921 when Dr. Samuel T. Busey, a physician and oil speculator, completed the drilling of the Busey No. 1 well southwest of El Dorado. “The discovery well touched off a wave of speculators into the area, seeking fame and fortune from oil,” Kenneth Bridges writes for the Encyclopedia of Arkansas History & Culture. “The Busey No. 1 well would produce oil for only 45 days, but El Dorado changed from an isolated agricultural city of about 4,000 residents to the oil capital of Arkansas. By 1923, El Dorado boasted 59 oil contracting companies, 13 oil distributors and refiners and 22 oil production companies. “The city was flooded with so many people that no bed space was available for them, leading to whole neighborhoods of tents and hastily constructed shacks being erected throughout the city. El Dorado’s population reached a high of nearly 30,000 in 1925 during the boom before dropping to 16,241 by 1930 and rising to 25,000 by 1960. Oil production, after plummeting by the early 1930s, recovered later in the decade.” During the 1920s boom, a newspaper reporter noted that a person walking along what became known as Hamburger Row could “purchase almost anything from a pair of shoes to an auto, an interest in a drilling tract or have your fortune told.” Mason spent much of his time – when he wasn’t delivering the Arkansas Gazette, the Shreveport Times and the El Dorado Daily News – hunting, fishing and trapping. He would watch as saltwater ran from oil wells into streams, killing fish and vegetation. He said that he thought crusted salt, shining in the sun and crunching beneath his feet during dry periods, was “the natural order” in south Arkansas. Norphlet had boomed along with El Dorado during the 1920s. Workers moved there by the hundreds, and

gamblers and prostitutes followed. A visitor arriving in the area by train in 1937 said, “I wondered what I had come to. It looked like a moonscape.” Richard Mason worked his way through college at the University of Arkansas, earning bachelor’s and master’s degrees in geology. His father, who had worked for more than two decades at an asphalt plant, was killed in an automobile accident when Mason was a college sophomore. His mother later ran a women’s clothing store in El Dorado. Mason and his wife headed to Houston following graduation to search for a job. He was hired by what’s now ExxonMobil as an exploration geologist. Mason worked for the company on the famous King Ranch of south Texas for two years and then worked another two years in Libya before being transferred to Corpus Christi, Texas. It was in Corpus Christi that he decided he didn’t want to spend the remainder of his career working for a large corporation. Mason left the company in 1968 and later teamed up with a Corpus Christi wildcatter named Joe Baria to form Gibraltar Energy Co. Gibraltar drilled 28 wells, making small finds along the way. Mason then met a geologist in Mississippi named Hilton Ladner, who wanted to explore an area known as the Black Warrior Basin near Columbus, Miss. Their first two test wells showed promise. A third well confirmed that they were onto something big. They had discovered a gas field eight miles long and two miles wide. BACK TO SOUTH ARKANSAS Mason and his wife were thinking of moving to Columbus in 1975 when they saw a for-sale sign on a 20-acre tract at the end of Calion Road in El Dorado. It once had been home to what Richard Mason describes as a “barbecue-and-beer joint.” The couple bought the property, built their home and have been in El Dorado ever since. After his business partner retired in 1977, Richard Mason became the sole owner of Gibraltar. On a warm fall evening, Richard and Vertis Mason sit on a wooden deck beside the pond behind their home and recount their years of work to revitalize downtown El Dorado. They were simply looking for

office space when they were bit by the historic preservation bug. They realized that their beloved south Arkansas was in the midst of a long economic decline and decided to do something about it. They’ve purchased and renovated 17 buildings through the years. They’ve also planted more than 1,000 trees in the downtown area while adding park benches, planters and even phone booths from London. “Early on, we would start businesses just to get stores in the buildings we owned,” Vertis Mason says. “Later, retailers started coming from other parts of town.” For much of the 20th century, Union County was at the top of per capita income rankings for the state. A major player in the county was Lion Oil Co., which financed discovery wells in the Shuler Field in 1937. Thomas H. Barton had acquired Lion Oil in 1928 and later became recognized as a leading capitalist and philanthropist. Barton Coliseum in Little Rock was named for him. Barton sold Lion Oil to the Monsanto Corp. in 1956. Meanwhile, Charles H. Murphy, who took over his family’s Murphy Oil Corp. in 1951, ensured that the company stayed in El Dorado. Since then, Murphy Oil has spun off Deltic Timber Corp. and Murphy USA Inc., making El Dorado the home of three publicly held companies. El Dorado also became a chemical and manufacturing center. During World War II, the U.S. Army Corps of Engineers entered into a partnership with Lion Oil and supplied $28 million for the construction of the Ozark Ordinance Plant to produce ammonium nitrate. Lion acquired the plant for a fraction of the construction costs at the end of the war. The plant became part of El Dorado Chemical Co. in 1983. In 1965, Great Lakes Chemical Corp. began processing underground brine at El Dorado into a number of products, including flame retardants. DECLINING POPULATION Along with the rest of south Arkansas, though, El Dorado began losing population in the 1980s. The city had held steady with a population of between 25,000 and 26,000 people in the 1960, ’70 and ’80 censuses. In the 1990 census, the population dropped to 23,146. It fell to 21,530 in 2000 and 18,884 in 2010. The city’s leaders believed that www.talkbusiness.net

Profile: El Dorado one way to stem the population loss was to capitalize on El Dorado’s wealth of historic commercial and residential properties, many of which had been built during the 1920s oil boom. There are three historic districts: • The El Dorado Commercial Historic District is composed of 68 buildings and one monument. Of those buildings, 36 were built during the 1920s. The centerpiece of the district is the Union County Courthouse, which was constructed in 1927-28 of cut limestone block. The nine-story First Financial Bank Building and the seven-story Murphy Building tower over the district. • The Murphy-Hill Historic District is a residential area just north of the business district. Homes were built there from 1880 until 1957. Almost 75% of the homes were constructed during the first half of the 20th century. Of the 121 buildings in the district, 107 were originally residential, three were multifamily residences, one was a church and 10 were commercial structures. • The Mahony Historic District is also a residential area north of the commercial district. The neighborhood contains 163 buildings and is in parts of five additions that were platted from 1908-23. There are 119 structures that were constructed in the 1920s and another 32 were built during the 1940s and 1950s. All but five of the district’s buildings were constructed prior to 1962. NEW ORGANIZATION Building on the work already done by the Masons and other preservationists, the leadership of El Dorado decided to try to transform their city into a cultural center that would attract visitors from across south Arkansas, north Louisiana and east Texas. Destination developer Roger Brooks and his team from the Seattle-based Destination Development International were hired to devise a plan for rebranding and marketing the city. After completion of the plan, El Dorado Fifty for the Future formed an organization known as El Dorado Festivals & Events Inc. An El Dorado native named Austin

Barrow was hired to head the nonprofit entity charged with transforming El Dorado into the Festival City of the South. After graduating from El Dorado High School, Barrow received his bachelor’s degree from Louisiana Tech University and then a master of fine arts in drama from the University of Arkansas. He performed on stage and screen in Chicago and Los Angeles and later taught theater at the college level. Voters already had taken an important step when they provided funding for downtown’s El Dorado Conference Center, which has banquet seating for up to 1,000 people and theater seating for up to 2,500 people. In May 2013, the American Institute of Steel Construction announced that the Austin Barrow

design of the conference center by the Little Rock architectural firm Polk Stanley Wilcox had received the highest recognition possible. The facility also houses South Arkansas Community College’s student services center, tying the downtown commercial district to the college. Brooks first suggested that El Dorado start a Shakespeare festival. But since there already was such a festival at Conway, the downtown blueprint evolved. What emerged was a plan to renovate the Rialto Theater, renovate a huge former automobile dealership behind the Rialto and build an amphitheater. More than $40 million already has been raised for the effort. When he was young, El Dorado attorney

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

and businessman Edwin Alderson worked at radio station KELD-AM. He now owns the station. His interest in radio and music led him to start collecting vinyl LPs and 45s. After years of pursuing his hobby, Alderson had one of the best collections of its kind in the country. ATTRACTING A BIG GUN He chose to donate the collection to the Rock and Roll Hall of Fame and Museum at Cleveland and became friends with the museum’s president and chief executive officer, Terry Stewart. Stewart, a native of Daphne in south Alabama, had taken the helm of the Rock and Roll Hall of Fame in 1999, four years after it opened. The Plain Dealer at Cleveland wrote that he brought “stability to an institution that had gone through a quick succession of four previous directors.” Stewart stayed at the internationally recognized museum until retiring at the end of 2013. He had ensured that the museum remained profitable and was instrumental in working out an agreement with the New York-based Rock and Roll Hall of Fame Foundation to bring the annual induction ceremony (usually held at New York’s Waldorf-Astoria Hotel) to Cleveland every three years. Stewart also oversaw a capital campaign that raised more than $30 million for an extensive museum redesign and the development of a library and archives. About 450,000 people visit the museum each year with an estimated annual economic impact on Cleveland of more than $100 million. In a 2012 interview, Cleveland Mayor Frank Jackson said Stewart “always has been very easy to work with. He understands how to get things done.” Stewart earned more than $578,000 in 2012. In other words, he was among the big guns in the museum and entertainment worlds. Before joining the Rock and Roll Hall of Fame, he had been the president and chief operating officer of Marvel Entertainment Group. Stewart was named the CNBC Marketing Executive of the Year after Marvel went public in 1991. Stewart, who earned his bachelor’s degree from Rutgers University and his law degree from

Cornell University, collects everything from jukeboxes to concert and movie posters. After announcing his retirement from the Hall of Fame, Stewart told an interviewer: “In my life of pop culture, it was always about music, movies and comic books for me, with music at the top. The opportunity that I’ve had to play some small role in the preservation and memorialization of this music that changed my life and the world is just incredible. It staggers me that I’ve been here and that I’ve been able to do this. There are interesting things going on in the music world, which continues to change in terms of how music is made and distributed. … I can’t imagine not doing something every day. I love being active and busy. You watch some people who sit down after they retire and usually wither away. Ain’t gonna happen.” BECOMING A CULTURAL DESTINATION Somehow Alderson convinced Stewart to use his talents to help El Dorado. While Barrow will continue to serve as the president of El Dorado Festival & Events, Stewart has come aboard as the chairman and CEO. “We want to make El Dorado a cultural destination focusing on entertainment and great food that will draw people from around the region and potentially around the country,” Barrow says. “We believe that with his well-recognized background in the entertainment industry, Terry Stewart is the ideal person to help us do that.” Stewart said at the time of his hiring: “My career has taken many twists and turns through the years, and that’s how I live it. I studied engineering and education and then got a master’s in business and a law degree. I worked in banking, strategic planning and business development, but I was always drawn to music and the arts in general. That’s what made working for Marvel and then the Rock Hall a dream come true for me. Working with El Dorado Festivals & Events will give me an opportunity to harness my passions and hopefully make a positive impact on the quality of life for this region and highlight this exceptional town.” Following a career that has seen him on a first-name basis with some of the biggest

names in the entertainment industry, Stewart seems genuinely excited about the chance to help transform a town in the pine woods of south Arkansas into something special. He said El Dorado’s leaders made the right move in hiring architect Paul Westlake, the managing director of the firm Westlake Reed Leskosky, which has offices in Cleveland, Phoenix, Washington, New York and Los Angeles. Westlake, one of the youngest architects to have been elected to the College of Fellows of the American Institute of Architects, has come up with a plan for renovating the Rialto and surrounding properties. “His firm is the No. 1 design firm in America in my opinion,” Stewart says.

Terry Stewart

“He specializes in theaters and other performance venues.” Six of the properties in the Commercial Historic District already are on the National Register of Historic Places. Stewart and Barrow want to have five performance venues in a dense cluster near the town square. The Rialto opened in 1929 with seating for 1,400 people. There’s an orchestra pit since live stage shows were held in addition to movies. The Rialto closed in 1980 but was restored by Richard and Vertis Mason a few years later. “What we want to emphasize is seating quality as much as quantity,” Barrow says. “We’ll reduce the seating to around 900 seats

with a bar in the front and a rear lobby and café that uses an existing building that once housed Trinca Shoe Repair.” ‘NEXT STEP IN THE PROCESS’ Another key facility is the former Griffin Auto Co. building. The three brothers who founded Griffin Auto Co. came to Union County from North Carolina in 1899 and opened a livery stable. As automobiles increased in popularity, the Griffin brothers obtained a Ford dealership in 1915. Once the oil boom began, they constructed a building in 1927 on Locust Street at the south end of Washington Street. The brothers had given up their Ford franchise a few years earlier but began selling Buicks in 1928 and added a Chevrolet dealership in 1931. There was also a filling station, a repair shop and even a horse stable and riding pen. A 1931 brochure noted: “The Griffin Auto Co. now stands ready at all times to serve the needs of the motoring public through any of its numerous departments with courteous attendants, factory-trained mechanics and the will to serve as its creed.” The El Dorado Glass & Mirror Co., which has been in the building since 1982, will be moving to a new location. The building is large enough for an events center that will handle 1,800 people seated and close to 4,000 standing. Stewart and Barrow envision a restaurant and lounge in the front of the building with a regular schedule of live entertainment along with a black-box theater in the building’s full basement. An amphitheater adjoining the building will be designed to seat 6,000 to 7,000 people. Stewart also would like to see artists’ quarters downtown. Richard Mason, who has been a driver of downtown development for decades now, thinks the plan can succeed. “You have to create enough critical mass to become a destination,” he says. “We’ve done that with retail shops and restaurants. We run into people from as far away as Shreveport who come here to do their Christmas shopping. These entertainment venues are the next step in the process.” www.talkbusiness.net

Insights

A GROUNDBREAKING DAY

Big River Steel’s investment of more than $1.3 billion in Arkansas is the single largest private investment in the state’s history.

The “godfather of Mississippi County.” That’s how Osceola Mayor Dickie Kennemore introduced Big River Steel Chairman and CEO John Correnti on Sept. 22 at the groundbreaking ceremony of the Big River Steel mill and recycling facility. “Never has a day touched me as deeply as being here celebrating with all of you,” Correnti said. “Northeast Arkansas is my home. So to have the opportunity to build the world’s most advanced steel mill here – powered not just by technology but by the work ethic of the people of Mississippi County – is for me an experience that is hard to put into words.” Big River Steel announced plans in early 2013 to build the “flex mill,” which will combine the cost advantages and flexibility of a traditional mini mill with the production capabilities in gauge, grade and width of an integrated mill. It will produce a range of high-strength, light-weight steels used in the automotive industry, wide and thick steels used in the most demanding pipe and tube applications, and electrical steels used in the energy industries. “Osceola’s workforce made this a destination for Big River,” Gov. Mike Beebe said, “but it took the efforts of many parties, including the Arkansas General Assembly, to make this historic project a reality.” Here’s a brief look at the project by the numbers.

It’s the FIRST SUPERPROJECT approved under Amendment 82 of the Arkansas Constitution, which allows the state Legislature to approve up to 5% of the state’s general revenue budget to be used for bonding of large-scale economic development projects. Big River Steel received $125 million from the state.

550 $75,000 NUMBER OF DAYS PROJECTED from the groundbreaking date to the first day of steel production.

Projected average ANNUAL COMPENSATION of the mill’s employees.

Big River Steel Chairman and CEO John Correnti and Gov. Mike Beebe at the groundreaking event

500 2,000 1,400 +

Number of ACRES at the mill site in Mississippi County.

Number of PEOPLE TO BE EMPLOYED during the construction phase.

1.3 billion

The COMPANY’S OUTLAY, making it the single largest private economic investment in Arkansas history.

Insights is compiled by Talk Business & Politics Editor Bill Paddack. Possible items for inclusion can be sent to him at wbp17@comcast.net.

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

Estimated number of PERMANENT JOBS the mill will provide.

Mississippi County, Arkansas – Soon to be the largest steel producing county in the United States – Is open for business !!!

Mississippi County A R K A N S A S

Our Greatest Industry Is Hard Work

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TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

Feature

UP AND DOWN THE

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Republicans hope to continue the trend of the last two election cycles while Democrats are seeking to change the equation in 2014. By Roby Brock Editor-in-Chief

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PHOTO: DOLLARPHOTOCLUB

www.talkbusiness.net

Feature: Election How will 2014 be remembered in Arkansas politics? Will it be a realignment year in that Republicans sweep into major offices at the federal, state and local levels? Will Democrats stave off the gains of the last two cycles and hold serve in keeping Arkansas a solid two-party state? No doubt, voters will soon let us know. Arkansas’ highly publicized propensity to veer all over the election map is well-chronicled. While a generation ago, in 1968, the state famously re-elected progressive Republican Win Rockefeller as governor, re-elected internationalist Democrat J. William Fulbright as senator, and cast enough ballots to give a plurality to American Independent Party candidate George Wallace, a segregationist, in the presidential race. More recently in 2010, Arkansas voters overwhelmingly re-elected Democrats Gov. Mike Beebe and then-Congressman Mike Ross in landslides, while also overwhelmingly supporting Republican John Boozman for the U.S. Senate and electing freshmen Republicans Rick Crawford and Tim Griffin to Congress by a large margin. State Republicans are counting on the trend lines of the last two election cycles that have seen an unpopular president become the weapon of choice to solidify their GOP base and drive independents by two-to-one margins to support Republican candidates. You can’t miss the mailers, TV ads and speech references that include tying every Democratic candidate from U.S. Senate to justice of the peace to Barack Obama. The president polls in the low 30% range in most public opinion polls and nationalizing local races has been a fastball pitch that Republicans keep throwing. Democrats are seeking to change the equation in 2014. A massive targeted field operation has been put in place for nearly a year. Its purpose is to identify and turn out dormant voters – those who typically vote only in presidential election cycles – as well as adding tens of thousands of newly registered voters to the potential electoral universe. Will it work? It’s never been tried in

Arkansas, but we’ll soon see. On the messaging front, Democratic candidates are distancing themselves from

There is plenty of fluidity in all of the races remaining, even as some races begin to firm up.

President Obama by pulling out all the stops to localize all races. Mark Pryor hasn’t voted with the President 93% of the time, as Tom Cotton and Republican allies contend. He’s running to keep out-of-state billionaires who have contributed to Cotton’s campaign from controlling Arkansas’ U.S. Senate seat. Democratic gubernatorial nominee Mike Ross doesn’t support former House Speaker Nancy Pelosi’s liberal agenda. He thinks you should know his opponent, Republican Asa Hutchinson, was a Washington, D.C., lobbyist. According to the latest Talk Business & Politics-Hendrix College polling, taken Oct. 15 and 16, Cotton holds his biggest lead yet over Pryor. Among 2,075 statewide likely voters, Cotton has a 49-40.5% advantage. The polling shows that independent voters are breaking two-to-one for Cotton

Asa Hutchinson-R

Mike Ross-D

Sen. Mark Pryor-D

Cong. Tom Cotton-R

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

and an expected gender gap that Pryor has been pursuing does not exist. “Moving into early voting, our survey says advantage Cotton,” noted Dr. Jay Barth, professor of political science at Hendrix College. “For Pryor to close the gap, a monstrous and effectively targeted turnout operation and the entrance of large numbers of new registrants into the fold are both essential.” In the governor’s race, the numbers are similar. Hutchinson holds a 49-41% lead over Ross. Again, independents and a lack of a gender gap have aided Hutchinson’s performance. But remember those fickle Arkansas voters? The polling among the congressional races offers interesting departures from the statewide ballot. In District 1, Congressman Rick Crawford, R-Jonesboro, is coasting over his Democratic rival, Heber Springs Mayor Jackie McPherson by a 52-30% margin. In July when we last polled, Crawford held a 14-point lead, which has now widened to 22 points. In District 2 – the most Democratic district in the state – Democrat Pat Hays, the former mayor of North Little Rock, is ahead 46-42% over Republican banker French Hill. In July, Hill led by a sliver, just one point, but a pounding round of attack ads attempting to tie Hill to disgraced former Democratic state Treasurer Martha Shoffner has pushed Hays ahead. There’s no contest in the District 3, where the Democrats didn’t even field a candidate. Congressman Steve Womack, R-Rogers, is winning in a cakewalk. But the Fourth District suddenly has a contest. Former state House Majority Leader Bruce Westerman, the GOP nominee, had a large 48-34% lead in July. Democrat James Lee Witt has shrunk the gap to a now competitive 44-42% race. There is plenty of fluidity in all of the races remaining, even as some races begin to firm up. The big unknown: how well executed will the Democrats’ GOTV (get out the vote) operation be and does the Republicans’ counteroffensive survive the assault?

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Feature: Election

State Voters Face Five Ballot Issues

By Bill Paddack

Barring any late legal action, five issues – three from the state Legislature and two from the public – will be on statewide ballots this year in the Nov. 4 general election. The University of Arkansas System Division of Agriculture’s Public Policy Center has compiled nonpartisan fact sheets on these issues. The following summaries are taken from these materials and are printed with permission from the center. Stacey McCullough, director of the center, said she hopes the information will give voters confidence that they truly know what the issues are about before they get to the voting booth. “Sometimes the legal jargon can be confusing,” she said. “Hopefully our fact sheets and other materials provide balanced, nonpartisan information about the ballot issues in a way that is understandable.” To view the full fact sheets, go to the center’s website at www.uaex.edu and then click on ballot fact sheets.

Issue No.

POPULAR NAME: An amendment empowering the General Assembly to provide for legislative committee review and approval of state agencies’ administrative rules. BALLOT TITLE: An amendment to the Arkansas Constitution providing that administrative rules promulgated by state agencies shall not become effective until reviewed and approved by a legislative committee of the General Assembly. WHAT IS BEING PROPOSED? Issue 1 would change the Arkansas Constitution to allow state senators and representatives to pass future laws that give legislative committees the right to review and approve state agency administrative rules before the rules could go into effect.

POPULAR NAME: An amendment allowing more time to gather signatures on a statewide initiative or referendum petition only if the petition as originally filed contained at least 75 percent of the valid signatures required. BALLOT TITLE: Proposing an amendment to Article 5, Section 1, of the Arkansas Constitution concerning initiative and referendum; and providing certain requirements for the correction or amendment of insufficient statewide petitions.

Issue No.

WHAT IS BEING PROPOSED? Issue 2 proposes adding to the Arkansas Constitution a requirement that ballot issue petitions submitted by the public contain a minimum number of valid signatures of registered voters before the Secretary of State’s Office allows petition sponsors more time to gather additional signatures. To receive more time for gathering signatures, a petition would need signatures from: • At least 75 percent of the necessary signatures of registered voters from 15 different counties, and • At least 75 percent of the necessary signatures of registered voters statewide. Currently a sponsor is automatically given an extension to gather additional signatures if a petition is submitted with the necessary number of signatures regardless of how many are valid. 38

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

Issue No.

POPULAR NAME: An amendment regulating contributions to candidates for state or local office, barring gifts from lobbyists to certain state officials, providing for setting salaries of certain state officials, and setting term limits for members of the General Assembly. BALLOT TITLE: To amend the Arkansas Constitution concerning elected state officials; prohibiting members of the General Assembly and elected constitutional officers of the executive department from accepting gifts from lobbyists, and defining key terms relating to that prohibition; prohibiting members of the General Assembly from setting their own salaries and the salaries of elected constitutional officers of the executive department, justices and judges; establishing a seven-member independent citizens commission to set salaries for members of the General Assembly, elected constitutional officers of the executive department, justices, and judges; establishing the appointment process for members of the independent citizens commission, and prohibiting members of the independent citizens commission from accepting gifts from lobbyists; prohibiting certain contributions, including contributions by corporations, to candidates for public office; prohibiting a member of the General Assembly from registering as a lobbyist until two years after the expiration of his or her term; and establishing term limits for members of the General Assembly.

POPULAR NAME: The Arkansas Alcoholic Beverage Amendment

Issue No.

WHAT IS BEING PROPOSED? Issue 3 proposes several changes to the Arkansas Constitution. Briefly summarized, these include: • Gifts From Lobbyists: The proposed amendment would prohibit Arkansas constitutional officers, members of the General Assembly and members of the independent citizens commission (established by this proposed amendment) from soliciting or accepting a gift from a lobbyist or person acting on behalf of a lobbyist. • Independent Citizens Commission: The proposed amendment would create an independent commission to set salaries of state elected officials and provide recommendations regarding reimbursements and “per diem,” which is an additional payment legislators receive to help pay for meals or lodging when they are performing official duties. Salaries are currently set by the General Assembly within guidelines contained in the Arkansas Constitution. • Campaign Contributions: The proposed amendment would establish constitutional law regarding contributions to candidates running for political office. The state’s Constitution does not currently address campaign contributions. Laws concerning campaign contributions currently exist only in Arkansas Code (laws that can be changed by the Arkansas General Assembly). • Lobbying by Former Legislators: The proposed amendment would prohibit a former member of the Arkansas General Assembly from registering as a lobbyist until two years after his or her elected terms expires. Arkansas Code currently prohibits legislators from serving as lobbyists for at least one year after their term expires. • Term Limits: The proposed amendment would allow legislators to serve 16 years total in the House or Senate instead of chamber-specific term limits for the House of Representatives and Senate. Current limits are six years in the House of Representatives and eight years in the Senate.

BALLOT TITLE: A proposed amendment to the Arkansas Constitution to provide that, effective July 1, 2015, the manufacture, sale, distribution and transportation of intoxicating liquors is lawful within the entire geographic area of each and every county of this state; that “intoxicating liquors” is defined for purposes of the amendment as any beverage containing more than one-half of one percent (0.5%) of alcohol by weight; that the manufacture, sale, distribution and transportation of intoxicating liquors may be regulated, but not prohibited, by the General Assembly; and that all laws which conflict with the amendment, including laws providing for a local option election (wet-dry election) to determine whether intoxicating liquors may be sold or not sold, are repealed to the extent that they conflict with the amendment. WHAT IS BEING PROPOSED? Issue 4 would change the Arkansas Constitution to make the sale, manufacture, distribution and transportation of alcohol legal statewide. It would end the practice of local elections on alcohol sales, a process commonly called “wet” or “dry” elections. State legislators would continue to have the ability to regulate the sale, distribution and transportation of alcohol, but could not prohibit it. POPULAR NAME: An act to increase the Arkansas Minimum Wage BALLOT TITLE: An act to amend the Arkansas Code concerning the state minimum wage; the act would raise the current state minimum wage from six dollars and twenty-five cents ($6.25) per hour to seven dollars and fifty cents ($7.50) per hour on Jan. 1, 2015, to eight dollars ($8.00) per hour on Jan. 1, 2016, and to eight dollars and fifty cents ($8.50) per hour on Jan. 1, 2017.

Issue No.

WHAT IS BEING PROPOSED? This initiated act would increase the state minimum wage from $6.25 to $7.50 per hour on Jan. 1, 2015, then to $8.00 per hour on Jan. 1, 2016, and finally to $8.50 on Jan. 1, 2017.

ANNUAL MEETING NOVEMBER 12 STATEHOUSE CONVENTION CENTER LITTLE ROCK

Stephen Moore, chief economist at The Heritage Foundation, will be the keynote speaker at the State Chamber/AIA 86th Annual Meeting on November 12 at the Statehouse Convention Center in Little Rock. www.talkbusiness.net

Feature: Election

Candidates in Major Races Early voting for the Nov. 4 general election began on Oct. 20 and runs through Nov. 3. On Election Day itself, polls are open from 7:30 a.m. to 7:30 p.m. Secretary of State Mark Martin reminded voters earlier in the fall that they can take advantage of the resources his office offers. “I want to make sure Arkansans know we are here to serve them,” Martin said. “Our elections team has worked year-round with our county clerks to prepare for this upcoming election. Our website is full of information on updated election laws, ballot issues and a list of candidates with background information on each. We want Arkansans to head to the polls well informed on exactly what they are voting on.” The website for Martin’s office is www.sos.arkansas.gov. The following is a list of the candidates in the major races on the ballot.

FEDERAL RACES U.S. SENATE – Congressman Tom Cotton, R-Dardanelle; Sen. Mark Pryor, D-Little Rock; Nathan LaFrance, L-Bella Vista; and Mark Swaney, G-Huntsville. FIRST CONGRESSIONAL DISTRICT – Congressman Rick Crawford, R-Jonesboro; Jackie McPherson, D-Heber Springs; and Brian Scott Wilhite, L-Cabot. SECOND CONGRESSIONAL DISTRICT – Patrick Henry Hays, D-North Little Rock; French Hill, R-Little Rock; and Debbie Standiford, L-North Little Rock. THIRD CONGRESSIONAL DISTRICT – Congressman Steve Womack, R-Rogers, and Grant Brand, L-Pea Ridge. FOURTH CONGRESSIONAL DISTRICT – State Rep. Bruce Westerman, R-Hot Springs; James Lee Witt, D-Dardanelle; and Ken Hamilton, L-El Dorado.

STATEWIDE RACES GOVERNOR – Asa Hutchinson, R-Rogers; Mike Ross, D-Little Rock; Josh Drake, G-Hot Springs; and Frank Gilbert, L-Tull. LIEUTENANT GOVERNOR – John Burkhalter, D-Little Rock; Congressman Tim Griffin, R-Little Rock; and Christopher A. Olson, L-Leslie. ATTORNEY GENERAL – Leslie Rutledge, R-Little Rock; state Rep. Nate Steel, D-Nashville; and Aaron Scott Cash, L-Springdale. SECRETARY OF STATE – Susan Inman, D-Little Rock; Secretary of State Mark Martin, R-Prairie Grove; and Jacob D. Holloway, L-Little Rock. TREASURER – Karen Sealy Garcia, D-Hot Springs; Dennis Milligan, R-Alexander; and Chris Hayes, L-Little Rock. AUDITOR – Regina Stewart Hampton, D-Little Rock; state Rep. Andrea Lea, R-Russellville; and Brian Leach, L-Fort Smith. LAND COMMISSIONER – Land Commissioner John Thurston, R-Little Rock; Mark A. Robertson, D-Little Rock; and Elvis D. Presley, L-Star City. 40

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

New EPA rules hurt Arkansans just like you. It’s time for the truth. You may have heard that Arkansas is “well-positioned” to implement new Environmental Protection Agency (EPA) rules restricting coal energy. But here’s the truth: 1. The new regulations will force our most economical and reliable power plants to shut down. 2. Replacing coal plants with natural gas plants will increase your electric bills by up to 30%. 3. Despite the enormous cost of implementing these new EPA rules, the result will be less than a 1% reduction of CO2 gasses globally.

The proposed EPA rules are unfair to Arkansans. Help us send that message to the EPA at www.tellepa.com.

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Point Counterpoint Why Arkansas Voters Should OK Alcoholic Beverage Amendment By David Couch

David Couch

n Nov. 4, the voters of this state will have the freedom to decide if the sale of alcoholic beverages will be legal in all of Arkansas’ 75 counties. It is a choice that has been denied to many of the citizens in the dry counties and cities of this state because of substantial barriers established by the existing liquor stores and their lobbyists in order to protect their vast profits. The Arkansas Alcoholic Beverage Amendment is a grassroots movement that originated when citizens from all parts of the state attempted to get a local option election on the ballot but found that task too burdensome and banded together to see that all Arkansans get to voice their opinion on this issue. Why was it too burdensome? Because the threshold of signatures for changing alcohol sales laws in Arkansas is 38% of the signatures of registered voters. For issues such as sales tax initiatives, it’s 15%. At the core of this movement is the desire to see that their community gets to benefit from the substantial economic and social benefits derived from the sale of alcohol. Such sales not only benefit the counties and cities by virtue of the taxes they generate, but also draw commercial and retail growth to the counties and cities and make the areas more appealing to businesses and their employees. These benefits are real, and dry counties are missing out. This year the Center for Business and Economic Research at the Sam M. Walton College of Business at the University of Arkansas assessed the revenue and economic impacts of Craighead, Faulkner and Saline counties becoming wet. In these three counties alone, the study determined that alcohol sales will generate $389,022 in county sales tax revenues (Saline County has no sales tax), $916,530 in city sales tax revenues and $165,630 in property tax revenues. In addition to tax revenues, it was estimated that it would create 436 new local

jobs with an estimated local labor income of $17,025,898. Using standard economic multipliers to estimate the total economic impact of allowing alcohol sales in these three counties alone was $34,228,035. If a new business were coming to our state that would generate that much revenue and jobs, Arkansans would definitely be behind it. Arkansas’ arcane liquor laws date back to the repeal of prohibition and have been modified over the years to create a patchwork of complex and confusing laws, many of which were enacted as a way to allow alcohol to be sold in dry areas. The number of dry counties in Arkansas nearly equals the number of dry counties in the remainder of the United States. The Arkansas Alcoholic Beverage Amendment authorizes the sale of alcoholic beverages in all counties; however, it specifically authorizes the General Assembly to regulate the sale of alcohol. Anticipating that some existing regulations might need to be revised when the amendment passes, the sponsor of the amendment made it effective on July 1, 2015. The General Assembly meets in January 2015 and can therefore make new – or change existing – regulations to prepare for the amendment to take effect. In addition, the counties and cities in anticipation of the sale of alcohol can exercise their local control through zoning and planning laws prior to July 1, 2015. It’s also important to note that the amendment does not change any current regulation, including: • It does not allow liquor stores to be next to a church or a school. • It does not do away with the election to allow the sale of mixed drinks. • In Arkansas, only one person or corporation can have a permit to operate a liquor store and must live in the county or within 35 miles of that store. There is nothing in the amendment that would change any of these laws.

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

Opponents claim that the amendment does away with local control, but this assertion is hypocritical. Yes, it is true that a local option election will not be available if the amendment passes; however, as this article started it shall end: The local option election is not a choice for most of the citizens in the dry counties and dry cities of this state. The existing liquor stores and their lobbyists have enacted barriers to this choice, citizens in dry counties are not able to go to the polls to vote on this issue, and many counties haven’t allowed such elections in generations. No better example can be given than with the effort earlier this year to get the local option on the ballot in Faulkner County. According to reports filed with the Arkansas Ethics Commission, the county-line liquor stores in Conway and Pulaski counties spent $330,697.72 on efforts to keep this issue off the ballots for Faulkner County citizens. Is that local control? Faulkner County activists wanted their citizens to vote on this issue, but could not bring it to the ballot due to influence and pressure from out-of-county liquor stores. These same liquor stores, along with others from around the state, are funding the opposition to this amendment statewide. These people want voters to believe that they support local control, but when these same voters try to exercise their own right to self-government they are thwarted at every turn. The Arkansas Alcoholic Amendment will have a tremendous positive impact on the Arkansas economy. It will lead to the modernization and standardization of the regulation of alcohol in Arkansas. Finally it will give every Arkansan the freedom to decide this issue with his or her individual vote. David Couch is a native of Newport and a lifelong Arkansan. He is a practicing attorney in Little Rock and has been involved in numerous initiated issues over the years.

Point Counterpoint Why Arkansans Should Oppose Far-Reaching Alcohol Amendment By Brian Richardson

n November, Arkansans will vote on the Arkansas Alcoholic Beverage Amendment (Issue 4). The Alcohol Amendment aims to change our state Constitution and repeal current local decision-based laws. The Alcohol Amendment seeks to change the current framework that delegates certain important decisions to local and county elections. Currently, individual Arkansas counties have the right to decide whether or not retail alcohol sales are legal within their boundaries via the “local option.” Within wet counties, communities or “townships” are also able to choose their status regarding alcohol sales. If the Alcohol Amendment passes, local communities will forfeit any future control regarding retail alcohol sales, forever. Not only will the local option law be repealed but even counties that cast a majority of votes “against” this radical proposal will be forced to allow liquor sales in every community, neighborhood and school district. Proponents of the Alcohol Amendment claim the local option is “no option.” However, the local option has been exercised five times in the last three election cycles and two counties will vote on this important issue this November. Citizens for Local Rights was formed to protect this fundamental right of local control. Individual communities shouldn’t lose local control just because a handful of out-of-state alcohol retailers don’t want to follow the laws of our state. Voters need to know what they stand to lose if the Alcohol Amendment passes. There is a lot of misinformation about the Alcohol Amendment. Below are eight important issues that voters should know about the Alcohol Amendment before casting their “for” or “against” votes this November. 1. The Alcohol Amendment takes away the right for local communities and

Brian Richardson

individual counties to vote whether selling alcohol is allowed in their area. If passed, the Alcohol Amendment will forever eliminate individual counties’ right to make this choice. 2. The Alcohol Amendment makes the sale, manufacture, transportation and distribution of intoxicating liquors legal in every geographic area of each and every county of this state. This clause undoubtedly endangers “buffer zones” that restrict liquor sales within 1,000 feet of a church, school or daycare facilities. This loophole could have been closed with the simple language stating that alcohol sales would be prohibited in these areas. Grocery stores, convenience stores and big box retailers don’t want a 1,000-foot buffer. There is no mention of any buffer zone in the Alcohol Amendment. 3. Passage of this amendment will make it legally impossible to vote on a local level to return to a dry status. Even counties that have no desire to allow alcohol sales or bars will have no remedy to deny liquor sales in any community, neighborhood or school district. 4. Much of the Alcohol Amendment will be open to interpretation. This puts our communities in a vulnerable spot. While the Legislature is allowed under the amendment to “regulate,” they cannot “prohibit” alcohol sales. This will severely weaken our Legislature’s ability to control many alcohol-related issues, such as sales in the close proximity of schools and churches. It is a legal gray area as to what laws would pass constitutional muster if this amendment is passed, undermining the best wishes and intents of our legislators. 5. The County Judges Association, major party candidates for governor, multiple county quorum courts and countless local officials feel this issue should be decided via local election and they oppose this

amendment. Roughly 80% of Arkansans feel that important decisions, such as allowing alcohol sales, should be decided at the local level and communities should not be forced to allow sales against their will. 6. If the amendment fails, the state does not “go dry.” There would simply be no change to current alcohol laws. 7. Residents of currently wet areas receive no additional benefit from the Alcohol Amendment. 8. The Alcohol Amendment is an amendment to the Constitution of the State of Arkansas. The state Legislature and/or our courts would be powerless to change this irreversible proposal. Passage of this amendment would set a dangerous precedent for additional issues that have previously been designated as responsibilities of local communities. The current system of local option elections works. It provides counties with the control to make their own choices. The Alcohol Amendment will take away local control from communities. “Let Arkansas Decide” is simply trying to undermine our state Legislature and remove the power to locally govern our communities and counties in Arkansas. The Alcohol Amendment is an inappropriate attempt to manipulate our Constitution just to boost the profits of its backers. The most important thing voters can do is to educate themselves on the issues and make an informed decision in the voting booth. The simple fact is the Alcohol Amendment (Issue 4) is just too overreaching, too broad and too dangerously written for our state, our counties and our communities. Brian Richardson is an Arkansas resident and the chairman of Citizens for Local Rights, a ballot question committee formed to oppose the Alcohol Amendment.

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Insights

THIRSTY CONCERT CROWDS KNOCK BACK BIG NUMBERS It’s been another good year for concerts in Central Arkansas as artists such as Cher, Bruno Mars, Blake Shelton, James Taylor, Eric Church and others have headlined events at Verizon Arena in North Little Rock. The concert industry can certainly be big business – with huge numbers to go with it. So when a popular act comes to town, it’s not only good for fans, but the area’s economy as well. With the help of Jana DeGeorge, marketing director for Verizon Arena, we decided to take a look behind the scenes at one of these events. Country star Shelton’s June 22 stop on his “Ten Times Crazier Tour 2014” also included the Band Perry, Dan + Shay (the new country duo comprised of Dan Smyers and Arkansan James Shay Mooney) and Neal McCoy. Shelton delighted the crowd of 13,962 with such numbers as “Austin,”“Home” and “Boys Round Here,” but it was probably some other figures that had local officials smiling. For starters, 13,424 tickets were sold with a gross of $653,504. Sales taxes collected, including those on tickets sales, food and beverage, merchandise, etc., totaled more than $102,000. Being summertime with warm temperatures outside, the crowd proved a bit thirstier than they were hungry, but jumbo hot dog sales still hit $1,354.26, or 302 jumbo hot dogs, hamburgers came in at $693.72, or 119 burgers, and 199 orders of nachos totaled $892.28. And while Shelton was on stage singing about drinking ice cold beer, his fans were doing just that. Draft beer sales totaled $49,464.22, or a whopping 8,986 16-ounce beers. Those who preferred beer in a 24-ounce can spent $21,500.92. As you might have guessed, Bud Light was the most popular choice ($8,422.02 in sales, 1,020 cans). The runner-up in 24-ounce can sales was Michelob Ultra at $4,689.91 in sales of 568 cans. But beer’s not the only thing to drink at concerts. That evening also saw the sale of 2,693 sodas in 32-ounce souvenir cups for a total of $13,651.15, 1,891 20-ounce bottles of Dasani bottled water for a total of $6,971.43, and 1,518 Igloo margaritas for a total of $16,039.25. As Shelton might say, that’s how we do it ’round here. – Bill Paddack 44

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

Blake Shelton performs at Verizon Arena.

PHOTO BY NELSON CHENAULT

13,424

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653,504

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and agriculture go hand in hand. To a farmer, the land is more than just a livelihood ... itâ&#x20AC;&#x2122;s a legacy, an heirloom, a gift to future generations of growers.

To see how Arkansas farmers are feeding a growing planet and reducing their ecological footprints, visit www.arfb.com/for-consumers/arkansas-ag-facts . www.talkbusiness.net

Industry PHOTOS: DOLLARPHOTOCLUB

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

What to Do About Turner Grain? Policymakers contemplate a variety of responses to a mammoth farming crisis. By Steve Brawner The loss by Arkansas farmers of millions of dollars unpaid by Brinkley-based Turner Grain Merchandizing likely will result in state legislation next year. What that legislation will look like, no one yet knows. Dealers such as Turner Grain buy and resell grain from producers. Dozens of farmers say they have not been paid by that company and others owned by the same people, and the grain has not been located. Many are taking legal action to try to recover losses from a dealer that no longer is in business. Arkansas has no laws pertaining to grain dealers. It does have laws pertaining to warehouses, but warehouse owners can choose to be certified by state or federal authorities. Future legislation will depend on facts that have not yet been gathered. The state still doesn’t know how many farmers were hurt and how much they lost. Many farmers have hired attorneys and are no longer saying much. “There’s sort of some substantive areas that people are getting their minds around, and then there’s still sort of the practical reality of, just what the heck has happened, and how bad is it?” said Harrison Pittman, director of the University of Arkansas System Division of Agriculture’s National Agricultural Law Center. Butch Calhoun, Arkansas’ secretary of agriculture, in October estimated at $50 million the total losses by farmers allegedly

cheated out of their crops. Individual losses have ranged from $30,000 to more than $2 million. Aside from those farmers, others who had booked their corn with Turner Grain at $5.50 to $6 per bushel were being forced to sell for $3.50 because this has been a bumper crop, and prices are down. “They had booked it back early when the price was still up, and now their market’s gone,” he said. OTHER STATES’ LAWS The National Agricultural Law Center is conducting research on other states’ laws that will be shared by those interested in drafting legislation. At Pittman’s behest, Jerry Quick, former senior counsel for the Illinois Farm Bureau, spent three days in Arkansas explaining that state’s comprehensive law. Terry Walker, assistant director of the State Plant Board, said his agricultural regulatory agency also is collecting information from other states to see how their laws are structured. States have very different rules based on their own situations, so finding a model is difficult. Pittman said some mechanisms are used by a number of states, including licensing and audit processes. Some states have a “prompt payment provision” where, at the seller’s request, payment must be made immediately or within a specified period of time. Bonding is a common requirement, though Pittman said it’s an inadequate solution because the bonds will

never be high enough to help everyone who has been hurt. That was the case in Illinois, where the state’s farmers suffered devastating losses in 1982. The next year, the state switched from a bonding mechanism to an indemnity fund. Grain warehouses and dealers, farmers and lenders pay into a fund from which farmers can draw claims of up to 100 percent of losses up to $1 million. It’s worked well in Illinois, Quick said. The fund’s maximum amount is $6 million, which would be inadequate in Arkansas, where farmers have fewer options and sell more grain to a single dealer. Indemnity funds have certain advantages in that if they grow to an adequate size without being drawn upon, farmers can stop paying into them. On the other hand, paying into an indemnity fund penalizes farmers who have done nothing wrong and are already paying into numerous other funds to protect themselves against various calamities. Moreover, Pittman said some have argued that an indemnity fund facilitates irresponsible behavior. “If people know there is an indemnity fund, they might play a little more fast and loose, and producers might say, ‘They’re just doing that with our money. They know that we get paid back with our own money,’” he said. In Illinois, the state’s Department of Agriculture is statutorily required to place a lien on the property of a failing warehouse www.talkbusiness.net

Industry: Turner Grain or dealer. It must then seize assets and whatever grain is available and sell them off for the benefit of the farmers who have been harmed. That provision has allowed some victims to be made whole without the need to draw from the indemnity fund, Quick said. Pittman pointed out that there’s a difference between what makes the most sense substantively and what can pass politically. According to the Arkansas

Democrat-Gazette, a bill introduced in 1991 to require grain dealers to be licensed and bonded passed the Senate unanimously but died in a House committee. FACTS DEVELOPING SLOWLY Among the groups that will influence legislators is the Arkansas Farm Bureau. Jeff Pitchford, director of public policy, state affairs, said the Bureau’s current policy is to support requiring grain dealers and brokers

Making health care better starts by putting the patient first. Sister Judy Raley, SCN Board Member

At CHI St. Vincent, we’re constantly looking for ways to make health care better for you and your family. We are guided by a philosophy that was simply stated in 1954 by Sister Michaela Duke, SCN, our leader at that time, who said “the patient comes first!” This still drives everything we do today. The exceptional care we provide is easy to recognize. U.S. News & World Report recently named CHI St. Vincent Infirmary the state’s #1 hospital for the second consecutive year. The nursing care we provide is unmatched in Arkansas, as evidenced A Cost Leader by the prestigious Magnet® status and Pathway to Excellence® designations for 1.52 our hospitals in Little Rock and Morrilton, BETTER VALUE respectively. And data from health care AVERAGE .94 .84 COST consultants McKinsey & Company show that we provide this level of care at a lower CHI UAMS BAPTIST cost than anyone else in central Arkansas. ST. VINCENT That’s how we’re continuing to make health care better for Arkansans.

Above Average

Average

Below Average

SOURCE: McKINSEY & COMPANY OPERATING COST INDEX FOR HOSPITALS – MOCHI

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

CHIStVincent.com

to be licensed and bonded, but it opposes an indemnity fund for grain dealers and warehouses. Pitchford said his association’s policy development process starts at the county level and concludes with its December statewide convention, where members pass resolutions that give the Bureau its “marching orders for the next year.” Among the ideas being discussed is a trigger that would alert the state to perform an audit on a dealer that may be struggling. It’s hard to imagine state legislators failing to at least try to address the problem. The Turner Grain situation has attracted a lot of attention from a politically powerful group, the state’s farming community. State Rep. Matthew Shepherd, R-El Dorado, current chairman of the House Agriculture, Forestry and Economic Development Committee, said, “I would think that there is a high probability that there will be some legislation, at least some legislation that is introduced and will pass that essentially arises from this situation and how to prevent it in the future.” But Speaker of the House Davy Carter, R-Cabot, who is term-limited, said he can’t predict at this point what will happen when the Legislature meets in January. The facts are developing slowly, and the buying and selling of grain involves a complicated business model. Legislators must proceed carefully so as not to create unintended negative consequences. “What we can’t do is interfere with putting the buyers and sellers together,” he said. Carter said during a joint meeting of the House and Senate Agriculture Committees and in an interview with Talk Business & Politics that the Legislature can only look to address future problems and can’t use state funds to retroactively reimburse the farmers who already have been hurt. Those farmers instead will have to seek relief from the court system. “The government can’t prevent undercapitalized businesses from failing or businesses from not performing on their contractual duties,” he said. “That’s a slippery slope [and it’s] not good public policy to do that, to spend taxpayer dollars on losses like that.”

Industry

Game Changer

Delta Plastics’ New Water Initiative Could Reduce Usage 20% By Talk Business Staff Delta Plastics and a consortium of agricultural interests in Arkansas have launched a new water conservation software initiative that leaders say could reduce water usage by 20% by the year 2020. Delta Plastics Chairman Dhu Thompson calls the H20 Initiative “the most important conservation effort” his company has ever launched. “‘Preserving our farmland’ has been our company slogan for nearly 20 years,” Thompson said as the initiative was announced at the Delta Plastics facility at Little Rock. “But conservation and sustainability is so much more than a slogan for us. It is a principle that has driven every major operational decision

that we have made.” The effort will provide irrigation management software to farmers at no charge through a user-friendly, Web-based application designed to help farmers create more efficient pipe irrigation of crops. The free program allows for computerprecision distribution of water through irrigation pipes more evenly, thus saving money from wasted run-off water. The software, called Pipe Planner, was actually designed more than 20 years ago and called “Faucet” at the time, Thompson said, but it was not user-friendly. Thompson said he contacted the developers and over the last four years has worked to simplify the interface to allow more widespread usage.

Thompson also said that after spending millions of private dollars to redevelop the product, he determined it should be offered for free in order to promote its widespread usage and benefits. Delta Plastics estimates average water savings of 25 to 50% in addition to an average 25% reduction in energy costs when using Pipe Planner. Thompson said based on experiments with the software, he estimates that farmers in the Delta could “save more than 1 trillion gallons of water per year.” Delta Plastics is the largest recycler of plastics in Arkansas, recycling more than 1 billion pounds of waste annually across the Delta.

Stakeholders to Help in Educating Farmers A large consortium of stakeholders will help educate farmers and other interested parties on the benefits of the Pipe

Planner software. The Delta Plastics H20 Initiative will: • create a public/private partnership between Delta Plastics and the University of Arkansas Division of Agriculture, Mississippi State University and other universities in the region of the Mississippi Delta; • host educational forums for farmers, university extension agents and private consultants focused on Pipe Planner implementation; and • allow participants to collaborate on the most efficient water use practices. “Agriculture has been working tirelessly to contribute efficiencies and new conservation practices to ensure the longterm availability of our natural resources,” Arkansas Farm Bureau Executive Vice President Rodney Baker said. “With the H2O Initiative, we’re pushing even farther in those efforts.”

Stakeholders include:

Agricultural Council of Arkansas Arkansas Agriculture Department Arkansas Association of Conservation Districts Arkansas Farm Bureau Arkansas Rice Federation Arkansas Natural Resources Commission Arkansas Corn and Grain Sorghum Promotion Board Arkansas Cotton Council

Arkansas Soybean Promotion Board AgHeritage Farm Credit Services Bayou Meto Irrigation District Delta Council/Delta F.A.R.M. Ducks Unlimited Louisiana Cotton and Grain Mid-South Soybean Board Mississippi State University Natural Resources Conservation Service (Arkansas)

Natural Resources Conservation Service (Mississippi) Natural Soybean and Grain Alliance The Nature Conservancy Tri-State Soybean Forum United Sorghum Checkoff Program University of Arkansas Division of Agriculture

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Industry PHOTO: DOLLARPHOTOCLUB

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

Poised For Growth AEDC Executive Director Grant Tennille believes Arkansas is poised to become a big player in the biomass sector as the wood pellet market takes off. By Wesley Brown Arkansas’ burgeoning biomass industry got a big boost earlier this summer when in the space of 30 days two privately held investor groups announced multi-million dollar projects to produce commercially viable fuel from the state’s vast supply of forest dregs. On July 30, Zilkha Biomass Energy announced plans to build a proprietary black wood pellet manufacturing plant in Monticello that company officials said could be easily integrated into the energy grid as a clean energy alternative to coal-powered electricity. “Power companies across the globe are looking for renewable energy alternatives and biomass wood pellets stand as one of the most practical and cost-effective solutions,” said Jack Holmes, CEO of Zilkha Biomass Energy. “This plant in Monticello will be one of Zilkha’s largest and will help us capture more of the growing biomass energy market.” Less than a month after the Zilkha announcement, Highland Pellets LLC announced on Aug. 25 that it was building a 500,000 metric ton per year wood pellet facility in Pine Bluff, about an hour’s drive north from Monticello. In its news release, Highland boasted that its $130 million plant will create more than 35 direct jobs and another 482 offshoot jobs that would provide an $86 million a year financial bounce to local communities. Grant Tennille, the executive director of the Arkansas Economic Development Commission, is one of the state’s biggest cheerleaders for the biomass industry.

He also said Gov. Mike Beebe has been a staunch supporter of the renewable and clean energy industry since he was first sworn in as the state’s 45th chief executive in 2007. “The governor has been talking for years that our biomass resource needs to be leveraged.” Tennille said in a recent interview. “We need to find ways to sell Arkansas biomass and I think the economics right now are very strong.” PROJECTS ATTRACT INVESTMENT DOLLARS According to Tennille, a number of factors have come into play to make it a perfect time for the development of an Arkansas wood pellet industry. First, the Pine Bluff and Monticello projects include trustworthy investors that have the necessary capital and management experience to make the Arkansas projects a full-scale success. “We are dealing lately with more credible people than in the past,” Tennille said. “And over time, we got a lot smarter and better in how we [recruit] and negotiate with people who come to us,” Tennille said. “And in the last six months, the math seems to be changing. They are showing up with longterm contracts for these pellets, and [current market] prices are giving them some margins.” For instance, Highland is led by former Wall Street executive Tom Reilley, a former senior managing director at the New Yorkbased Bear Stearns investment firm that failed in 2008 in the global financial crisis.

Today, Reilley is a successful private investor with stakes in a number of biotech and renewable energy firms in Boston, Singapore and the United Kingdom. The Highland team also includes several experienced executives who will lead the development of the Arkansas plant. Scott Jacobs, director of business development, and Mike Ferguson, director of engineering and operations, together operate a company called AgriRecycle, which specializes in the design and construction of wood pellet facilities. Down the road in Monticello, Zilkha Biomass has also put together a team with a strong financial resume and a management team that has built and operated several wood pellet plants. The company currently operates a pilot plant in Crockett, Texas, that has production capacity of 40,000 metric tons of pellets per year. Company spokesman Jonathan Ohueri said the company also is building another wood pellet mill in Selma, Ala., which is scheduled for commissioning later this year. That facility will have a production capacity of 275,000 metric tons of pellets per year. “Black pellets produced at this mill are already committed to an interested customer,” he said. In addition, Ohueri said the Monticello black pellet plant already has the necessary financial backing for the project, which will be funded through a combination of new market credits and bond financing. But what gives the project instant credibility is the fact that Zilkha Biomass is partly owned by Silicon Valley-based Vulcan Capital, www.talkbusiness.net

Industry: Biomass the investment vehicle for Microsoft Corp. co-founder and billionaire Paul Allen. WEEDING OUT ‘SHAKY CHARACTERS’ Still, without mentioning any names, Tennille admitted that the renewable energy business has attracted “snake oil types and shaky characters” to Arkansas in the past, including a number of biomass and “green energy” ventures that have preyed on Delta communities. Perhaps the most infamous biomass project in Arkansas was also a highlytouted wood pellet plant. In 2009, Hot Springs lawyer Stephen R. Walker unveiled a proposed $180 million Phoenix Renewable wood pellet plant in Camden, which would be headquartered in the town’s shuttered International Paper plant and bring more than 400 jobs to the south Arkansas community. When Walker first announced the project, the ground-breaking ceremony included a long list of political supporters – including U.S. Sen. Mark Pryor and then Congressman Mike Ross, who is now running for governor. The business venture was so well-publicized that the Wall Street Journal mentioned the Camden project in a July 2009 story hyping the “lowly wood pellet” as one of fastest growing sources of renewable energy in the world, along with wind and sun. But hardly a year had passed before that venture ran into trouble. In May 2010, the Arkansas Securities Department issued a “cease and desist” order against Phoenix and Walker for multiple violations of the Arkansas Securities Act. The order halted Walker and his limited partnership from soliciting and selling securities for the Camden wood pellet plant, saying the stock in the company was not registered or exempt from registration as required by Arkansas securities law. According to the order, more than 50 people had invested about $1.4 million in Phoenix between 2009 and 2010. During the same time period, the company had expenditures of about $1.4 million under former CEO Sam Anderson. Those expenses included over $250,000 in payments made

directly to Walker and over $80,000 in payments to Anderson, his companies and his family, according to a state securities filing. But Phoenix was not the only questionable renewable energy project. Other similar projects began popping up in Arkansas and across the South shortly after the Obama administration began committing federal dollars to so-called “green energy” projects as part of the president’s overall energy policy. One of the most notorious was Destin, Fla.-based Global Green Holdings LLC, operating through its shell recycling firm

“The shared qualities between our product and coal reduce or remove the need for expensive plant retrofits when switching to our fuel.” – Jonathan Oheuri Zilkha spokesman

called Waste Not Technologies (WNT), which approached a number of rural communities across the South and the Midwest with promises of thousands of high-paying jobs. In the space of just a few months in 2008 and 2009, at least five rural communities in Oklahoma, Kansas, Michigan, South Carolina and Kentucky held big economic development ceremonies with WNT officials. Each community got the same identical sales pitch – that WNT would invest $150 million to bring 1,400 highpaying jobs to these communities by building an 800,000-square-foot recycling factory. Surprisingly, many of these communities

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

were hooked by WNT’s marketing ploy that it had a proprietary formula that could turn everyday household garbage into usable products and building materials, a process most recycling experts said was virtually impossible. A South Arkansas economic development official said WNT approached several communities in the Arkansas Delta with the same proposal, but talks never moved forward because of questions about the company’s financial integrity. But WNT was still able to convince economic development officials in Herington, Kans., and Manchester, Ky., that their grandiose proposal was legitimate. In June 2009, the Kentucky Economic Development Finance Authority approved a deal to give WNT up to $42 million in incentives – tax money it would get to keep if it created the 1,400 jobs in Clay County community. But nothing ever happened, except WNT conning the city and a local construction company out of $1.32 million as an advance fee to jump-start the project. Once the WNT officials got their hands on the money, they left the poor Kentucky community empty-handed and embarrassed. In August of this year, nearly five years after the WNT scheme ended, a grand jury in Kentucky charged WNT’s David R. Bennett, Daniel R. Goodwin, Sidney A. Tarrant and Izhar H. Syed with conspiracy and five counts of mail fraud. The U.S. Attorney’s office in Kentucky has requested warrants to have the four arrested and brought to Kentucky, but so far the WNT officers have not been apprehended. Both Tarrant’s and Bennett’s names have come up in other alleged scams in Arkansas. In November 2011, Arkansas fuel supplier Magness Oil Co. of Gassville, Ark., filed a federal suit against Tarrant and others, saying he owed the company $500,000 in another advance fee loan deal turned sour. Similarly, Eagle Creek Construction and Development Inc. of Bentonville won a $3.6 million default judgment against Bennett for his involvement in an advance fee scheme to provide upfront funding for a Northwest Arkansas real estate development. Altogether, more than 20 judgments for tens of millions of dollars have been entered

Entergy Arkansas’ rates are lower than the state and national averages. And here’s our plan to keep them low.

At Entergy Arkansas, we work not only to ensure reliable power, but also to make sure that power remains affordable. That’s why Entergy Arkansas customers have rates below the average for Arkansas and the nation – and why we are committed to keeping costs down while creating value for customers now and for years to come.

1. Providing reliable power. Our plan includes strengthening the electric grid from transmission lines to substations to transformers – to prevent storm outages by planning and maintaining a more robust network.

2. Lowering costs. Keeping a balanced mix of energy resources is an important ingredient to providing customers with clean, reliable, and affordable electricity. Entergy Arkansas also joined the Midcontinent Independent System Operator (MISO) several months ago. And we’re already seeing monthly savings by having access to a large power market that allows us to further reduce costs.

3. Generating jobs. Entergy Arkansas is reaching out to major companies around the world to put Arkansas on the top of their lists for new facilities. Then we work with them to make sure we have the infrastructure they need to power their business – adding more customers to share costs and putting more Arkansans to work.

4. Investing in sustainable communities. The health of our local communities drives our quality of life as a state. Training, education and infrastructure are vital not only for economic development, but also for building a stable society for generations to come. We’re committed to helping our state grow, strengthening communities, supporting non-profits and improving education.

To learn more, visit EntergyArkansas.com.

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Industry: Biomass in local, state and federal courts across the South against Bennett and Tarrant. To date, neither man has paid one cent on any of those judgments or spent a day in jail. Despite such bad actors, Tennille said Arkansas economic development recruiters are now a lot wiser and better equipped to check financial credentials and conduct due diligence inquiries on business prospects. “Over time, we got a lot smarter and better,” Tennille said. “The snake oil types have gotten up and left because they believe there is a better scam out there somewhere. At the beginning of the gold rush, there were quite a few shaky characters floating out there in the world.” EUROPEAN MARKET POISED FOR GROWTH Now, Tennille said, Arkansas is poised to become a big player in the biomass sector as the wood pellet market takes off in Europe. According to the U.S. Energy Information Administration, wood pellet exports from the U.S. nearly doubled last year, from 1.6 million short tons (approximately 22 trillion Btu) in 2012 to 3.2 million short tons in 2013. More than 98% of these exports were delivered to Europe, and 99% originated from ports in the southeastern and lower Mid-Atlantic regions of the country. In the United Kingdom, the EIA said, wood pellet imports from all sources have grown from near zero in 2009 to more than 3.5 million short tons in 2013. Because of the United Kingdom’s Renewables Obligation program, the operators of several large coal-fired power plants have either retrofitted existing units to co-fire biomass wood pellets with coal or have converted to 100% biomass. Another principal driver in market activity is the European Commission’s 2020 climate and energy package, binding legislation enacted in 2009 that implements the European Union’s 20-20-20 targets. Those targets include reducing EU greenhouse gas emissions by 20% from 1990 levels, increasing the renewable portion of EU energy consumption by 20%, and to improve EU energy efficiency by 20%, the EIA said. For instance, the Drax power plant in

North Yorkshire, England, the largest coal-fired power plant in the U.K., is in the process of converting half of its six generating units to run solely on wood pellets. Highland officials have said publicly that their Arkansas plant will primarily focus on meeting the demand they are experiencing from the U.K. and other international markets that need pellet suppliers for the conversion of their coalfired power plants to sustainable biomassfired plants. Highland’s fiber supply is fully contracted for 10 years, officials said. Zilkha spokesman Oheuri also said the Houston-based wood pellet manufacturer has commitments from customers to purchase the company’s black pellets, “and have sold test quantities in Europe and other markets.” “Our patented … (black) pellet is the attractive option because it shares some of the same qualities as coal,” he said. “The shared qualities between our product and coal reduce or remove the need for expensive plant retrofits when switching to our fuel.” Tennille also cited the fact that the growth of U.S. wood pellet exports has been concentrated in southeastern states, which has built-in advantages in terms of abundant material supply and relatively low shipping costs to Europe. “Transportation cost is the largest part of the total cost of wood pellets,” he said. And according to the Arkansas Biomass Resource Assessment, a study commissioned by the Arkansas Energy Office in 2008, the state has “an excellent biomass resource potential” with an estimated 19.8 billion kilowatts (kwh) of electricity that could be generated using renewable biomass fuels in Arkansas. “This is enough electricity to fully supply the annual needs of 1,979,000 average homes, or 150 percent of the residential electricity use in Arkansas,” the report says. Arkansas’ biomass resource supply figures are based on estimates for five general categories of biomass: urban, mill, forest and agricultural residues, and energy crops. Of these potential biomass supplies and the quantities cited below, most forest and

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

agriculture residues and energy crops are not presently economic for energy use, the report says. However, the Highland and Zilkha Biomass projects have changed that premise. Both companies say they intend to make use of Arkansas’ ample forest residues, which include unused logging leftovers, imperfect commercial trees, dead wood and other non-commercial trees that need to be thinned from crowded, unhealthy, fireprone forests. According to the state’s biomass study, the estimated supply of forest residues for Arkansas is more than 1.7 million dry tons per year. And what excites Tennille is that he believes that sometime in the near future, the domestic market will turn around and wood pellet energy generation will become commercially viable in the U.S. But that is a big dream. Today, biomass has played a relatively small role in terms of the overall U.S. energy picture, supplying 3.2 quadrillion Btu of energy out of a total of 98.5 quadrillion Btu in 2000. And the EIA projects that biomass will generate 15.3 billion kilowatt hours of electricity by 2020, or only 0.3 percent of the projected 5,476 billion kilowatt hours of total generation. But the optimistic Tennille says he believes that the new projects in south Arkansas represent a great opportunity for the state to be at the forefront of an entirely new energy growth sector, much like the financial boon that the state experienced over the last decade with the development of the Fayetteville Shale. “We know the forests in Arkansas are a tremendous renewable resource. But the question is ‘How do we make sure we are engaged in the highest value-added business? At some point in the future, there will be higher value opportunities for that resource,” he said. “We’ve got a glut of timber in south Arkansas, and everybody in the forest and paper product industry on the planet knows where every tree is and knows where the market is headed,” Tennille continued. “So, the wolves have been looking at Arkansas and our natural resources. If this works, they are coming to Arkansas because we got plenty of trees.”

Commentary

U.S. Needs to Make All-Out Effort To Achieve Energy Independence By Gen. Wesley K. Clark Gen. Wesley K. Clark

SIS is ripping apart the Mideast; Russia has invaded and seized part of Ukraine; China is squeezing the Hong Kong pro-democracy demonstrators; and Ebola is spreading beyond West Africa. Foreign affairs are intruding every day in the headlines and lives of Americans. And each day the same question is asked: what is our strategy? That’s why I wrote “Don’t Wait for the Next War.” We need to help raise the dialogue about strategy – America’s strategy. You see, in the past we Americans have typically waited until war comes before we set aside our private interests and political disagreements and pull together. That’s what happened in both World War I and World War II. Ike tried to get us to pull together to win the Cold War against the Soviets; that mostly worked, although the partisan bickering never really stopped. But today we can’t wait for the next war. Our nation faces very significant long-term challenges that impact us at home. Cumulatively, if we don’t deal with these challenges effectively, they could destroy America as we know it. These challenges have to be worked now, and on a continuing basis. Terrorism, Cyber Security, financial system risks, the ascent of China, and climate change are problems that defy easy solution. Each of them requires working with Allies and friends overseas. None can be turned over to the “free market,” both government and the private sector have to do their part. We can’t buy our way out by building submarines or ballistic missiles – but we do need funds, technologies and resources to

cope with these challenges. And resolving these issues will take many, many years of continual effort. Meanwhile we have huge national debt, bitterly partisan politics, and some Americans and many overseas are losing some of their faith in the United States, our government, our values and our people. But there is a way out – going all out to achieve energy independence. As it is, each year we spend about $200 billion to $300 billion to import oil for transportation fuel.

– Gen. Wesley K. Clark

challenges. The truth is, we have plenty of oil, natural gas and biofuels right here in America to make us energy independent – we just have to use them. And at the same time, we need to strengthen our environmental safeguards and find ways to reduce greenhouse gases released to the atmosphere. Then, with our energy strength we can help craft the strategy to maintain America’s global leadership. We have to strengthen ties to Europe. They’re 500 million people, and those who most closely share our values. We have to work with Europe to manage China’s ascent. And to do this, we need to strengthen NATO and provide greater reassurance to our allies in Eastern Europe. There are a lot of other efforts needed – and I outline many of them in my book. But with regard to ISIS: it wasn’t our problem, but now it is. We need to work with our partners in the region to stiffen their resolve, using our airpower, and enabling the moderate Syrian opposition, the Kurds, Iraqis and Turks to handle the challenges they face. It’s true, boots on the ground are required. Hopefully, it won’t be American boots. We need a better, longerrange strategy, than just throwing our troops into a crisis.

If we could keep that huge sum of money in the American economy, we might double the U.S. gross domestic product growth rate, create millions of new jobs, pay down the debt and reduce some of the anger in American politics. We would have the resources and teamwork we need to face the big

Gen. Wesley K. Clark, the former supreme commander of NATO, led alliance military forces in the Kosovo war in 1999. He is a senior fellow at the Burkle Center for International Relations at UCLA and author, most recently, of “Don’t Wait for the Next War: A Strategy for American Growth and Global Leadership.”

“The truth is, we have plenty of oil, natural gas and biofuels right here in America to make us energy independent – we just have to use them.”

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Hometown, Arkansas

Hot Springs Mountain Tower

Magic Springs Water & Theme Park

QuaPaw Bath & Spa on Bathhouse Row

Hot Springs Is Heating Up PHOTOS COURTESY OF ARKANSASMEDIAROOM AND HOT SPRINGS CHAMBER

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

Promenade at Hot Springs National Park

Oaklawn

Gaming at Oaklawn

Crystal Falls

By Steve Brawner

Along with popular attractions, the city sports a diverse economy and a surprisingly large manufacturing base. www.talkbusiness.net

Craighead County courthouse veterans memorial

Hometown: Hot Springs During the first part of the 20th century, Hot Springs was one of the nation’s premiere tourist destinations for both heroes and villains. It was an early home of Major League Baseball spring training, a fact commemorated by a series of 28 historical markers in the city. Babe Ruth played there, and so did Ty Cobb and Hank Aaron. Meanwhile, gangsters such as Al Capone

traveled to the city to gamble in illegal casinos and enjoy the city’s other attractions. Eventually, spring training moved to Arizona and Florida, and the casinos were shut down. With its beautiful lakes and Oaklawn racing, Hot Springs remained one of Arkansas’ most important tourist destinations. But the city lost some of its energy. A strategic plan prepared for the city

by a consulting firm in 2011 sat mostly unread on a shelf. Garland County’s employment shrunk .22% in 2013, ranking it 326th among 428 metropolitan statistical areas nationally for its moving average job growth, according to an Arizona State University analysis of U.S. Bureau of Labor Statistics. “No depression. No recession. Just kind

Lake Catherine

Lake Catherine State Park Suspension Bridge

Lake Hamilton Lake Ouachita Turtle Cove Spa Lake DeGray

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

of slowly went to sleep,â&#x20AC;? is how Jim Fram, Hot Springs Chamber of Commerce CEO, described it. REVITALIZATION EFFORTS Nothing better symbolized the cityâ&#x20AC;&#x2122;s direction than the Majestic Hotel. An attraction during the cityâ&#x20AC;&#x2122;s heyday, it had stood empty since 2006 â&#x20AC;&#x201C; a monument to the cityâ&#x20AC;&#x2122;s past. Townsfolk figured somebody would fix it up someday. Then, on Feb. 27, it burned. The fire jolted the city. A Hot Springs Game Plan Task Force released a report June 4 that largely validated the 2011 strategic plan and included a list of goals and recommendations, including a tax revenue source to pay for voter-approved downtown infrastructure projects, and developing the area around former President Bill Clintonâ&#x20AC;&#x2122;s boyhood home on Park Avenue. â&#x20AC;&#x153;I think the Majestic fire was somebody grabbing the shoulders and shaking it and saying, â&#x20AC;&#x2DC;We need to do some things here,â&#x20AC;&#x2122;â&#x20AC;? Fram said. Much of the cityâ&#x20AC;&#x2122;s efforts are focused on downtown, whose most important street, Central Avenue, recently was named one of 10 Great Streets in America by the American Planning Association. Downtown revitalization efforts began prior to the Majestic Hotel fire and have since accelerated. The Thompson Building is being developed into a boutique hotel with upscale retail establishments. Meanwhile, a new state fire code resulted in the creation of the Thermal Basin Fire District, where downtown property owners are being required to install sprinklers in upper floors. Previously, only bottom floors were required to meet code as long as top floors were sealed off, which kept most of the buildings on Central Avenue occupied but resulted in a lot of wasted upper floor space â&#x20AC;&#x201C; as well as creating a fire hazard near a national forest. These expensive investments have led some property owners to sell their buildings. New investors have plans, including downtown residential apartments that City Manager David Watkins said will attract young people.

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Hometown: Hot Springs “This is a place that if we market it properly,” he said, “and we amplify our quality-of-life attributes, this is a place where I think kids move. ... My gosh, if I could have a loft in downtown Hot Springs, all the funkiness that downtown offers, all the hiking and biking and rafting and kayaking and boating, hunting, fishing, I mean, it’s all right here.”

Created by President Andrew Jackson’s signature in 1832, it’s America’s oldest continuously operating national park. It derives its name from the heating of rainfall as it sinks a mile into the earth and then rises to the base of Hot Springs Mountain. Believed to possess healing properties, the hot spring water led to the construction

of eight bathhouse facilities on Bathhouse Row between 1892 and 1923. Two of the facilities, the Buckstaff and the Quapaw, still function as bathhouses, while a third, the Hale Bathhouse, is being developed by Pat McCabe into a bed and breakfast with a dozen rooms with tubs fed by the spring water.

Wax Museum

NUMEROUS ATTRACTIONS Tourism, the foundation of the city’s economy, is seeing an uptick. According to Steve Arrison, CEO of Visit Hot Springs, August collections of advertising and promotion taxes were up almost 4.43% from the previous year. Texas, particularly the Dallas Metroplex, is a primary market. “Look at the topography, the beautiful lakes. Gosh, we have everything that Texas doesn’t have,” Arrison said. Many visitors are coming to Hot Springs National Park, which extends to the east from the center of Central Avenue and wraps around the northern part of the city.

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Gangster Museum

Numerous other outdoor attractions bring visitors to the area. The Ouachita National Forest begins west of the city and spreads into Oklahoma. Then there are the city’s lakes: rustic Lake Ouachita outside of town, Lake Hamilton on the city’s south side and Lake Catherine between Malvern and Hot Springs. Lake Hamilton is surrounded by development, including restaurants, condominiums and the upscale Atrium, which Fram described as “the Ritz Carlton of assisted living centers.” Fram himself owns a house on the lake and said it’s one of the best parts of living in Hot Springs. “Lake Hamilton is a small enough lake that you don’t get the big cigarette boats and all the splash and wave of some of the larger lakes, but it’s big enough that you can water ski if you want to,” he said. “You can enjoy the water. There’s a dozen places that I can get on my pontoon boat [and] take the family out to eat by water. I can go out in my back yard and fish. I can go out in my back yard and swim in the lake.” Oaklawn Racing and Gaming attracts about 2 million visitors a year, about a third of them during racing season from midJanuary through mid-April – otherwise a dead period for tourism. The park employs 1,500 during racing season, 500 the rest of the year and, according to Eric Jackson, general manager, had a total economic impact of $300 million in 2012. The park, which has been racing horses since 1905, began offering “instant horse racing” gaming as an option in 2000 and later added “electronic games of skill.” About $60 million in recent casino construction projects, one in 2010 and one that will be completed Nov. 7, will give the facility the capacity for 1,500 player positions. Jackson said gaming more than doubled the park’s visitors and has allowed it to increase its purse money so that, “During the time of year that we race, it’s the top racing program in America, and it’s become a key racing program for the Kentucky Derby and the Triple Crown and even Horse of the Year.” Other tourist attractions? Magic Springs and Crystal Falls, the city’s theme and water park, had ticket sales of 369,000 in 2013 – down a little from 2012,

It’s never easy to make the best even better. But new leadership will help us do just that. President Bill Tsutsui comes to Hendrix from SMU in Dallas, where he was Dean of Dedman College of Humanities & Sciences. After earning degrees at Harvard, Oxford, and Princeton universities, Bill built a 20-year track record of innovation and success as a teacher, scholar, and administrator at the University of Kansas and at SMU. We’ve combined a great leader with a world-class faculty and outstanding students from all over the world. That’s a win/win/win for Arkansas.

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Hometown: Hot Springs but still enough to pay $3.6 million per year in local wages, according to a report by the BaxStarr Consulting Group. The Mid-America Science Museum is undergoing a $7.8 million renovation with a grant from the Donald W. Reynolds Foundation that will create a new set of exhibits meant to explain the interplay between science and everyday life. The Gangster Museum of America commemorates the era when bad guys descended on the city as a vacation spot. The Hot Springs Documentary Film Festival attracts thousands to a 10-day event in October. The University of Arkansas’ Garvan Woodland Gardens offers beautiful botanical landscapes. The city and nearby Hot Springs Village and Glenwood together offer a dozen championship golf courses. In 2013, the Hot Springs Convention Center hosted 266 events with 606 event days, according

to the Baxstarr report. The attached Bank of the Ozarks Arena hosts sporting events, including the state high school basketball championships. Central Avenue, Oaklawn, the lakes – everyone in Arkansas knows about those aspects of Hot Springs. But the city actually has a diverse economy and a surprisingly large manufacturing base, particularly in aerospace maintenance and manufacturing. Employers include Triumph Group, which has three facilities in the city, and AAR, which performs all the heavy maintenance on Delta’s regional fleet. There are only two places in America where passports are produced, and one of them, Arkansas Passport Center, is in Hot Springs. Weyerhaeuser’s regional headquarters is in Hot Springs, as is the headquarters of Mountain Valley Spring Water. With so many retirees in Hot Springs and nearby Hot Springs Village, the city is

Garvan Gardens

Anthony Chapel

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

becoming a medical hub. A town of less than 40,000 is home to two major hospital facilities – CHI St. Vincent Hot Springs, which employs 1,800, and National Park Medical Center, which employs 661. Moving forward, the city will have no choice but to grow small employers. The city’s industrial park, Mid-America Industrial Park, is full, and there’s nowhere to build another one. On the plus side, Fram said, “If you live by 2,000 jobs at a time, you die by 2,000 jobs at a time, and I think we’ll have a much more diverse economy and a much more stable economy if we’re siting jobs that are in the 10 employees to 15 employees range.” EDUCATIONAL OPPORTUNITIES Those jobs potentially could spring from Hot Springs’ growing educational opportunities. The city is home to the Arkansas School for Mathematics, Sciences and the Garvan Gardens

Convention Center

Motorcyclists on Highway 7

Arts, which educates about 200 of the state’s elite high school students in a residential facility. National Park Community College educates 3,000 credit students earning associates’ degrees and technical certificates. Non-credit and continuing education classes also are offered. The school’s University in the Park program lets students complete four-year degree programs in a variety of disciplines on campus in association with five of the state’s four-year universities. Henderson State University is offering business and education classes on the NPCC campus and has leased the Landmark Building in downtown Hot Springs, where upper-level classes will be offered once the building has been renovated. Hot Springs does face infrastructure challenges and opportunities. According to Watkins, the city manager, the water system has a maximum capacity of 25 million gallons a day when its two plants, both on the north side, are running perfectly. That’s more than adequate for the population but low for tourist season. The city hit 80% of capacity 55 times during the dry summer of 2012 – a “red flag,” he said. The city hopes a new plant will be in place on the south side by Jan. 1, 2018. As part of the Connecting Arkansas Program approved by Arkansas voters in 2012, Highway 70 from Interstate 30 to the Martin Luther King Expressway on the city’s east side will be expanded to five lanes. Now the city hopes to extend the expressway to Hot Springs Village residents, who currently must travel a winding, congested path in order to reach Hot Springs’ amenities and medical facilities. Another need is better broadband connectivity. While Hot Springs is a major tourist attraction, it’s first and foremost a hometown. The convention center not only attracts meetings and conventions, but, according to Mayor Ruth Carney, it’s also a place where about 1,000 people gather monthly for a community prayer service. “It’s just a good place to live,” she said. “It has that feeling. You go into stores, people talk to you, they’re friendly. It has a good warm family feeling most of the places you go.”

1912 Red Sox at the Buckstaff Baths Baseball player Larry Doby gets a rubdown

Baseball Trail Gets Preservation Award Hot Springs’ Historic Baseball Trail, a series of 28 historical markers throughout the city commemorating it as the Birthplace of Major League Baseball Spring Training, is being awarded the 2014 Award for Outstanding Achievement in Preservation Education by the Historic Preservation Alliance of Arkansas. The award will be presented during a banquet in January. More than 45% of the inductees in the Major League Baseball Hall of Fame either played in or were associated with Hot Springs during its heyday, according to a release from Visit Hot Springs, the city’s convention and visitors bureau. Babe Ruth played there to get ready for the season, and so did Ty Cobb, Stan Musial, Hank Aaron and many other legends. A documentary film, “The First Boys of Spring,” is being filmed by Larry Foley, chairman of the Journalism Department at the University of Arkansas at Fayetteville and a multiple Emmy Award winner. The film will make its debut during the 2015 Hot Springs Documentary Film Festival. – Steve Brawner Arlington Resort Hotel & Spa

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TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

Commentary

State Government Needs Open Data Investment A truly collaborative method of solving problems could be more readily achieved when relevant data is standardized, accessible and viewed through a new lens. By Janet Harris

n the ongoing conversation about the workforce dilemma in Arkansas, one thing policy leaders and thought leaders tend to agree upon is that we do not have enough data to understand why the labor force is shrinking or what we can do to bridge the workforce skills gap Arkansas is currently experiencing. Yet that data does exist. It exists through information collected by numerous government organizations charged with educating and engaging our workforce, information that might provide more insightful policy analysis in the workforce dilemma – if only state government and business leaders had access to open data. For example, the Department of Workforce Services keeps data sets on labor market information and the numbers of unemployed Arkansans. The agency also collects job seeker demographics and data on skills of the unemployed. The Association of Two-Year Colleges keeps data on workforce training programs offered by their member institutions, as well as information on partnerships with the business community that help train students for jobs after graduation. The Arkansas Economic Development Commission collects information about training and educational needs of the business community. Somewhere inside all of this data may be answers to policy questions plaguing workforce development in the 21st century. The problem is that these data sets all have something in common: They are not readily accessible and not connected in any meaningful way. OPEN DATA PROJECTS The problem is that most state government organizations are data silos. Individual agencies are responsible for collecting and maintaining their own data, but lack the resources or authority to share that data

Janet Harris

with other agencies and outside groups that share their mission. One solution to consider is an open data initiative. States like Maryland and Oklahoma are leading the way in open data projects by requiring their agencies to put public information online in a standardized, machine-readable format. These open data projects are organized as portals for public information, where raw data and statistics are available for anyone – not just government officials – to download and analyze. While government should continue responsible stewardship of the data it collects and owns, the next logical step is to share that data with the community, and the reason is simple: The agency collecting the data is not necessarily the agency with the expertise to develop applications or analyses that consumers need, particularly in cases like the workforce dilemma, where industry needs are evolving faster than bureaucracy can respond. For another example, consider the recent decision by Yelp to include government restaurant inspection scores in its popular restaurant rating app. While consumers probably wouldn’t go to a government site to check out inspection data before dining, that same information would be easily accessible within Yelp’s application – provided government made that data available in a machine-readable format, which Arkansas currently does not. While Arkansas has made strides in data transparency with regards to government spending, there is no executive requirement for open data in other policy areas, and few resources are available for agency leaders to undertake an open data project on their own. COLLABORATION, PLANNING There are good reasons why public managers shouldn’t go it alone. Executing an

open data plan requires collaboration and careful planning. Records containing sensitive information otherwise not subject to public disclosure must be exempt. Thoughtful consideration must be given to the value and integrity of information available through an open data portal, meaning agencies may have to make investments to upgrade software programs or make improvements to data collection procedures. Despite the challenge, open data allows research institutions, industries, application entrepreneurs and even individuals themselves to collaborate on decision-making about policy issues. In addition to the workforce dilemma, consider the possibility of examining readily available data on school performance against geographic data on public health. What might those data sets show? We currently do not know the answer because again, most of these data sets are not easily accessible. Perhaps a policy issue like the workforce dilemma – one that is so critical to the well-being and future of our state – is fertile ground for an open data pilot project. Bringing together individuals and organizations to discuss the concept of open data and to view workforce data through a new lens could spur action at the state level to consider an investment in a long-term open data strategy for state government.It will take a concerted effort among state leaders to realize such a vision, and as owners of the valuable asset that is government information, it will be up to them to take the first step. Janet Harris serves as Deputy Auditor of State under Arkansas State Auditor Charlie Daniels and has served in state government administration for the past 16 years.

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Regional: Northwest Arkansas

Pickup Grocery

It’s all about shopper convenience as Wal-Mart tests new formats. By Kim Souza

COURTESY OF THE CITY WIRE

Shoppers rule. Just ask retail behemoth Wal-Mart Stores why they are testing Pickup Grocery in Bentonville and Denver or why Sam’s Club is piloting Click & Collect in Bentonville. And don’t forget the standalone tube stations and fuel station pickups soon coming to their ASDA business in the U.K. Consumers today have a wide variety of choices in not only where to shop, but how to shop. The retailer who provides the most options with the greatest convenience wins the day. It’s a dynamic in which the mega-giant retailer with the most stores and most square feet could lose to a retailer with nothing more than a website and a few warehouses. Wal-Mart would be the first to admit that testing multiple convenience formats and delivery options is not easy as the whole world eagerly watches and waits to pass judgment. That said, new Walmart U.S. CEO Greg Foran comes to his job with some interesting history. He oversaw an online grocery business in New Zealand as far back as the 1990s. He most recently competed head-to-head in China against online retail giant Alibaba. EVOLVING FORMATS Judith McKenna, the new chief development officer at Walmart U.S., also is steeped in online grocery experience. She spent years at ASDA in the United Kingdom, arguably one of the largest and oldest e-commerce grocery ventures in the world. “Our formats are evolving. They have to because our customers are digitally connected like never before,” McKenna said recently at the opening of the Bentonville Walmart Pickup Grocery format. The 11,000-square-foot stand alone Walmart Pickup Grocery format is an iteration of “dark store” distribution channels used at ASDA, as is the in-store pickup grocery option being tested in 36 Denver Wal-Mart locations over the past year.

“We are really encouraged by the tests in pickup,” McKenna said, adding that 80% of Denver users give the service positive marks. “The pilot [Walmart] Pickup Grocery in Bentonville is also winning favor with young moms who appreciate the convenience over grocery shopping with small children.” Wal-Mart management has repeatedly said pickup options that cater to shoppers retrieving the merchandise at their own convenience while never having to unbuckle their seatbelt makes sense in many areas across the country. They are testing that belief in urban Denver and the relatively rural Bentonville. Wal-Mart declined to provide userfrequency details on the Bentonville test, saying it’s too early as the site just opened to the public on Sept. 29. McKenna said Wal-Mart does not know where this Bentonville test will lead. For now they are collecting feedback and point-of-sales data on the operations. PICKUP FEEDBACK Early responses on social media feeds, from users trying the Bentonville test, range from “it’s awesome” to “it was a disaster.” Amanda Vest of Rogers said she has used the pickup service several times and chooses to do so because it’s much easier than trying to shop with kids in tow. “I do not like having to take my kids with me to the grocery store. The service and selection at this format are fantastic,” Vest noted in a Twitter feed. Ragan Hensley of Fayetteville, also mom to a small child, noted in her Facebook post that her one-time experience was “a disaster,” and she’s “too scared to try again anytime soon.” Hensley said two minutes before her scheduled pickup time she received a call asking her to reschedule online or cancel the order. Call support then told her she would have to resubmit the entire order before she could adjust the pickup time.

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

“I ended up frustrated and hungry. It would have been easier to go to Store 100 [Bentonville Supercenter]. There was lots of functionality missing from the site for managing orders,” Hensley shared. Other observations of the Pickup Grocery shopping experience included: • same low prices as the nearby supercenter; • limited assortment of flavors in certain dog food brands and canned soda options; • substitution of “Great Value” brand when the item ordered was not available; and • complimentary dog treats and a blemished apple in the order. Wal-Mart continues to ask shoppers in these testing regions to use the facility and provide honest feedback, especially when things need to be fixed or adjusted. The retailer said it is still controlling the number of users it allows into the program, so that expectations can be met and problems worked out at the same time. McKenna said the retailer is willing to test many ideas. Some, like Savings Catcher, will be adopted and others, like the tethering of small stores to supercenters for online fulfillment, or the “Scan and Go” pay option tested last year, will be shelved. PIONEERING MOVES Retail experts like Carol Spieckerman, CEO of newmarketbuilders in Bentonville, applaud Wal-Mart for stepping out to test new formats, apps and services with the general public. There is a risk of negative public perception while the retailer works to press out the wrinkles. She said the alternative is sitting on the sidelines, and that’s a not a place retailers for the future want to be. Wal-Mart said the pickup warehouse format in Bentonville could have been built anywhere, but it purposely chose its own backyard so it could constantly tweak, monitor and refine the operation.

“Wal-Mart is testing this format because it is a vehicle (literally) for next-stage scale-building and a complement to its small format strategy,” Spieckerman said. “Wal-Mart has everything to gain as it offers yet another option for convenience-starved customers and without the overhead of its other physical formats.” She said it offers more than convenience for parents with small children and the elderly because it also allows Wal-Mart to make the most of its digital platform. It’s a chance for Wal-Mart to acclimate more customers to online grocery shopping while uncovering a treasure trove of customer data from search history and shopping habits. “It’s a pioneering move in the U.S. and that alone has the potential to bring new customers into Wal-Mart’s physical and digital ecosystem,” Spieckerman said. MARKET STRENGTH, SIZE Wal-Mart said the pickup option is not a substitute for larger store stock-up trips or a replacement for store-based click and collect or home delivery, but rather a complement to them. Spieckerman said retailers who offer a full portfolio of delivery and pickup options will make the most of their physical scale, their one true advantage over Amazon. She said retailers must also mitigate “jumping off ” points with customers who define convenience differently based on needs, categories and even the time of day. Wal-Mart and other retailers know that time remains to figure out what works and what doesn’t, but the urgency to get the answers sooner than later is fueled by a hyper competitive retail space and technology players like Google who have jumped in the game. The online grocery market, worth $6 billion annually, is projected to grow at 9.5% a year between 2012 and 2017, according to the market research firm IBISWorld. That’s a drop in the bucket compared to $156 billion Wal-Mart Stores rang up in U.S. grocery sales last year. Online sales overall at Wal-Mart last year were $10 billion out of $473 billion in global sales revenue. CLICK AND COLLECT POSSIBILITIES Spieckerman said the mass adoption of mobile technology is also reinforcing the click and collect model because fewer consumers are tethered to desktop computers. “It is actually a more convenient option for desirable demographics such as busy, constantly-mobile moms than even home

delivery,” she said of the ability to order products online and then go to a store to pick them up. She said busy parents drop children off at school, run errands and attend after-school events. During various wait time throughout the day, these customers can pull out a phone and place an order for groceries, including ready-to-eat options for dinner and then chose a pickup window that coincides with their routes. “There’s no fighting for parking spaces or navigating massive parking lots or stores, yet the assortments are familiar because the items are most likely being pulled from a nearby store that the customer frequents. Click and collect is the ultimate in localization from that perspective – it is an extension of the local store, not a replacement for it,” Spieckerman said. HOME DELIVERY LESSONS Home delivery, which is being tested by Wal-Mart in Denver and San Jose, Calif., is showing promise in densely populated areas. But Wal-Mart has said it’s more excited about the pickup stations, whether that’s in-store via a drive-through window or at designated stand-alone formats. The site in Bentonville is the only stand-alone

depot for grocery orders being tested by Wal-Mart in the U.S. But David Cheesewright, CEO of Walmart International, said Wal-Mart also has the benefit of tests performed and put into action by ASDA, the largest online grocery chain in the world. Wal-Mart also has growing online grocery businesses in Mexico and Canada that it can look to for guidance. Cheesewright said standalone fuel stations and tube stations locations near mass transit centers are being tested in the U.K. by ASDA, a market already experienced at home delivery. “Click and collect depots are great for retailers because they allow them to have a local presence in neighborhoods that might not otherwise support their brick and mortar stores, they make the most of store inventory from the supplying ‘hub’ store and without the costs associated with picking, packing and shipping an order,” Spieckerman said. She said profitability of these depots are now a relative proposition when considering the potential for Wal-Mart to attract customers to its online platform that otherwise wouldn’t shop in its stores. Wal-Mart is also able to gather valuable data from all who participate.

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Regional: Northwest Arkansas

Northwest Arkansas Leaders Ready to Embark on New Plan for Continued Growth By Talk Business & Politics Staff Four years ago, business and community leaders in Northwest Arkansas put forth a five-year plan to set the region on a path to greater prosperity. Mission nearly accomplished, at least so much so that eyes have turned to developing a three-year plan aimed at building on recent successes. Mike Malone, CEO of the influential Northwest Arkansas Council, said that items outlined in a January 2011 strategic report have either been completed or are “substantially underway.” “It’s time to build the blueprint for what we work on as a region next,” Malone said. The “Greater Northwest Arkansas Development Strategy” report, issued four years ago, called for a variety of investments and initiatives to enhance economic development, education and health care, arts and culture, and quality of life. Building on the powerhouse institutions in the region – Wal-Mart, Tyson Foods, J.B. Hunt and the University of Arkansas – the northwest quadrant of the state set out to lay the foundation for another generation of residents to feed those core economic engines. Some of the January 2011 goals included more physical infrastructure aimed at roads and the regional airport (XNA), a preservation of drinking water and recreational water sources, and community vitality that improved diversity and citizen engagement. The plan also called for increasing educational access and achievement, workforce development, and the support of existing businesses and new business recruitment. Planning for the next three years will

center on similar goals, Malone said. It is likely to emphasize more “human capital” investments, but not at the expense of traditional infrastructure. “As has always been the case in Northwest Arkansas, there will be a focus on physical infrastructure,” he said. “Roads certainly still matter, the airport is critical. But the physical infrastructure also includes the availability of utilities, trails, transit and other elements. It’s an expanded definition to focus on physical infrastructure.”

“More and more as a region, quality of place and amenities matter for both talent and business attraction.” – Mike Malone CEO, Northwest Arkansas Council

“Certainly, the human capital needs of our large, growing companies will continue to be a focus, so I think there will be some recommendations there,” Malone added. “More and more as a region, quality of place and amenities matter for both talent and business attraction. We’re spending more time and there’s a lot more effort on what we’re calling the ‘experience infrastructure.’ There will be some elements of that in the plan. Making sure we have great downtowns, making sure we have arts, culture and outdoor recreation offerings that professionals and our residents are looking for.”

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

At a “State of the Northwest Arkansas Region” conference in Springdale earlier in the fall, Malone and others reported on economic indicators that are differentiating the area from other parts of Arkansas and counterparts in other states. Kathy Deck, director of the UA Walton College Center for Business and Economic Research, pointed to several statistics that have seen improvement in the last year. Population has grown by 1.9% to 491,966 in the region. GDP has lifted by 5.6% in the last five years to $22.59 billion. The region’s per capita personal income and annual wages have also risen, which has led to a small decline – 0.4% – in the area’s poverty rate, which stands at 16.8%. Unemployment in the metro region remains the lowest in the state at 4.9% in August, but employment figures have been rockier and more unpredictable. The size of the Northwest Arkansas regional workforce during August was estimated at 232,136, down from the 233,372 in July, and 0.82% below the 234,076 during August 2013. “What we’re seeing right now is that employment growth is still good, but not quite as good as it has been in Northwest Arkansas. We’re seeing that the labor force is actually shrinking year over year, which doesn’t jive with our sales tax revenues, it doesn’t jive with our building permit information, it doesn’t jive with new utility hook-ups,” Deck said. And the answer for that trend is elusive, for now. “We’re still searching for a reason that the labor force would go in a situation where the employment situation is improving,” she noted.

Regional: Northwest Arkansas

Report: Economic Conditions In Northwest, Fort Smith Stable By Michael Tilley

COURTESY OF THE CITY WIRE

Arkansas’ three largest metro areas showed either improvements or stability during the second quarter of 2014 compared to the same period in 2013, according to The Compass Report’s analysis of second quarter data. The quarterly Compass Report is managed by The City Wire. The report is the only independent analysis of economic conditions in Arkansas’ three largest metro areas. Compared to the second quarter of 2013, economic conditions in Northwest Arkansas and the Fort Smith metro area were stable (no change), and conditions in Central Arkansas improved. To underscore the impact of the three largest metro areas, for June of this year the unemployment rate for the rest of the state was 7.4%, down 1.7% from June 2013. The statewide unemployment rate with the three largest metros added back in was 6.3%, down 1.4% June-on-June. NORTHWEST ARKANSAS Employment gains and building activity continued from the first quarter into the second quarter of 2014 for Northwest Arkansas. The second quarter 2014 grade of B was better than the B- in the first quarter of 2014 and unchanged compared to the second quarter of 2013. The grade of B indicates an economy that is growing. Non-farm employment in the region was 216,900 in June, well ahead of the 213,700 in June 2013. Building permit values in the region totaled $181.395 million in the second quarter, up over the $138.505 million in the second quarter of 2013. Construction sector employment was 8,900 in June, up compared to 8,400 in June 2013.

Despite the growth, Compass Report Economist Jeff Collins said the pace of growth in Northwest Arkansas is slowing. “The Northwest Arkansas regional economy slowed noticably in the first half of the year. In the last two years the local growth rate exceeded 2% in all but seven months. Five of the seven have occurred since January,” Collins said. FORT SMITH REGION The Compass Report for the Fort Smith area posted a C grade for the second quarter, unchanged compared to the first quarter of 2014 and unchanged compared to the second quarter of 2013. Non-farm employment in the metro area hit 115,800 in June, down from 116,000 in June 2013. The metro jobless rate fell from 8.2% in June 2013 to 6.4% in June 2014, but the number of employed did not gain. “The regional economy had added employment for six straight months prior to the start of the second quarter. The statistical evidence suggests that the local labor market has stabilized but is clearly not out of the woods,” Collins wrote. An emerging positive was in tax collections. Tax collections in Fort Smith totaled $10.389 million in the second quarter, better than the $9.956 million in the same quarter of 2013. Tax collection numbers, a sign of consumer confidence and spending, have not been positive in recent quarters. Overall, Collins said the Fort Smith metro economy is stable, but possibly struggling.

“Data for the third quarter will be closely examined to determine if the soft second quarter was an anomaly or indicative of a regional economy struggling to regain its footing,” Collins said. CENTRAL ARKANSAS Economic conditions in Central Arkansas, the state’s largest metro area, received a grade of C, an improvement over the first quarter of 2014 and better than the C- in the second quarter of 2013. Improvements in overall employment and a better showing in construction sector jobs helped push the better grade. Nonfarm employment stood at 348,600 in June, better than the 344,400 in June 2013. There were an estimated 17,400 jobs in the region’s construction sector in June, up compared to 16,800 in June 2013. “Given recent job creation data for the Central Arkansas metro, this was a modestly improved showing. By comparison, the Northwest Arkansas regional economy added 3,200 or 1.5 percent while the Fort Smith regional economy was essentially flat June-on-June (-200 jobs) during the same period,” Collins said. Overall, the recent growth in Central Arkansas is not reflective of what is possible in the metro area, according to Collins. “The Central Arkansas regional economy continues to mimic the national economy, growing but at a pace that fails to impress. This is likely due to continued weak national growth and the impact of reduced state and local government spending,” he said. www.talkbusiness.net

Regional: Northeast Arkansas

The Dixie Pig

The Halsell family’s restaurant has been a tasty tradition in Blytheville for years. By Michael Wilkey The Halsell family has sold barbecue in some form or another in Mississippi County for more than 90 years, with Buddy Halsell working at the restaurant for 60 years. Buddy Halsell said the “pig” and “ham” sandwiches sold every day at the Dixie Pig restaurant have kept people coming back year after year. Halsell’s father, Ernest Halsell, started the restaurant in 1923 after moving to Blytheville from Pontotoc, Miss. After trying his hand at several things, Buddy Halsell said his father decided to enter the barbecue business. “He bought a log cabin with a sawdust floor at Main and Division Streets,” Halsell said. “It was called the Rustic Inn. He eventually moved to where Kream Kastle is (on Division Street), then across the street where Pizza Hut is. His barbecue was well-known in the South.” Ernest Halsell eventually sold the business in 1946 to go into farming, his son said. However, the lure and smell of barbecue brought him back. “In 1950, he decided to get back into the barbecue business. He got a building on the land [on North 6th Street] where it is now. In 1954, I was discharged from the military and went to work for him. I’ve been here ever since.” The restaurant, down the street from Blytheville High School, was a happening place in the 1950s and 1960s, Halsell said. “The high school had just opened up and we had three carhops. And the place was hopping,” he said.

PHOTO BY MICHAEL WILKEY

Today, the restaurant gets visitors from people throughout Northeast Arkansas and Southeast Missouri. Halsell said a lot of the customers are former residents of Blytheville. “They come back for something they remember. We got people from Cooter, Mo., Steele, Mo., Manila, Osceola and Leachville. Also, we are pretty well known throughout the country. Memphis claims to be the barbecue capital of the world. I got news for The restaurant on 6th Street in Blytheville is within blocks of the Mississippi County Courthouse and the downtown area.

them. Blytheville is,” Halsell said. The 1948 Blytheville High School graduate, who turns 85 in November, said he gets to the restaurant each day around 8:30 a.m. The work then begins. “We usually put the meat on at 8:30 a.m. and by 3 p.m., it is usually done. We open at 9:30 a.m. for a lot of the coffee drinkers here. We usually start serving about 11 a.m.,” Halsell said.

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

As for cooking, Halsell said the meat is prepared over a hot fire with the heat working its way through the meat. The menu is simple, with the restaurant serving mostly either “pig” or “ham” sandwiches. A 1938 menu still hangs on the wall at the restaurant. A T-bone steak for two people cost $1.50 then, while a sirloin steak was 75 cents and tenderloin was 45 cents. Halsell has gotten a lot of help from his son, Bob Halsell, and his daughter, Becky Westbrook, in running the restaurant. The three have kept on with the family tradition. The restaurant is also a history museum for Blytheville and the Halsell family, with pictures and other items on display. Among the pictures is a photo of another Dixie Pig restaurant. “I had a younger brother, Johnny, who had the Dixie Pig in North Little Rock for many years,” Halsell said. The restaurant also has a “Pig Room” dedicated to Halsell’s favorite sports team, the Arkansas Razorbacks. “I like football,” Halsell said simply. There are several newspaper clippings on display about the 1964 Arkansas Razorbacks football team as well as photos of Blytheville native and football coach Fred Akers and former USC and now Seattle Seahawks head coach Pete Carroll. So, what is Halsell’s secret to longevity? “I have been here for 60 years. This restaurant has been in the family. I will be 85 years in November,” Halsell said. “To do something, you really have to enjoy it.”

PICTURE THIS:

INSTAGRAM CEO NAMED TO WAL-MART’S BOARD

Kevin Systrom is best known as CEO and co-founder of Instagram, the photo-and-video sharing social networking service. But as of Sept. 26, he’s also known as a member of the Board of Directors of Wal-Mart Stores, Inc., of Bentonville. Founded in 2010, Instagram was acquired by Facebook in August 2012. Systrom is currently CEO of Instagram, where he is responsible for its day-to-day operations and has overseen its growth to more than 200 million monthly active accounts. Systrom, an entrepreneur and software engineer, will also serve as a member of Wal-Mart Stores’ Technology and eCommerce Committee and its Compensation, Nominating and Governance Committee. “Kevin’s entrepreneurial background and his technical and digital expertise will be invaluable as we further connect with customers and deploy new capabilities through e-commerce and mobile channels,” Walmart Chairman Rob Walton said. “Walmart is investing in e-commerce capabilities through talent, technology and fulfillment. Kevin’s passion and deep knowledge of social media align with our focus to engage customers through our digital and physical channels.” Systrom, 30, a native of Massachusetts who holds a B.S. in management science and engineering from Stanford, since 2011 has consistently been ranked in lists such as Fortune’s 40-under-40 and TIME’s 100 most influential people. “Walmart has had a profound impact as a global leader in retail,” he said. “It’s an honor to join the Walmart Board and have an opportunity to help provide more convenient and flexible ways for people to shop.”

Kevin Systrom

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Regional: Northeast Arkansas

Walk the Line

Regional tourism is bearing fruit in Northeast Arkansas. By Michael Wilkey Northeast Arkansas has a lot going for it, especially when it comes to tourism and the history of the area, a pair of area development officials told a state legislative committee earlier this fall. John Faulkner, with the Lawrence Group, and East Arkansas Planning and Development District Executive Director Melissa Rivers spoke to the state House and Senate Agriculture, Forestry and Economic Development committees during a meeting at Arkansas State University. Rivers told legislators about a 2012 report from the Arkansas Department of Parks and Tourism, noting tourism has a $480 million impact on the state’s economy. Locally, people have an opportunity to visit several places like the Johnny Cash Boyhood Home in Dyess, the HemingwayPfeiffer Museum and Educational Center in Piggott and the agricultural history at Wilson, Rivers said. Faulkner is working with Missouri-based financier Gaylon Lawrence on a plan to revitalize Wilson. Wilson, in Mississippi County, was a company town named after the Wilson family. The family had many ties to agriculture in Mississippi County as well as

PHOTOS COURTESY OF ARKANSAS STATE UNIVERSITY

Arkansas State University, going back nearly 100 years. The family sold its holdings to Lawrence in 2010 for a reported $150 million. Faulkner said the city’s café reopened this year after being closed. Other plans call for the Hampson Archeological Museum State Park to be moved to Wilson, building 30 rooms for lodging in a building on the town square, opening a private school and talking to visitors about the agricultural roots of the town. In the interim, officials have worked with AT&T to get faster bandwidth in Wilson as well as offering free WiFi to residents and visitors alike, Faulkner said. Faulkner said the museum, which is now located outside the town, has pottery and ruins from the Nodena settlement that were discovered in the 1950s. Faulkner said he believes the town’s history, as well as its present, can bring people to the area. “Wilson, it is a great place to tell a story,” Faulkner said. WALK THE LINE Just down Arkansas 14 is the Cash boyhood home. Ruth Hawkins, an official with the Arkansas State University Delta

Johnny Cash Boyhood Home exterior and interior

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

Heritage Program, said the home and the nearby Dyess colony building stay busy. “We have people here every day,” Hawkins said, noting they have received visitors from England, Germany, Norway and Wales in recent weeks. The building, in the center of town, has displays about Cash and the creation of the town in the 1930s. Hawkins said the buildings will not only provide a history lesson, but also will provide a boost to the area economy. Officials anticipate between 30,000 and 50,000 people to visit Dyess each year, pumping about 100 jobs and $10 million a year into the regional economy, Hawkins said. REGIONAL FRUIT Rivers said while the area has benefitted from tourism, the overall region faces many issues. A program, called reNEW East Arkansas, has studied several issues including population losses, housing, infrastructure and health care, for nearly two years in the group’s 12-county area. The counties include Clay, Craighead, Crittenden, Cross, Greene, Lawrence, Lee, Mississippi, Phillips,

Poinsett, Randolph and St. Francis counties. Rivers said only Craighead and Greene counties are projected to have increased population numbers over the next 10 years. However, she said each of the 12 counties are working on issues in a regional approach to try to solve problems. One of those projects involves building a biking/walking trail on the Mississippi River levees north of West Memphis. Rivers said the project is in its preliminary stages and that officials will be working with the National Park Service on the project. Alan McVey, executive director for the ASU Delta Center for Economic Development, said the work done in the region, including towns like Wilson, has begun to bear some proverbial fruit. “What they are doing in Wilson is phenomenal. They had meetings and asked for input,” McVey said.

Hemingway-Pfieffer Museum and Educational Center

Jonesboro Chamber Making Latino Business Outreach By Michael Wilkey Cari White says a series of discussions with Latino business owners was the impetus for a new program that helps to build Latino businesses in the Jonesboro area. A press conference earlier in the fall helped create interest in the project. “There were three or four business owners who came to me and talked about being involved with the chamber,” said White, who is the executive vice president of the Jonesboro Regional Chamber of Commerce. The chamber is sponsoring four events over the next year or so to help build the initiative, White said. A Nov. 4 meeting will discuss ways to get capital through loans and financing, while a Feb. 3 meeting will stress how to reach customers, she said. Other meetings include a May 2015 session on how to secure government and private sector contracts, while a meeting next August will discuss digital marketing and social media. White said the initiative will also be

stressed at the chamber’s Business Expo next April. The several-day event, held at the Arkansas State University Convocation Center, features hundreds of businesses in Jonesboro and Northeast Arkansas and draws several thousand visitors. White said there are now approximately 40 Latino businesses in Jonesboro, ranging from construction and bricklayers to restaurant and housekeeping services. According to the 2010 Census, there are 4,277 Hispanic or Latino residents in Craighead County, with 3,503 living in Jonesboro. The area has also been helped by the creation of a Hispanic Services Center in Jonesboro nearly 15 years ago, White said. “They do such a wonderful job,” White said of the center, which works on personal services like teaching English. “This [our program] is strictly on the professional development side.” Liza Resendiz, a co-owner of Los Arcos

Mexican Restaurant and Store in Jonesboro, says businesses like hers have been benefitted due to the work ethic of Latinos. “They are always willing to work, sometimes 10 and 12 hours a day doing everything,” she said. Resendiz said the store has been in Jonesboro for more than 10 years and recently added on the restaurant, adding, “We want to own the building, but the building is not owned by us,” Resendiz said. “Everything inside is owned by us.” White said chamber officials are looking at Northwest Arkansas as inspiration for the project. “We are 10 years behind Northwest Arkansas,” White said of the work with Latino businesses in Jonesboro. “In about 10 years, we are hopeful that we will be Northwest Arkansas.” People who are interested in the program can contact White at 870-933-5754. www.talkbusiness.net

PHOTO: DOLLARPHOTOCLUB

e h T sas n a k r A

r o b La ool P

TALK BUSINESS & POLITICS | SEPTEMBER/OCTOBER NOVEMBER/DECEMBER2014 2014

Feature

Itâ&#x20AC;&#x2122;s undergoing major changes and migrating from manufacturing toward serviceheavy supersectors. By Wesley Brown

The biggest trend that Arkansasâ&#x20AC;&#x2122; 1.3 million labor pool has undergone over the past decade has been the transition from a goods-producing, blue collar-based workforce to a fast-growing service sector that ranges from highly paid corporate CEOs to fast-food workers making minimum wage. www.talkbusiness.net

Feature: Arkansas Labor Pool At the same time, the service sector is projected to add the lion’s share of Arkansas’ new jobs to the state’s economy over the next 10 years, tallying almost 120,000 of the 135,947 new jobs projected to enter the state’s labor pool by 2022, according to the latest occupational outlook from the Arkansas Department of Workforce Services (DWS). Arkansas economist Greg Kaza, executive director of the Arkansas Policy Foundation, highlighted the fact that the highest growth rate in any of the major industries or socalled “supersectors,” will come from the leisure and hospitality industry, which is projected to grow 20.26% by 2022. That means “there will be more waiters, waitresses and motel employees than manufacturing or information workers,” Kaza said. According to the state’s labor statistics, Arkansas’ manufacturing workforce peaked in 1995 around 250,000 jobs but has been on a long, downhill slide ever since. The manufacturing sector sank to a measly 151,700 jobs in January, a level not seen since Orval Faubus was governor in the early 1960s, according to state labor statistics. Since then, that number has rebounded to 155,700 in August. Still the state’s longterm projections for the blue-collar and goods-producing sector are quite grim, projecting to add only 6,937 jobs by 2022. By then, the service sector is projected to hold more than a million of the state’s 1.43 million workers, while goods-producing jobs will be down to fewer than 224,000 positions. Those key observations and the state’s latest long-term employment outlook were the primary focus of DWS’ recent 71-page Long-Term Industry and Occupational Projections publication, which includes an overview of where the Arkansas labor market may be heading in the near future. The Arkansas survey, which was released shortly after the U.S. 2012-2022 employment outlook in late December, contains information on the growth and decline of every industry and occupation in Arkansas. The job data is also classified by the North American Industry Classification System

that was created to bring consistency and comparability to the classifying of industries and businesses across the U.S., Canada and Mexico. In addition to the decade-long projections, DWS also recently release its 2014 Labor Market and Economic Report, which details the labor market and economic fortunes across the state’s 10 workforce investment areas through the end of 2013. Put together, both reports offer a distinct picture of what Arkansas’ workforce may look like over the next few years and the coming decade. And like the U.S. workforce, the emerging Arkansas labor pool is undergoing major changes that federal labor officials call the “new normal.” For instance, the U.S. labor force is projected to grow 0.5 percent per year from 2012 to 2022, compared with an annual growth rate of 0.7 percent during the decade. That is partly due to the aging baby-boom generation, or workers ages 55 and older, expected to make up more than a quarter of the labor force in 2022. CONTINUING THE TREND What stands out, however, is that projected declines in the labor force participation rates of both men and women are expected to slow labor force growth. The overall labor force participation rate is projected to decline from 63.7 percent in 2012 to 61.6 percent in 2022, continuing the trend from the past decade. That disappearing labor force is not just a national trend. In January, economist Kathy Deck raised the same question in a guest column for Talk Business & Politics entitled “Where Is the Workforce Going?” “The labor force growth (or lack of growth) story is much more dramatic in Arkansas. The Arkansas unemployment rate peaked at 8.0 percent in October 2010, fell to 7.1 percent in December 2012, and has risen again to 7.5 percent as of November 2013,” said Deck, director of the University of Arkansas’ Walton College of Business Center for Business and Economic Research. “So, although the state never had an unemployment problem as severe as the nation’s, the recovery from elevated levels has been tepid.”

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

And although Arkansas’ population increased by 9,545 to almost 3 million residents in 2013, the lukewarm growth in the job market continues to be a major issue, state labor statistics show. For example, the Eastern, North Central, Southeast, Southwest, West Central and Western Arkansas workforce investment areas saw decreasing populations in 2013. That resulted in the state’s labor force and employment decreasing between 2012 and 2013, at 18,100 and 17,600, respectively. Meanwhile, between now and 2015, employment in Arkansas is projected to see modest growth, increasing by 1.45 percent between 2013 and 2015. The servicesproviding industries are expected to add 19,157 new jobs, while goods-producing industries are predicted to lose 430 jobs. The top growing industry supersector for net growth is projected to be professional and business services with a gain of 7,136 jobs. The goods-producing industries could see a net loss of 430 jobs with gains of 343 in construction and losses of 230 in the natural resources and mining supersector and a loss of 543 in manufacturing. Northwest Arkansas’ fast-growing professional and business services supersector was recently highlighted in the highly watched quarterly economic report from the U.S. Department of Commerce. In September, the FayettevilleSpringdale-Rogers area’s professional and business service sector saw the largest economic expansion among the nation’s 381 largest metropolitan areas (MSAs) in 2013, increasing real gross domestic product (GDP) growth by 3.33 percentage points. “This is wonderful news, but it is consistent in what we are seeing in the [Arkansas] labor numbers and consistent with what we have been seeing in one of the key industries in Northwest Arkansas – the growth of the professional and business service sector,” Deck said. Another key trend that Arkansas is seeing along with the rest of the nation is the role health care is playing in the state’s shortterm and long-term employment outlook. While total U.S. employment is projected to increase 10.8 percent, or 15.6 million, during the decade, occupations and

industries related to health care are projected to add the most new jobs between 2012 and 2022, U.S. labor officials said. Nationwide, the health-care and socialassistance sector is projected to grow at an annual rate of 2.6 percent, adding 5 million jobs between 2012 and 2022. This accounts for nearly a third of the total projected increase in jobs. The growth reflects, in part, the demand for health-care workers to address the needs of an aging population, BLS officials say. “In the coming decade, demographic changes are expected to have pervasive effects on the nation’s economic outlook. As individuals age, their consumption patterns change and their demand for health care and related services rises,” said Maggie Woodward, economist in the Office of Occupational Statistics and Employment Projections of the U.S. Bureau of Labor Statistics. “These trends are expected to play an important role in sectoral growth of output and employment. In addition, by expanding insurance coverage to millions of Americans, the Patient Protection and Affordable Care Act will place even greater demands on the health care system,” Woodward said. Meanwhile, the leisure and hospitality industry is projected to see the largest percentage growth among the supersectors in Arkansas by 2022 at more than 20 percent, followed by education and health services sector at 19.2%. Rounding out the top five are other services (12.04%), professional and business services (10.1%) and construction (8.98%). Among the bottom five supersectors, only the information industry is expected to see negative growth. That industry is expected to see a loss of 207 jobs. The manufacturing sector is the next loser, projected to only see

SOURCE: ARKANSAS DEPARTMENT OF WORKFORCE SERVICES

a growth 4.47% through 2022. The trade, transportation and utilities (6.27%), government (7.27%), and natural resources and mining sectors (7.36%) round out the bottom five. Among individual sectors, the industry expected to see the fastest growth through 2022 is the restaurant and fast-food trade, projected to grow by 18,430 employees to a total of 96,765. The other sector expected to add more than 10,000 new employees is individual and family services, which is expected to grow from 21,231 to 32,745, a whopping 54.2% spike in employment. Three other sectors (elementary and secondary schools, offices of physicians, and colleges, universities and professional schools) all are expected to add more than 5,000 employees between now and 2022. BETTER THAN NATIONAL AVERAGE Among the biggest decliners, the Postal Service is expected to continue cutting service in rural areas across the state. Not only is the nation’s mail delivery system expected to see the largest number of lost jobs (-918) in Arkansas, but it also is expected to be among the biggest percentage decliners at -17.03%. As expected, several manufacturing sectors are also expected to lose employees through 2022, including electrical equipment fabricators (-485), pulp, paper

and paperboard makers (-443), and plastic products producers (-421). Rounding out the bottom five is landline telecom carriers, which is expected to see a loss of 379 jobs as more Arkansans switch from wired to wireless phones. Finally, Arkansas’ projected growth rate through 2022 is 1.04% on an annualized basis. “This projected growth rate is lower than the 1990s expansion (March 1991-March 2001, 2.4%) but greater than the current expansion (June 2009-, 0.5%),” Kaza said. Still, Arkansas’ growth rate is slightly better than most of the surrounding states and better than the national average. For example, Oklahoma predicts that total payroll employment will grow by 10% over the decade, or 1% on an annualized basis – adding 175,071 jobs to the state’s economy. In Missouri, that state’s labor force is expected to grow by 8.61% over the 10-year period, less than 1 percent in annualized growth. Arkansas’ neighbor to the north will add 224,606 jobs to the Missouri labor force, mainly in the urban population centers of Kansas City and St. Louis. To the south, Louisiana is projected to see an annual rate of growth of 1.3 percent, slightly higher than Arkansas. The latest employment projections for Mississippi and Tennessee only extend for the 10-year period from 2008-2018. www.talkbusiness.net

Industry

Unemployment Expected to Fall

Arkansas’ overall economy underwent a burst of activity in 2013 but slowed in 2014. By Steve Brawner Arkansas’ unemployment rate is expected to drop to 5.3% – nearly full employment – by 2016, despite jobs growing at only moderate levels. Meanwhile, personal income and retail sales will rise, according to Dr. Michael Pakko, state economic forecaster and chief economist for UALR’s Institute for Economic Advancement. That’s the outlook Pakko presented in mid-October at his annual state economic forecast. He said Arkansas’ unemployment rate will be around 6% by the end of the year and then fall to 5.5% in 2015. The state’s rate never reached the 10% level seen nationwide during the worst of the recession, but also has fallen at a slower pace than the national average. While Arkansas unemployment is falling, jobs will grow only about 2% in both 2015 and 2016. The state’s total payroll employment should reach pre-recession levels in mid- to late-2015, he said. Statewide job growth from 2010-14 was half the national rate and was propped up by Northwest Arkansas, Jonesboro and Little Rock, said Charles Gascon, regional economist and senior research support coordinator for the St. Louis Federal Reserve. Gascon presented his remarks prior to Pakko’s. Gascon said the state has 27,000 jobs less than it did at its peak in 2006 thanks to losses in certain sectors, the biggest being manufacturing, which has lost 48,200 jobs. Health care has been the fastest growing sector with 23,467 more jobs than in 2006. DECLINING PARTICIPATION Pakko said the gap between falling unemployment and relatively stagnant job

growth is the result of declining labor force participation, which has been falling since March because of factors such as discouraged workers and early retirements. Particularly concerning is the high number

Dr. Michael Pakko

Inflation is slowing because of falling oil prices and slower growth in food and medical care. of men ages 45-65 no longer in the labor force during what should be their prime earning years. And younger workers are staying in school longer than they have in the past. Nationally, the economy was slowed by winter weather earlier this year but

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

rebounded in the second quarter, with job growth now more than 200,000 per month, said Kevin Kliesen, St. Louis research officer and business economist. Kliesen expects unemployment nationwide to fall to 5.5% in 2015. Inflation is slowing because of falling oil prices and slower growth in food and medical care. He expects consumer spending nationwide to continue to increase. Business capital spending is more solid, and housing appears to be up. However, a strengthening dollar and weakening global growth could put downward pressure on exports in the fourth quarter and into 2015. The state is faring worse than the national average when it comes to labor-based statistics but better regarding personal income. Pakko expects personal income to grow 4.1% this year, by 5.4% in 2015 and by 5.7% in 2016, not adjusted for inflation. It fell 1.9% in 2013. Arkansas’ overall economy underwent a burst of activity in 2013 but slowed in 2014. Pakko said the state’s gross domestic product will grow 1.5% in 2014, 2.2% in 2015 and 2.1% in 2016. Retail sales have been slow, but Pakko predicted they will increase 5.4% in 2015 and 5.6% in 2016, not including inflation. Home sales, mostly of existing homes, are expected to grow 8.4% in 2014 and 9.9% in 2015 before falling back in 2016 to 6% growth as mortgage interest rates rise and as pent-up demand is met, Pakko said. Pakko said the approval by voters of an increase in the state’s minimum wage would have a small negative effect on the overall economy.

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Community Philanthropy:

Giving time, talent and treasure to create positive change and lasting development in the Delta region The Center’s work: • Leadership Development • Scholarship and Research • Race and Equity • Convening Leadership Development evelopment

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Target communities include: Blytheville | Helena-West Helena | Pine Bluff For more information: call 501-683-5656 email lsanders@clintonschool.uasys.edu Visit clintonschool.uasys.edu 80 TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

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In-Depth

Building A New Workforce Arkansas leaders are engaged in a major rethinking of the stateâ&#x20AC;&#x2122;s workforce education and training network in an effort to better match industry, education and the labor force. Weâ&#x20AC;&#x2122;ll look in-depth at where some efforts are focused, what leaders are saying, and how some regions of the state have responded to the challenges.

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In-Depth

Leaders Take a Look at Other States’ Workforce Education Strategies By Paul Holmes It seems certain that Arkansas soon will make major changes to the way it approaches workforce education. As Arkansas studies how it might streamline its system for preparing workers for the jobs that exist today and those likely to be created in the future, other Southern states are taking a variety of approaches. Lawmakers, business leaders and educators now have workforce education reform “on the front burner,” Gov. Mike Beebe recently said, following the 2014 fiscal session of the General Assembly in which state Sen. Jane English demanded changes in the system in exchange for her vote on the private option Medicaid expansion. English wants improved coordination of programs, elimination of duplicative programs, meaningful industry input into training efforts, measurement of program effectiveness and more money for programs that have been shown to work. Beebe, who leaves office Dec. 31, agrees that the state could benefit from a coordinated, across-the-board effort. The state’s twoyear colleges, four-year universities and a number of state agencies – including the Department of Workforce Services, the Arkansas Economic Development Commission and even the Department of Correction – provide worker education. Randy Zook, president and CEO of the Arkansas State Chamber of Commerce and Associated Industries of Arkansas, believes Arkansas could look east for an example of a workforce education system that works well. “Georgia has absolutely the best workforce training program in the country,” Zook contends, noting that it was named the nation’s best by Site Selection magazine. Georgia’s program “gives them a real edge for new site locations” because of the way

the state trains workers. With the Quick Start Georgia program “they’ve kind of taken a different approach,” he said, rather than the standard industrial recruitment pitch. “Georgia says to them, ‘Bring your management team and your capital, and we’ll train your workforce,’” Zook said. The location of a Kia auto assembly plant in West Point, Ga., is a noteworthy example of how Georgia approaches workforce training, Zook said. Quick Start Georgia not only sent a team to South Korea for three or four months to learn what equipment was involved and how workers needed to be trained to use it, but also screened the applicants for the jobs that Kia was creating. Quick Start screened 12,000 applicants and put 1,000 of those people on the payroll while they learned their jobs in the training facility that Quick Start built at the site. “On day one, they handed Kia management a trained workforce. That’s hard to compete with,” Zook said. Georgia continues to provide training in the 70,000-square-foot building that it constructed and equipped with robotic welding, electronics labs and other facilities that replicate those that new employees will encounter in the Kia plant. Georgia operates the Quick Start program through its technical college system, one that is separate from the community colleges, Zook said. As a separate entity from the traditional two-year community or junior college system, Zook said, the George Technical College system is one that is “really focused” on workforce education. Georgia’s approach “is incredibly powerful and effective,” he said. Though Zook calls Georgia’s model “best of class,” he believes Alabama runs a close second with its “really robust” workforce

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

Does Arkansas Need

A Workforce Czar? Talk Business & Politics has been asking workforce leaders if Arkansas needs a “workforce czar” — an individual with the authority to cut bureaucratic red tape who could also flex enough political muscle to make changes quickly, efficiently, and in the best interests of industry. Here’s what several state leaders had to say.

Grant Tennille

Arkansas Economic Development Commission Executive Director “I hesitate to introduce new bureaucracy to anything. I think that the next governor can serve ably as the workforce czar as long as he makes his priorities very clear to his cabinet-level directors and commits to knocking down any barriers that might crop up. I think that one of our challenges right now is the communication between the policymakers at the 10,000-foot level and the people on the ground locally. I think that’s where the meat of this problem lies.”

education system that is operated in a similar fashion. Steve Sparks, director of training and quality management for the Arkansas Economic Development Commission’s business and industry training program, recently visited Alabama for an in-depth look at the Alabama Industrial Development Training Institute, or AIDT. Alabama’s approach is “structurally different, a centralized system” for workforce training, Sparks said. Alabama works with new businesses as they come on board, providing a turnkey training package that includes giving the workers experience on the kinds of equipment they will encounter in their new jobs, Sparks said. AIDT maintains a warehouse full of equipment that can be used where needed. In Alabama’s model, he said, “the concepts and principles [of training] are exactly the same” throughout the system. Alabama customizes that training to fit the needs and sends a team to conduct the training. “It’s a fantastic system. They’ve been doing it for 30 years. It was the first to standardize the process [for training] no matter where it is.” Arkansas’ neighbor to the south, Louisiana, is “getting better” at its efforts, Zook said, and he views Gov. Bobby Jindal there as “pretty aggressive” in seeking new jobs, particularly in the chemical and petroleum industries. Sparks noted that one of AIDT’s leaders recently left Alabama for a job with Louisiana’s workforce education system. “He took that model and has started to get it replicated there,” Sparks said. Rather than using the approach that Alabama and Georgia employ, “We try to do it under the same roof as the community colleges, “with mixed results,” Zook said. Arkansas’ training “could be standardized and probably needs to be,” Sparks said. “Right now you go to our local community college” for workforce training “and they may not have what you need,” he said. Arkansas could use a process “where we pull it where it needs to be. The governor’s cabinet is working on that very thing.” Sparks said in Alabama “90 to 95 percent [of workforce training] is done by their own instructors. They have 140 full-time trainers and 200 adjuncts. At AEDC, we’ve got a dozen people and nobody does training. We have a ways to go in getting done what needs to be done.” Zook points to Kentucky as an example

of a Southern state that has an effective system of educating its workers. Kentucky – where nearly a third of new jobs come from vehicle-related projects – has created a new education/training model that offers some students the option of combining educational opportunities with on-the-job training. Kentucky companies, government and educational institutions partner to begin preparing students for the workforce through apprenticeship-style models of education. In Mississippi, the State Board for Community and Junior Colleges and the state’s 15 community and junior colleges administer the Workforce Enhancement Training Fund that provides for a custom job training program designed and carried out in partnership with a company through the local community/junior colleges. Some businesses in Arkansas “are having a difficult time finding people able to do a job and willing to do a job,” a situation that likely will become more acute as the workforce ages and retires, he said. He knows of a company in northern Arkansas that needs 100 works now but can’t find them. As a result, “they don’t know what they’re going to do,” Zook said. Employers need people

“with a reasonable level of math skills, who can read, write and show up drug-free,” he added. But though providing workforce education through community colleges has provided in the past produced mixed results, “the two-years [colleges] are really getting their act together as they respond” to the needs of the business community, the State Chamber/AIA leader said. Notable examples, he said, are provided by the response of ASU-Beebe and UA Community College-Morrilton in training workers for the boom in natural gas production from the Fayetteville Shale formation. Beebe points to Mid-South Community College in West Memphis and South Arkansas Community College at El Dorado as examples of two-year institutions that understand the needs of businesses in their service areas and respond to them. As states compete with their neighbors and globally for new jobs whether those be by expansion of existing businesses or by location of new companies, Zook said, the stakes are extremely high. “The states that get this right now are going to prosper. The states that don’t get it are going to be left in the dust.”

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In-Depth

Fenter Sees Educational Systems As Economic Development Tools By Paul Holmes Dr. Glen Fenter believes that Arkansas is one of the states battling a disconnect between its educational systems and its economic development strategies. “I think the overarching theme is that our country’s economy is certainly not what we’d like for it to be and there are many folks, and I am one of these, who believe that our educational models have not been appropriately supported or connected to our economic development strategies. We’ve lost the connection between or relevance between what we’re doing educationally and what we need to be creating economically,” said Fenter, who is president of Mid-South Community College at West Memphis. “Arkansas is not unique. A number states are battling this,” Fenter said. Those states who have the most success are those who have recognized that their various educational entities should be working together as a unit or a system, “as opposed to working in a vacuum or some sort of silo. States that are winning ... have long since started K through J, or PK-J, Pre-K through a job, and are forcing their K-12 providers and their community college providers

and their baccalaureate providers to all come up with strategies for working more efficiently and effectively, basing the majority of the funding on the desired economic development outcomes. That

approach considers what sorts of jobs the leaders believe their regions can create or sustain and what training, education or skill sets are required to attract jobs that will provide the region’s citizens with an acceptable quality of life.

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

Fenter believes that community leaders in Crittenden County have devised a powerful tool to help reconnect the educational systems and economic development efforts. When the 2014-15 school term began Aug. 18, West Memphis High School was to launch The Academies of West Memphis, a conversion charter high school that Fenter says is unique in Arkansas because it represents “a partnership between a public high school and community college” for instruction. The idea of the creation of The Academies of West Memphis “is to make education relevant to an individual’s economic future,” he said. Participating high school students will take classes on the campuses of both West Memphis High School and Mid-South. Eight-graders will take a Dr. Glen Fenter series of career orientation seminars and ninth-graders will take a year-long career exploration course. During the second semester of their ninth-grade year, participating students will choose a program of study in one of the three career academies to begin in their sophomore year at West Memphis High

Named “Outstanding Southern Community College for Work Force Training” by Southern Business & Development magazine.

Connecting Education and Job Skills in the Mid-South Mid-South Community College is on the forefront of reforming the state’s workforce education system. With innovative alternative partnerships in education and business, the College is playing a key role in designing the education and training needed to fill current and future jobs. These programs teach skills to meet the need for a trained and educated workforce in the future and align education, workforce and economic development assets to create clear pathways to lifelong learning.

www.midsouthcc.edu

For more information on Mid-South Community College’s Workforce Development initiatives, call 870.733.6852.

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World-Class Geography + World-Class Infrastructure + World-Class Education =

World-Class Opportunity

The Arkansas Delta Training and Education Consortium (ADTEC) is a partnership between five community colleges in Eastern Arkansas that focuses its energies and efforts on a collaborative and comprehensive approach to economic development in the Arkansas Delta. ADTEC directly supports the emerging technology needs in the region and is dedicated to sharing resources, such as faculty, equipment, curriculum, and best practices, to provide a broader range of educational and training services at lower overall cost.

For more information, visit www.adtec-ar.org or contact Dr. Callie Dunavin at (870) 733-6840.

Arkansas Northeastern College | Arkansas State University-Newport | East Arkansas Community College 86

Mid-South Community TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014 College

| Phillips Community College of the University of Arkansas

In-Depth: Economic Development Tools School. Those are the SLE – service, law and education; BTAC – business, technology, arts and communication; and MTHS – math, transportation, health and science. Interested students meeting academic requirements may also enroll for concurrent college credit. The program is designed to put students “in a position to be employable in a career track very early in their years immediately after high school or shortly after high school.” Students in the career track will leave with industry-recognized certificates of proficiency in their chosen fields, he said Qualifying students who enroll in the concurrent credit program may take advantage of a privately funded scholarship, and it is possible to leave high school “with 40-plus hours of college credit at no cost to them or their families.” Through MidSouth’s University Center students can start their college work at Mid-South and continue to a four-year degree from Arkansas State University or one of seven other four-year schools without ever leaving Mid-South’s campus. When Toyota was searching for a location for an auto assembly plant early in this decade, it was widely believed that Marion, the Crittenden County seat, had the inside track. Toyota subsidiary Hino Motors Manufacturing already operated a truck component manufacturing facility at Marion, Crittenden County contains the second-busiest interstate highway intersection (I-40/I-55) in the country, with river and rail access just a stone’s throw from the site adjacent to Hino. However, Toyota ended up selecting Blue Springs, Miss., near Tupelo, for the plant that, after some delay, began producing Toyota Corollas in 2011. “When we lost Toyota in 2005, we recognized that there were a number of factors in Toyota not choosing to come here. Some are well-documented, and some are only storied in dark catacombs, but at the end of the day they chose to go someplace else,” Fenter said. Workforce concerns were among the factors that Toyota reportedly cited to state leaders in passing on Marion. Crittenden County leaders decided to use

the loss of the potential Toyota plant and its good-paying jobs “as an opportunity to rally the troops in the region” for economic development, Fenter said. Mid-South now has programs in alternative fuels, advanced manufacturing, transportation and logistics as a result of identifying what the region’s future might look like in terms of new job growth and development. “Eastern Arkansas’ mentality in terms of educational design still in many cases is rooted in the old agrarian economy where we only educated a few because we needed the rest to work on the farm. We’ve evolved well beyond that. We have to re-think our educational model and recognize in eastern Arkansas and all across this country that the economy has moved well beyond our traditional K-12 model,” he said. “When I graduated from high school in 1978, two-thirds of my class went straight to work at nice factory jobs in Fort Smith, Arkansas, working for Baldor or Rheem or Whirlpool. These guys are all retiring now. They raised two or three kids, drive a three-year-old pickup and their wife trades Impalas every other year, they’re making payments on the braces, but everybody’s cool; it’s all good,” Fenter said. However, “a kid coming out of high school today has no such opportunity,” he said. “What our marketplace is looking for is folks with skills to help build things, make things happen. There’s no such thing as a bad job, there’s no such thing as a bad side to a company investing and creating jobs and growing jobs and making money. There are very few problems in Arkansas or any other state that more jobs, more taxpayers, more opportunities for improved and enhanced quality of life won’t fix. “I am excited about the future that states like Arkansas can enjoy if we can just simply start to think differently about our model for educating Arkansans,” Fenter said. “Our educational systems represent our greatest economic development tools. Ours, like most other places, need a tuneup on occasion and I think we’re certainly at a place where a new set of wires, a new set of plugs, maybe even a new navigational direction would be well advised.”

Does Arkansas Need

A Workforce Czar?

Randy Zook

Arkansas State Chamber of Commerce/ Associated Industries of Arkansas CEO “It depends on how fast you want things to get better. Fast? I think it would be a very smart move to, perhaps, not put somebody in a new role, but assign a role at a very high level within the governor’s staff or the governor himself.”

Shane Broadway

Arkansas Department of Higher Education Executive Director “In terms of the overall model, the one thing I would recommend to whoever the next governor is going to be would be to keep the governor’s workforce cabinet model. I think it has worked very well. We responded early on in the governor’s administration to business and industry in creating the career readiness certificate, the Arkansas Works program, career coaches program, career pathways initiatives, and many different programs that have come out of that model. If nothing else, you maintain that model whether you have someone who’s working and coordinating out of the governor’s office or wherever. I’d leave it to the governor to decide.” www.talkbusiness.net

In-Depth

Successful Strategy Employer engagement helps SouthArk be responsive and develop quality training for workers. By Paul Holmes El Dorado’s manufacturing community includes a complex mix of industries that might seem to present a difficult challenge in terms of preparing a trained and skilled workforce. But South Arkansas Community College has developed a solution that is working well for Union County-area manufacturers that range from timber production to chemical and petroleum processing to hazardous waste disposal. SouthArk is considered by Gov. Mike Beebe to be one of Arkansas’ great success stories in meeting its service area’s workforce needs. It is succeeding, said Dr. Barbara Jones, the SouthArk president, because the employers who need quality workers help develop the programs. Jones calls employer engagement the key to developing programs that are responsive to those employers’ needs. “Our industry champions feel like they own the programs. They’re very vested in it” in terms of input into the curriculum offered, Jones said. “They want to see [the program] succeed, want to be able to hire these students and make sure they’re prepared for their workforce. It’s not ownership from control but ownership from input and feeling like they have participated in producing that well-trained workforce.” For example, Jones said that when representatives of the school visited industries to assess their workforce needs when she came there five years ago, “We kept hearing the same thing.” Many of the industries were anticipating the retirement of a significant number of process operators, employees who control and monitor the systems in industrial plants. Manufacturers feared “they were not going to have a pipeline of

a trained work force” to run the pipes and valves in El Dorado’s plants. In response, she said the school, working with a “very strong advisory committee that met very regularly,” developed a college-credit process control program. SouthArk also has developed a number of non-credit process technology programs, Jamie McConathy, dean of corporate and community education, said. One of those is the Basic Operator Orientation Training, or BOOT camp. “Industry requested it, we facilitated them, we brought them to the table. ... They told us what the course needed to look like, how long it needed to last and the topics that needed to be included,” McConathy said. The result was a 24-hour course, three days a week, held once a month. Launched in February 2013, BOOT camp has 172 graduates. SITE-SPECIFIC TRAINING Another program that has become an essential piece of workforce training in El Dorado’s manufacturing environment is the Contractor Safety Training and Orientation Program, or C-STOP. This program, launched in 2007, was designed to “reduce the redundancy of information that contractors were receiving at each plant,” McConathy said. More than 12,700 people have completed the course, she said. That course, McConathy continued, is taught to a “wide variety” of contractors. C-STOP training includes site-specific training for the plant in which they will be working, McConathy said. For example, El Dorado Chemical Co. is building a new plant within its existing plant, “so we are seeing contractors from

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

all over; from scaffolding to general contractors to specialized areas, they are required to have this training before entering the plant.” There are other training programs, including those recognized by contractors’ reciprocal safety councils, she said, “but El Dorado Chemical is one in particular who prefers C-STOP because they had input in creating the program. So they’re invested in it.” Jones noted that the Lion Oil refinery periodically schedules a shutdown during which the company performs “a lot of repair or replacement and they bring in a lot of contractors to do that in a short period of time and the same thing” is required – that those contractors complete the C-STOP program. Contractors must renew the training every year, she said, and contractors’ employees must earn a badge that they present in order to enter the Lion plant. BOOT camp begins with some of the general safety topics similar to those covered in the C-STOP program, but progresses to other topics, including one called P&ID, for piping and instrumentation diagrams, blueprint reading. “That’s an issue that people struggle with, so we’ve included P&ID. That is something that has been repeatedly requested by industry,” McConathy said. During the training course, she said, “they learn what a career in process operation actually looks like.” One of the key elements is hands-on training on what McConathy calls a “mini-plant,” a simulator that replicates the control room that runs the complex systems of pipes and valves a process operator is likely to encounter in an El Dorado manufacturing environment.

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In-Depth: Successful Strategy The $300,000 simulator, provided by the city of El Dorado through its economic development tax, is “a very large unit. Everyone’s always very impressed by it,” she said. The 10-by-20-by-9-foot simulator uses city water, not chemicals, so budding process operators can not only manipulate controls safely, but also learn troubleshooting and some failure analysis through training scenarios, she said. It also provides skills assessment of the students.

The program has proven so popular that SouthArk is developing BOOT camp Level II for additional training opportunities. Again, the industries are providing input into the training they want and need, McConathy said. Additionally, several industries ask SouthArk to provide their newly hired engineers who are not familiar with process operation training in that discipline in order to better prepare them for their careers.

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McConathy calls the course for newly hired engineers “process operation for nonprocess operators.” SouthArk finds itself training not only the next generation of workers who will replace retiring Baby Boomers, but also, experienced workers, including those who may have degrees in which they can’t find jobs in their fields of study, Jones said. “We’ve got two announced plant expansions in our area,” she said, referring to El Dorado Chemical and Clean Harbors, a processor of hazardous waste. “With those two, we’re looking at about 150 new jobs. We’ll be doing a lot of training for those two.” She said several other plants are expected to announce expansions soon. WAGE WORKS Employers in the El Dorado area prefer the WAGE – Workforce Alliance for Growth in the Economy – workforce education program over the career readiness certificate program, so SouthArk offers WAGE through its adult education division, McConathy said. “We had employer champions when we first started using it. They’ve seen the value of it to screen applicants. Not only are they capable” in the desired skill areas as a result of the program, McConathy said, “but they just bring the right attitude ... are they willing to do what they need to do to earn their WAGE certificate. It is challenging. It is a program, not just a test.” Getting the word out about the potential of a career in manufacturing starts early in El Dorado, Jones said. Industry representatives have visited fourth-grade classes to talk with students about the manufacturing field, and SouthArk hosts eighth-graders for a manufacturing day on campus, she said. “The old image of working in manufacturing has changed. The wage you can earn in these manufacturers is tremendous,” she said. “Our folks who go out in process technology can enter about $50,000” annually plus built-in overtime, she said. “Nevertheless, the pipeline of new workers to supply manufacturers is a concern both nationally and locally,” McConathy said.

Your Ticket to A Career

Community Colleges provide career opportunities through certification training and associate degrees. Check out your local college to explore a pathway to jobs in aerospace, advanced manufacturing, nursing, natural gas, construction, welding and other industries.

Arkansas Community Colleges Providing Opportunity, Building Careers

Formerly known as AATYC

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In-Depth

Batesville, Trumann Work on Workforce Education Centers

By Michael Wilkey

Two Northeast Arkansas towns are seeing their plans for the future come to life, as residents look for ways to be prepared for a changing world. The cities of Batesville and Trumann are in the process of building workforce training centers. Batesville Mayor Rick Elumbaugh said the work to have a center has been nearly a decade-long project that city and county officials, as well as officials with the University of Arkansas Community College at Batesville, have worked on. Council members recently approved the selection of M & A Jones Construction of Batesville to work on the $981,390 project. The project was funded by a $450,000 U.S. Department of Agriculture grant, a $100,000 state general improvement grant and a $431,390 grant from the Arkansas Economic Development Commission. In addition to the workforce center, Elumbaugh said the 100,000-square-foot center on White Drive at UACCB will have a fire training center to help area fire departments get updated training. The fire training center will replace an existing one along the White River. While nothing is set in stone, Elumbaugh said plans call for a hotel development to be built in the area. As for the workforce center, it will help in a multi-layered approach, Elumbaugh said. “We will work with Bad Boy [Mowers] and the poultry companies, assist them in any capacity,” Elumbaugh said. “We will work with workforce training and education. Also, we will use the center to help people

who have lost their jobs.” Construction is expected to be done by mid-2015, Elumbaugh said. DIFFERENT NEEDS IN TRUMANN Just 12 miles from Jonesboro, Trumann is an agricultural and manufacturing town facing different needs. Mayor Sheila Walters said the town’s new adult education and workforce training center will help meet some of those needs. The work on the center, which will be on Melton Avenue across from the police station, began in 2011 when the Sims and Talbot families donated $200,000 to the project. The Patteson family of Jonesboro also donated the land, while the Delta Regional Authority gave $200,000 in May 2013 for the project. Walters said the center will help businesses with training and the city is working with Arkansas State University-Newport on developing several adult education and business training programs. One of the programs is a pilot project, with Blue Cross/Blue Shield’s Blue and You program, and will help people become U.S. citizens, Walters said. “It will be for everybody,” Walters said of the project’s scope. “We have a growing Hispanic population here in Trumann.” Many people who want to take the test have to travel several hours one way to complete it. As for the workforce training, the current center – inside the Trumann Rural Water office on Arkansas 463 – only has room for

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

several people at a time. “It is narrow but has served its purpose. This one will be so much better,” Walters said of the new building. Construction is expected to begin later this year, with a groundbreaking possibly sometime in August 2015, Walters said.

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Leadership

Sixth Sense:

Customer Loyalty We always hear that ‘keeping customers happy keeps them coming back.’ So we asked six business leaders for tips and advice on ways to maximize customer satisfaction and get excellent referrals. By Bill Paddack

Sericia Cole

Bobby Thurman

Stacey Ellis

Executive Director Mosaic Templars Cultural Center Little Rock

Vice President, Arkansas State Board of Embalmers and Funeral Directors

Director of Sales Embassy Suites Hot Springs Hotel & Spa Hot Springs

There isn’t a magical formula that keeps customers satisfied and coming back. In general, consumers are seeking more than a mere transaction; they can get that most anywhere. However, it’s the experience they get, the personal touch, that often means they will return and, even better, bring someone along with them. Some things that can keep happy customers returning include providing a unique atmosphere, being attentive to needs, and going above and beyond (over delivering) expectations. Customers want to be talked to rather than talked at, so genuinely communicating with them – asking for their feedback and truly listening – also goes a long way. Maya Angelou famously wrote that, “People will forget what you said, people will forget what you did, but people will never forget how you made them feel.” The poet’s words are also applicable in business; the best “magic” to keep customers coming through the doors.

The funeral profession is defined by the service we give or offer to the families we honor. In a blog I read recently, it said, “… Is the word ‘service’ what separates the weak from the strong, the average from the best?” There’s a reason we are referred to as a funeral service or funeral profession, not a funeral industry. We’re helping people get through a difficult time, and we always try to exceed the families’ expectations as we support them in their time of need. The blog went on to say, “It takes a BIG heart, a lot of listening and an amount of compassion that is so incredible that most people can’t even imagine it.” I believe that to be true. It’s that level of service that you extend that keeps those same families coming back to you generation after generation and encourages them to tell others about your business.

President, Nelson Funeral Service Berryville

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

The Embassy Suites Hot Springs Hotel & Spa wants our guests to be “raving fans.” Fans that will not only come back time after time, but will share their memories and experiences with everyone they come in contact with. We do that by looking for and finding ways to engage with our guests at every opportunity. The more we know, the better we can find ways to make people smile, make memories and improve on our product. And then … we communicate with each other about our guests. When the team comes together to create great experiences for others, it benefits not just the guests, but the overall morale of the team. Positive morale equals improved productivity and retention. We are building relationships with our guests and in return, they come back, bring their families, friends and events, which helps us create more “raving fans.”

Danny Townsend

Jennifer Herron, AIA

Ben S. Hubbard

President Perfect Places Lawn Care Alexander

Principal Herron Horton Architects, Inc. Little Rock

Blytheville

Actually, customer retention and recruitment can be pretty simple – just do what you say you’re going to do. Don’t operate with a profit-centric mentality when you are a service business. You must operate with a service mentality first. Great employees make for great relationships, and our people are our greatest asset. This starts at hiring the right personnel and retaining them through growth opportunities and steady, full-time, non-seasonal work. We don’t hire seasonal help or take on seasonal work. This ensures that our employees are well-trained and familiar with our customer’s properties. Chasing the profits that can be made during the busy season can prove to be disruptive to our regular service obligations. The additional revenue isn’t worth a lowering of standards for the increased volume. This model has proven well for our company as we have over a 95% retention rate and our customers come to us through referrals.

Herron Horton Architects will be celebrating 15 years in the architecture business, and customer satisfaction is key to our success. We have found that responsiveness, competence, professionalism, obsession with quality and the eagerness to listen and actually understand the client’s wishes are key in developing lasting relationships and successful projects. We assist clients in site selections for a project, provide programming services that include decision-making about project values, goals and requirements as well as help expose clients to a wide range of alternative approaches and help them choose appropriate directions. Our professional services not only involve collaborating during design but also extend through construction. Problem-solving on the spot and providing alternate ideas during construction while maintaining the aesthetics, our client’s goals and staying in budget are important to our clients. Our obsession with quality and attention to the little things make a huge difference.

I believe the best way to maximize customer satisfaction is to build a relationship, a friendship with your customer. If you treat them with fairness, honesty and respect, you can build a bond that will translate into positive feedback and repeat business. You also have to go the extra mile to keep your customer happy. Do everything possible to make their experience at your store positive. That means serving refreshments, taking care of their children, bending over backwards to help them fulfill their needs. Loyalty is hard to attain in the current business climate, but if you treat your customers like you would your best friend, it will go a long way toward building a customer base that will not only return, but also tell their friends that you treated them right.

President, Arkansas Homefurnishings Association Secretary-Treasurer, Hubbard and Hoke Furniture

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Executive Q&A PHOTOS BY BOB OCKEN

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

Tom Schueck Schueck Steel founder expounds on the economy, the airport and state infrastructure needs. By Roby Brock In the years since earning a civil engineering degree from Washington University at St. Louis in 1965, Tom Schueck has formed and managed companies while always keeping the same mantra – provide superior service at a fair price. He is chairman and CEO of Lexicon Management Group, Inc., of Little Rock, a family of companies that includes Schueck Steel, which specializes in structural steel erection, mechanical equipment installation, construction management and plant maintenance. Along the way, Schueck has served on numerous boards and commissions. We caught up with him recently and asked his thoughts on – among other things – the economy, challenges facing the highway and airport commissions, and the late Don Tyson. TB&P: What’s your take on what you see going right in the economy and what you see going wrong in the economy? Tom Schueck: What do I see going right in the economy ... well, you know, after every bump in the road in the economy, there’s always a spike. You’ve got that, we’re in the spike right now, but our manpower situation … we talk about bringing all this work into America. Well, American manufacturing’s got a lot of work, there just aren’t enough people to do the work that’s here. That’s a problem we have. As far as what’s going on in the economy, it’s regulations. Regulations kill small business or any type of business in America. It’s a worldwide economic manufacturing basis, and a lot of these people, they have no regulations, and we have to compete against them. For a job last week, steel came from Thailand. I’ve never seen steel coming from

Thailand. And you know, we did a job in Thailand and there are no rules there … no workman’s comp there. Those people get hurt, they don’t work; they don’t work, they don’t get paid. You are on the state Highway Commission and the Little Rock Airport Commission. What competitive advantages and liabilities does Arkansas have as far as infrastructure? The good part is the fact that we’re a small state. That’s nice. People know each other, and nothing we’ve got is mega big. Let’s talk about the airport. Our boardings are down from a million three to about 950,000. That’s a bad thing, and part of that is because we don’t have any large corporations with headquarters in Little Rock. We’ve got a couple smaller ones, but in the scheme of things, we don’t have the people that travel on business. So our mixture of pleasure and people who travel on business is about 50-50, whereas in places like Atlanta and Dallas and Houston, of course, you’ve got all kinds of business travel. So yeah, that’s a bad part. The other bad part is the price of the tickets – nobody ever really knows what that’s gonna be, so instead of flying to Dallas they drive to Dallas, ’cause they know they can get there, and that the price is gonna be a lot more reasonable for a few hours of their time than driving to Little Rock and flying to Dallas. Those are the bad things, of course. And regarding highways, Arkansas voters OK’d a 10-year, half-cent sales tax to improve highway and infrastructure projects throughout the state. That really helped a lot. And I think you’ll

see that in the large metropolitan areas, which is here [Little Rock], Fort Smith and Northwest Arkansas, once we get these intersections where the six lanes meet the six lanes, the interstates meet the interstates, once we get those interchanges in good shape, kinda like we’re doing with the Big Rock interchange, I think you’ll find that the traffic will flow much better and then all we have to do is kinda straighten out other roads. One of the biggest things in my life right now is trying to toll Interstate 40. I know you mention toll and everybody gets excited … One way or the other… But the only way it’s ever going to be affordable for us to put another lane on Interstate 40 is to toll it. Otherwise, I don’t know how it’s going to get done. If we could do it without tolling, I’d be all for it. But … if we toll it, all the money we’re spending now on Interstate 40, just to maintain, would be taken care of with the toll money, and we could use that money to upgrade other highways throughout the state. That would be extremely helpful. Also, most people don’t know that the Highway Department gets very little money from the state. So, last year, we tried to get the sales tax on anything that’s road related – tires, batteries, cars – that’s what’s done in most states around the country. But, we were unsuccessful. I think we’ll probably keep going after that. You’ve got 10 years to try to get it to happen, so … Yeah, and then you got I-49, which connects New Orleans with Kansas City. We got a big hunk missing right in the middle of the state of Arkansas. It’s gonna cost a www.talkbusiness.net

Executive Q&A: Schueck

couple billion, maybe 3 billion. We don’t know where that money’s gonna come from. We got I-69 which comes from the East Coast, cuts across the center of Arkansas, goes to the Texas coastal area ... that’s another 3 billion that we don’t know where it’s coming from. We don’t have it. We don’t have that kinda money – we just don’t have it. You serve on the Don Tyson Family Trust. How did you meet the late Don Tyson? Don was a remarkable man. I don’t know exactly where I met him, but there’s a good

chance it was in a bar. To do what he did with a company is just remarkable. There’s nothing that scared him. From a business standpoint, he’d go after somebody twice his size … to buy – and he did it twice! You know? And, he was just extremely intelligent, that whole Tyson group is – they got that super gene that just makes you real smart. But there’s a certain amount of gambler, and they’re not afraid to put it out there. As you can see, they’ve built a hell of a company. And the company today is even much, much bigger and better than when Don left us. Still miss that man.

TALK BUSINESS & POLITICS | NOVEMBER/DECEMBER 2014

What’s the best business advice you’ve ever given or received? Well, I’ve been asked that question before. My own advice is brains. Brains’ll win every time; I believe that. As far as just in this business, I don’t believe there’s any real sound advice other than take care of your money. You know, making money’s one thing, keeping it is something else. I forgot who told me … I think it was Don Tyson.

A Strategy for Growth. Deltic Timber Corporationâ&#x20AC;&#x2122;s growth is based on the vertical integration of Arkansasâ&#x20AC;&#x2122;s most abundant natural resource. The value of our ownership and management of approximately 530,200 acres of Southern Pine timberland, is enhanced through efficient wood-products manufacturing facilities and the environmentally sound development of commercial and residential real estate. These assets combine for a strategy for growth in an expanding economy.

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