The 188th Fighter Wing flew its last training mission with its A-10 aircraft Friday (May 16) before the planes leave Fort Smith for the final time as the fighter wing transitions to a new remotely piloted aircraft (RPA), targeting, intelligence, surveillance and reconnaissance (ISR) mission.

According to Maj. Heath Allen, the final training mission of the aircraft — known officially as the A-10 Thunderbolt II "Warthog"— moves Fort Smith's Air National Guard base one step closer to fully implementing its new mission, first starting with re-training of the base's nearly 1,000 personnel.

"We're looking to get initially operationally capable somewhere around 2016," he said. "That's basically where we get enough folks through the training pipeline that we can actually start manning a mission. A cap is what they call it, an orbit."

The training, he said, has already begun as the base has transitioned A-10 aircraft to other Air Force bases. As of Friday, only three of the aircraft remained on site from a maximum of 20 prior to the announcement February 2012 that the 188th would lose the A-10 mission.

One of the three remaining planes is scheduled to depart Fort Smith for its new home at Moody Air Force Base near Valdosta, Ga., on May 29, with the final two scheduled to depart Fort smith on June 7, leaving the Air National Guard base with no planes.

One of two pilots to fly Friday's final mission described the experience as "bittersweet."

Lt. Col. Marty Dahlem, an operations support squadron commander at the 188th and a Dallas/Fort Worth-based pilot for American Airlines, started his Air Force career as an enlisted airman at the 188th in 1988.

"It's bittersweet. I had a career out here. I've been flying out here since 1995 is when I got back from pilot training, been in the unit since '88. So putting the gear down for the last time and making a full stop, it was definitely a bittersweet feeling knowing this is my last sortie in a technical airplane. But you know, (I'm) excited about moving on and getting the next mission started."

It was a sentiment echoed by Col. Mark W. Anderson, commander of the 188th Fighter Wing.

“This is another historical milestone in the rigorous process of a mission conversion. While we’re certainly excited about our future, it’s the moments like these that make the reality of it all set in.  We’ve made some astounding accomplishments in this aircraft in a very short period of time, including our wing’s two largest-ever combat deployments. This is certainly a bittersweet day. We’re going to miss flying over the best military community in the world.”

Dahlem — who has flown not only 900 hours in A-10s, but also 1,200 hours in F-16s, and has deployed to Iraq and Afghanistan — described his time at the 188th Fighter Wing as having been much more than a career, but also a continuation of the legacy his father, Lt. Col. Mike Dahlem, started at the 188th in 1961 when he was a pilot.

With the combined service of both men, the 188th has been sending a Dahlem into the skies over Fort Smith and across the world for 53 years. It was something the younger Dahlem thought about Friday as he flew his last sortie and contemplated the generations of airmen who have continued their family's service at the 188th and will continue to do so under the new unmanned mission.

And while there was uncertainty about the future of the 188th following the announcement of the loss of the A-10 mission, Dahlem said what helped him and the men and women of the 188th most was a unified community that wrapped its collective arms around the members of the unit.

"I really want to thank the community, mostly, for all the support that they've given us through this whole thing, from the F-16s through the A-10s to now transitioning to the MQ-9. I couldn't have asked for better support from the community and the people that come with that. It's been outstanding."

As the transition continues at the 188th, Allen said some minor shifts in personnel could take place as firefighters stationed at the 188th could possibly be moving to Fort Chaffee, though he said nothing was official at this time.

"As far as the maintainers and all of that stuff, we're not losing anybody," he said, adding that in many cases salaries would increase for base personnel as part of the new unmanned mission.

Tyson Foods announced Thursday (May 29) plans to acquire Hillshire Brands in a deal that would be worth $6.8 billion. Tyson said it is not interested in Pinnacle Foods, which Hillshire Brands recently announced it planned to purchase subject to shareholder approval.

Jimmy Dean, Ball Park and Hillshire Farm are a few of the brands owned by Hillshire.

“We believe that there is a strong strategic, financial and operational rationale for the combination of Tyson and Hillshire,” said Donnie Smith, Tyson Foods CEO. “Our proposal provides Hillshire shareholders with an immediate cash premium for their shares that we believe is both greater and more certain than what can be attained in the near term by the company either on a standalone basis or in combination with any other food processing company.”

Tyson’s proposed price of $50 per share represents a 35% premium to the unaffected closing price per share of the company’s common stock on May 9, 2014, the day prior to the announcement of Hillshire’s proposed agreement to acquire Pinnacle. The offer from Tyson is also more than the $5.52 billion offer Pilgrim’s Pride made just a few days ago on Hillshire Brands.

Smith said during a media call that the Tyson Board mapped out a plan to grow its prepared foods division more than a year ago and the Hillshire offer is a great match with Tyson from a business and culture standpoint.

Chief Financial Officer Dennis Leatherby said the Tyson’s offer of $6.8 billion was made with ample thought. He adds that Tyson has the ability to raise that offer given its strong balance sheet, but gave no indication that Tyson is willing to pay more at this time.

He projects the deal has a 3-to 5-year payback in terms of return on invested capital. He said the deal will reduce the company’s return on investment from 21% into the mid teens for the next three years or more, but beyond that Leatherby expects a return to 21% or higher.

“We believe this is a one-plus-one-equals three growth opportunity,” Leatherby said.

The Springdale-based meat giant said the combination of Tyson and Hillshire would reposition Tyson as a leader in the retail sale of prepared foods, with a complementary portfolio of well-recognized brands and private label products. 

“In particular, we believe that the strength of Hillshire’s products in the breakfast category would allow Tyson to capture opportunities from shifting consumer trends in this attractive and fast-growing daypart where Tyson has little presence today,” Tyson noted in the release.

Smith said the deal will also benefit Tyson shareholders as their are numerous supply chain synergies and greater opportunity to expand retail product categories and sales.
The pro forma company would command sales in excess of $40 billion annually, with projected current year earnings of $4.63 per share. The deal, according to the company, also would give Tyson a greater pork market share and expanded retail sales in its prepared foods segment which are now heavily tied to food service.

There is no financing condition to the proposal. Tyson has secured a loan agreement from Morgan Stanley Senior Funding, which Tyson expects will be joined by JP Morgan Securities LLC in the near future. This proposal has the unanimous support of the Tyson Board of Directors and is subject to the termination of Hillshire’s merger agreement with Pinnacle.

Seeking Alpha analyst David Trainer noted that Pilgrim’s and Tyson have over bid for Hillshire Brands.

“TSN (Tyson) has offered the usual statements about positive synergies resulting from the deal, but unless these synergies can double HSH's profits (not likely) the deal is bad for TSN investors,” Trainer noted.

Trainer also said the deal “ties up a significant amount of capital in a low-performing asset and should add a significant amount of debt that will eat up future cash flows.”

Wall Street investor appear to like the deal anyway. Shares of Tyson Foods (NYSE: TSN) were trading at $43.25 in late afternoon trading, up more than 6% for the day. During the past 52 weeks, Tyson shares have ranged from a high of $44.24 to a low of $24.48.

Shares of Hillshire Brands (NYSE: HSH) were up more than 17% to $52.76 in late afternoon trading. The rise indicates that the investment community anticipates a bidding war for Hillshire.

The Dixie plant in Fort Smith, one of the first manufacturing operations to move to the city after World War II, is receiving a $40 million equipment and facility upgrade for a new plate line expected to begin production in 2015.

Officials with Atlanta-based Georgia Pacific, the parent company of Dixie, announced the expansion Thursday (May 29), saying that employment at the plant will exceed 350 once the new line is fully operational. The company did not provide details on how many jobs will be added as a result of the investment.

"Georgia-Pacific already has invested more than $30 million since 2012. This latest investment will further modernize the plant and improve its long-term competitiveness in plate manufacturing while meeting the growing demands of our consumers and customers," Larry Balch, Dixie plant director, said in a statement. "We appreciate all the support we have received from our local and state economic development partners in making this investment a reality."

The company said work on the capacity expansion has begun.

According to the GP statement, the investment at the Fort Smith plant is part of more than $100 million of planned investments at other Georgia-Pacific facilities in Arkansas during 2014. GP is a privately held company owned by Koch Industries. GP employs 2,400 in Arkansas with salary and benefits of $179 million, noted the company statement.

"We appreciate Georgia-Pacific's latest Arkansas expansion and its continued confidence in the Fort Smith workforce," Gov. Mike Beebe said in the statement. "The company's investments in Sebastian County and across Arkansas repeatedly showcase our role in American manufacturing."

Tim Allen, president and CEO of the Fort Smith Regional Chamber of Commerce, told The City Wire that the investment “helps secure their presence” in Fort Smith. He also said the investment by GP in the Dixie plant also preserves a link to the city’s manufacturing history.

"Georgia-Pacific has been an outstanding corporate citizen in Fort Smith since the facility was built in 1948. This expansion illustrates their commitment to Fort Smith for many years to come," Allen said in the GP statement.

Any boost to manufacturing jobs in the Fort Smith region is welcome news. The Fort Smith area manufacturing sector employed an estimated 18,200 in April, unchanged compared to March, and below the 18,300 in April 2013. Sector employment is down almost 36% from a decade ago when April 2004 manufacturing employment in the metro area stood at 28,400. Peak employment in the region’s manufacturing sector was first reached in July 2000 when manufacturing jobs totaled 31,700.

Georgia-Pacific is one of the world's leading manufacturers and marketers of bath tissue, paper towels and napkins, tableware, paper-based packaging, office papers, cellulose, specialty fibers, nonwoven fabrics, building products and related chemicals. Familiar brands include Quilted Northern, Brawny, and the Dixie line of paper plates and cups. The company employs approximately 35,000 people directly, and creates nearly 130,000 jobs indirectly.

The lines between supplier and retailer are becoming more blurred in a world in which technology blends the various ways – aka, omni-channels – in which consumers and retailers interact.

Jim Tompkins, CEO of Tompkins International, has said the blurring will increase as suppliers delve into retail ventures of their own, whether online or with limited brick and mortar sites.

Ken Nisch, chairman of JGA, shared recently during his talk at the SHOP Conference at the University of Arkansas that more consumer product brands are dabbling in retail store ventures to build loyalty and connect with consumers one-to-one. He said perhaps Apple does it better than anyone, but McCormick, Hershey, Jockey & Choboni are among supplier brands gleaning new insights through retail ventures.

SPICE IT UP 
The McCormick World of Flavor retail venue opened in August 2012 in Baltimore’s Inner Harbor. McCormick executives pondered the idea for more than 25 years, and finally built the story to help share the company’s 125-year-old story, said Jim Lynn, McCormick spokesman.

Nisch, whose firm designs retail stores, said the McCormick venture blends history, culinary and cultural aspects in a way that is resonating with consumers. While the product company has no plans for any other outlets, it notes that the insights it gets from this one venue have been well worth the effort.

Experts said product suppliers and/or manufacturers don’t go into their own retail venture for the sake of just adding sales. Carol Spieckerman, CEO of NewMarketBuilders, said it’s more about giving suppliers an outlet to tell their brand story in a cohesive and compelling way rather than relying solely on the merchandising whims of their retail partners.

“Many companies are still referred to as ‘manufacturers’ or ‘retailers’ when in fact, an increasing number of them operate multiple business models and no longer have a single identity. Going forward, multi-model companies that operate wholesale, owned retail and direct-to-consumer businesses will be the rule rather than the exception,” Spieckerman said.

She adds that suppliers like Chobani are leveraging spin-off concepts to showcase usage occasions for their products. The showcasing also reinforces a company or product culture.

SHARED CULTURE
Nestled in the heart of Soho, New York, Choboni Soho operates a Mediterranean yogurt bar that allows its signature Greek yogurt to take center stage. The yogurt is prepared fresh daily in-house and then paired with hand selected ingredients like pistachio and chocolate or cucumber and olive oil.

“It’s not just the creations that are unique. The retail concept’s design reflects the pure quality of Chobani Greek Yogurt and our Mediterranean roots,” said Peter McGuinness chief marketing and brand officer.

“When we first opened Chobani SoHo in 2012, we pushed the boundaries of what Greek Yogurt could be, and our expanded menu continues that journey with the addition of sandwiches, soups, desserts and more," Hamdi Ulukaya, CEO and founder of Chobani, said recently when the venue was expanded. 

The new menu developed by Ulukaya features sweet and savory Chobani Greek Yogurt creations, plus a series of inventive items for any time of day, including soups, sandwiches and desserts.

CATEGORY INNOVATION
Spieckerman said other manufacturers like Jockey are involved in their own retail venture to create impact around an important category.

The Jockey Bra store in Schaumburg, Ill., is a manufacturer’s  innovative approach to help woman find bras that fit properly. Nisch said this retail store is more like a showroom with various experience zones within it.

He said Jockey focuses on the everyday bra, with just three colors and five styles that come in 55 sizesbased on their own standard fitting guidelines. Shoppers can get the sizing kit and fit themselves at home with online assistance or come into the store for a personal fitting. But the store itself is designed like a showroom, with a spa feel. 

Jockey’s objective with their physical store was to create an innovative new bra shopping experience store. They accomplished this through direct consumer contact, online and brick & mortar. The store design allowed for individualized consultations and retail. It also provided a solution to the frustration associated with traditional bra shopping.

Nisch said Jockey’s willingness to move toward to the edge with its store concept helped it create a “breakthrough moment” for the consumer. He said Jockey is able to expand its reach with a hub-and-spoke concept with pop-up stores that facilitate the one flagship store.

One observation by Jockey after opening the store last summer, was that many woman want to do the fitting in the privacy of their home, but then they talk a friend into coming to the store for a fitting and they tag along providing opportunities for another sale.

HERSHEY EXPERIENCE
Hershey has been involved in retail and experience branding for years creating a chocolate wonderland its home base in Hershey, Penn. The chocolate maker opened its seventh retail experience outlet last year in Las Vegas adding its global presence with other locations in Hershey, Penn., New York, Chicago, Niagara Falls, Canada, Shanghai and Dubai.

Nische said the latest Hershey Chocolate World store in Las Vegas inside the New York-New York Hotel and Casino aims to link consumers to the brand experience, going way beyond the typical candy store. The guests will enter an engaging and interactive space where they can taste new treats, personalize sweet gifts and create keepsake photo. The venue will open this summer.

The venue offers guests the change to create their own Hershey happiness through a variety of interactive experiences such as customized candy wrapper and personalizing Hershey Kisses plumes, according to a corporate statement.

RETAILER ACCEPTANCE
In the past, Spieckerman said retailers were hostile toward wholesale partners that attempted to create an owned retail presence, and particularly those that ventured into direct-to-consumer businesses. Things have changed.

“As I tell my brand marketing clients on a regular basis, brand ubiquity is the new exclusivity as media fragmentation and shoppers’ short attention spans favor omnipresence over limited distribution, Spieckerman said.

She adds that retailers have become “much more open to this concept, if only because they are embracing it themselves by making their private brands available to other retailers.”

“Retailers too, have evolved into multi-model companies and they understand the importance of wide brand presence. These days, exclusivity is a ticket to obscurity,” Spieckerman said.

She said now that “owned retail” is no longer an unmentionable with retailers, suppliers have an opportunity to share insights from their owned retail operations – and smart suppliers will do that. 

“Unfortunately, many companies operate their wholesale and retail divisions in silos, with wholesale teams not made privy to owned retail insights. Operating this way prevents preventing them from fully leveraging their multi-model assets,” Spieckerman added.

A secluded, green pasture, with beautifully groomed horses doesn't seem like an unusual scene for Northwest Arkansas until you start throwing around terms like "pony goal" and "chukker."

Non-traditional sports are nothing new to Bentonville, which already has leagues for cricket, rugby and lacrosse. The city-wide trend of incoming world culture took another step forward Thursday (May 29) when the Northwest Arkansas Polo Club celebrated its official ribbon cutting at a newly acquired field three miles east of the downtown business district.

Eight players and a handful of club supporters were on hand to take part in the festivities. Mayor Bob McCaslin attended the event and performed the ceremonial "first-bowl-in.”

"It has been a treat to watch this club come together and accomplish what they set out to accomplish, despite some of the bumps these fine people have had to endure along the way," said McCaslin. "Any time a new endeavor of this magnitude is bestowed on our community its a good thing."

This club sport is another way Bentonville is celebrating its diversity which is enhanced by the presence of Wal-Mart and its growing supplier base. The NWA Polo Club, which has eight members and counting, was the brain child of several equestrian lovers in the community who struck up a conversation around the water cooler at Wal-Mart.

No one has played a more instrumental role in bringing the club to life than president John Wilson, who has family ties to the game dating back to the 1920's, when his grandfather began breeding polo-ponies in Midland, Texas.

"The old saying about polo horses was if they weren't fast enough to be a race horse, they would try to use them for polo, but precise breeding has seen a shift in the types of horses we use today," said Wilson. "The biggest difference is in size, agility and stamina. Polo horses need to be shifty and have the ability to run for long periods of time.”

Polo horses are generally under 16-hands in size and can range in age from 4-to-20 years. Each horse is equipped with leg wraps and have their tails braided to protect against swinging mallets.

"Safety is the number one thing on my mind when I am mounted on the field," said Wilson. "We provide all the necessary protective gear like the shin-guards, helmets and gloves and while most of our players are experienced to some degree, newcomers are encouraged to come out and play as well."

Club co-founders Bob and Susan Koehler have a long history with the game, too. Bob is the club-pro and both coached and played in Colorado. The couple were involved in the sport for years and were desperate to bring polo with them after moving to Bentonville last year with Susan’s job at Wal-Mart Stores Inc.

"Bob and I have been heavily involved with the sport since we were kids," said Susan Koehler. "After we moved here from Colorado, polo was probably the thing we missed the most. Bob was still commuting back and forth to stay involved with his club. Having a new club in Northwest Arkansas is so huge for us. ... We have so many people to thank, from the Bradley's who own the land to the city of Bentonville and so many folks who helped make this happen."

The NWA Polo Club will hold matches every Sunday and practices on Thursdays at its new field off Coffee Price Road. The club is leasing the land from owner Derek Bradley. They are holding a tailgate-party on Fathers Day (June 15). The field, which covers roughly 300 yards in length, will also be used for other community events as well as club events. 

"We have events scheduled throughout the summer and are really looking forward to having the opportunity to use this field for whatever we can as a part of the community," said Koehler. "We hope to have around 16 members by this fall."

Kevin Gardner, vice president of the club, said he grew riding horses and played a little polo during a period when he lived in Dallas. Gardner also works at Wal-Mart’s corporate offices. 

“There is growing number of people in this area that love horses and it’s certainly cheaper to keep a horse here than in other places in the country. We are very excited about the opportunity to introduce this sport to people of all ages,” Gardner said.

The NWA Polo Club is a member of the U.S. Polo Association and the Great Plains Circuit. Koeler said the group will schedule matches with clubs in Springfield, Tulsa and Wichita, after the field work has been completed. 

“We need to level out the playing field some to meet USPA guidelines. That work is ongoing,” Koelher said.

More information about the Northwest Arkansas Polo Club can be found on the club's Facebook page.

There has been a lot of buzz about the new Arkansas Regional Innovation Hub set to launch later this year in North Little Rock. The public-private partnership is a model that its executive director said was not specific to just central Arkansas, but could work in other regions of the state, including Fort Smith.

Warwick Sabin, a Little Rock state representative who became executive director of the non-profit in September 2013, said the innovation hub is about helping entrepreneurs be successful at home in Arkansas by giving them the tools necessary to achieve success.

"The Arkansas Regional Innovation Hub is designed to promote more entrepreneurship and startup business development in Arkansas," he said. "And it does that by providing resources, equipment, tools, access to programming and networking opportunities and really trying to connect and align all of these entities that are doing good work in this area in our state."

It does that through four key elements — the Art Connection, the Launch Pad, the Silver Mine and the STEAM Lab. ARHub.org explains each element:
• The Art Connection: "The IN place for North Little Rock teens, with studios where they can put their artistic abilities into profit mode."
• The Launch Pad: "The IN place for makers, tinkerers, inventors, innovators and even small and big companies looking for a cool place try out ideas and make new things."
• The Silver Mine: "The IN place for incubation, acceleration and co-working, and for finding all the support you need to morph great ideas into profitable business ventures."
• The STEAM Lab: "This super hot place IN the middle of the Argenta Innovation Center (the ARHI's headquarters in North Little Rock), incorporates elements of science, technology, engineering, arts and mathematics. It's perfect for training, networking and hobnobbing with other makers, doers, engineers and artists."

The ARIH is similar to other business incubators across the nation, and according to Sabin — an Arkansas alum who earned his masters degree at Oxford University before returning to the Natural State — the goal is to retain Arkansas talent as well as attract new talent to the state.

"And one of the biggest problems we've had over the years is keeping our most talented people in this state because either they feel like they don't have access to educational opportunities, or they feel like they don't have access to capital and they have to go outside the state to get the investment capital they need to make their idea a reality,” Sabin explained. “But if we can create an environment here where through education and access to resources, people are developing their native talents and then we're able to retain them because we're giving them the opportunity to create a business or work with a company that does what they're interested in, when they're successful, that will serve to attract talent and that virtuous cycle continues."

Overall, Sabin said if the ARIH is successful with individuals who may join the non-profit and make use of its resources, it will do more than benefit ARIH and participating entrepreneurs, it will be a boon to the Arkansas economy.

‘WHAT PROGRESSIVE CITIES DO’
And it is that long-term benefit to the economy that has Fort Smith business and community leaders interested in seeing something similar spring up in the western Arkansas region.

Steve Clark, founder and CEO of Fort Smith-based Propak Logistics, said cities like Fort Smith cannot ignore what other cities are doing to attract business, including the development of business incubators such as the Innovation Hub.

"I think I'd approach it from the angle that cities that want to refer to themselves as progressive, they do what progressive cities do," he said, adding that the challenge is getting the right group to back such an idea locally.

"The difficulty is where does something like this fit? Is it the Chamber? I can argue it doesn't fit there. Their job is to recruit existing businesses to Fort Smith. Does it fit at the university? Not really. They find themselves in the theoretical and not the practical."

Sabin said the ARIH was its own entity, but had also formed partnerships with a variety of groups, namely Arkansas Manufacturing Solutions. Additional funding and support has come from the Wingate Foundation, Delta Regional Authority, the Arkansas Economic Development Commission, as well as the North Little Rock Economic Development Commission. He also said the key is unity instead of division.

"Even if you're a community that doesn't have a lot of resources, you can accomplish things by forging partnerships across mutual interests that exist among organizations, municipalities, counties and states. I think there's an imperative to do that because we need to make the most of what we have. Whatever I think of Arkansas, I think that we're a state of 3 million people, which is smaller than most metropolitan areas around the country. And we cannot afford to divide ourselves up on the basis of geography or any other distinctions that may exist. We work a lot better when we take advantage of all the resources that exist within the state, when we hold hands and work together."

POTENTIAL OBSTACLES
While Fort Smith businessmen are interested in trying to get something like the ARIH launched in the region, they know it will not be an easy task. The memory of the region's last effort at a similar effort at the University of Arkansas at Fort Smith still lingers.

Dr. Paul Beran, chancellor of UAFS, acknowledged the lack of success with the university's now-shuttered Innovation and Entrepreneurship Center and said efforts in the last few years to re-launch the IEC have been unsuccessful.

"The vision was that somehow the IEC was going to be a generator of ideas and thus (bring investment in) new small business thus jobs, but it never really panned out that way. Frankly, as far as the university's piece in this, I did a very extensive community-wide conversation about this two years ago in which we talked about the IEC and what it would take to recreate the IEC in a more meaningful way for the community. And frankly, the conversation stopped and there has never been any more mention of it."

He said success for a business incubator depended on more than one entity to house such a facility and to fund it, as well, and he said so far, no one has stepped up to the plate.

"Always follow the money and you will find why something's happening or why it's not happening," he said.

LEADERSHIP NEEDED
Tim Allen, president and CEO of the Fort Smith Regional Chamber of Commerce, spoke along the same lines and said to his knowledge, there's been no meaningful action to move forward with any proposals or plans for any sort of business incubator in the region.

"We do need to pursue starting up some sort of innovation system and I've heard of some different meetings about getting it going, but I haven't seen anyone willing to step up and get it going,” Allen said.

Clark said while that may be true at this point, it was not due to a lack of will.

"Everything rises and falls on leadership. Typically these are a cooperative arrangement between public and private (entities). I know there is interest with private. I can't speak for (the public sector). ... I think there's definite interest. Do I think that the business community will step up? I absolutely believe the business community will step up."

As for timing, Beran — who said the university would welcome efforts to create a business incubator to the area — cautioned individuals expecting a group of leaders to step up tomorrow to create an organization out of nothing, calling it a "pollyannish approach" to business innovation.

That said, Allen "would like to think that it would be sooner rather than later."

"However, I'm not quite sure I know the answer to the question. Maybe we'll get to the point where we're not willing to settle for the status quo. Maybe we'll realize that we're losing some of our young and creative minds and maybe when we get to that point, people will say it's time to do it and do it now. I'm not sure if that's in the next year or two or five. It's happening all around us and I think we should explore the opportunity more and have some serious talks about it."

Clark said whatever discussions there are about how to launch in the Fort Smith area a business incubator similar to the Innovation Hub, the region does not have the time to wait.

"I think in the end, the message is (that) we can't be disappointed when we don't get what we want if we're not doing the things necessary to be heard. We need to emphasize that Fort Smith is willing to invest in the infrastructure for a healthy entrepreneur ecosystem. If we want to be seen as relevant in terms of talent, (attracting) and keeping our best and brightest, I think we have to find our position on this field as it relates to entrepreneurship, not just saying we're going to help for the sake of entrepreneurship, but a definitive plan and definition of success."

The filing period for positions on the Fort Smith Board of Directors closed Thursday (May 29) at noon with only one race contested.

City Director/Vice Mayor Kevin Settle and Mayor Sandy Sanders had no opponents in their re-election bids, and former Rep. Tracy Pennartz will not have a challenger in her run for the position five at-large city director position. The position five seat opened up when City Director Pam Weber announced she would not seek re-election after one term on the Board.

The only opposed race is between former City Director Don Hutchings and Parks Commissioner Sherry Toliver, who both are running to replace retiring City Director Philip Merry. Merry will hold the position seven at-large seat until Dec. 31.

Reached for comment Thursday, Sanders said he was excited to know he will be serving another four years in the mayor's office.

"It feels good, naturally, to have the opportunity to serve another four years and there are a lot of things I think we need to focus on with the remainder of this year and the next four years."

The mayor said his focus this year and in his next term will continue to be economic development and making Fort Smith a place that is attractive for jobs and for students graduating from college and looking to start their careers.

"I think we need to focus on things more attractive to that younger, attractive population," he said. "We need to continue to work with the governor and the Chamber (of Commerce), the AEDC (Arkansas Economic Development Commission) on projects."

Another focus in the next term will be preparations for the city's 200th anniversary at the end of 2017, he said.

Pennartz said she looks forward to getting back to elected office after being term limited out of the state House of Representatives and losing a race for state Senate in 2012.

"I'm looking forward to another opportunity to be of public service. I have a strong belief in public service and of course (I am) looking to the future of Fort Smith, what we can do policy-wise that will propel us into these next years. I'm looking forward to working on whatever issues come before the Board."

As the year finishes out through the next seven months, Pennartz said she would focus on diving into the issues as she begins to be an observer at the Board meetings, study sessions and other activities involving the Board. Pennartz said while there is only one contested race, she did not take that as a lack of engagement on the part of Fort Smith's citizenry.

"I guess from one perspective that's a complement to my prior public service and people's feeling that I would do a good job for the city and them as a director."

Sanders said while there may only be one competitive race, the city's residents are still engaged and participating in shaping the future of the city.

"I think we have a lot of people who at some point in their life may run for the Board, but they have young families and say to themselves, 'OK, do I want to go to a Board meeting or watch my son play baseball or my daughter play volleyball?' People may be interested, but the timing may not be right now," he said.

He said people often find themselves serving on other city boards or commissions that are less of a time commitment before choosing to run for the Board later on.

In the race to replace Merry, Sanders declined to make endorsements and said instead that he would be ready to work with whoever was victorious on November 4.

"I know them both, I know them well. There is no endorsement because I'll need to work with all seven members of the Board."

Settle did not respond to comment for this story.

The local construction sector in Benton and Washington counties is building new roads, trail infrastructure and several large commercial projects, but new home starts declined sharply in April.

The four largest cities in the region issued a combined $45.209 million in new commercial and residential building permits last month, down 24.5% from the $59.923 million reported a year ago.

Residential permits for new home starts among the four cities were valued at $34.539 million, down 11.7% from the $39.116 million in the same month last year. During April, the four cities issued a combined 142 permits for new homes. Fayetteville saw a 81% increase in the number of new residential permits at 49. New home starts (29) were off by 58% in Bentonville, compared to a year ago. The cities of Rogers and Springdale each reported steady permit numbers with a year ago.

April Residential Permits (New Construction)
Bentonville: 29 homes at $8.471 million, down 57%
Fayetteville: 49 homes at $12.825 million, up 113%
Rogers: 40 homes at $7.044 million, down 4%
Springdale: 24 homes at $6.199 million, up 5.24%

Brent Hanby, co-owner of Encore Flooring & Building Products in Springdale, said his business is bustling.

“Every homebuilder and remodeler I speak with tell me they are swamped with work for the next 120 days or so. I know the new home inventory is pretty low based on the last numbers I saw,” Hanby said. “I look for this momentum to carry through the back-half of the year.”

Paul Bynum, analyst with MountData.com, reports that there were 393 new homes listed for sale in the local multiple listing service as the end of March. The new home inventory was up from 273 a year ago. Bynum estimated 5.9 months of supply in new inventory at the end of the first quarter. He said that reading is up from 4.5 months a year ago because there are more new homes for sale. 

Bynum also noted that a balanced market occurs when there is between five and six month supply of homes. He said the new home market was sound heading into the month April in terms of sales.

“Through the first quarter of this year new construction had a sales volume of $48 Million, up 3% over 2013. Units sold totaled 201, up 6% and the median sale price is $217,044, down 3% from 2013,” Bynum said. 

Local builders told The City Wire earlier this year that they expected to keep pace with 2013 numbers. They continue working to get some spec homes finished for showing, because the homes were selling faster than they could finish them. Hanby said labor and ready-to-build-on lots are in shorter supply in the residential sector given there are more builders working this year. 

“I am hearing some developers began to plan for new subdivisions in desirable areas because the available lot supply has been absorbed. I continue to be amazed with all the new construction I see out toward Goshen in the Waterford Estates subdivision. It’s been years since this area has been this active,” Hanby said.

Waterford Estates features custom homes beginning at $280,000 built by Riggins Construction. The brick homes range in size from 2,300 square feet to 3,000 square feet with custom details.

COMMERCIAL SECTOR
The local commercial construction sector continues to show signs of new life after several years of relatively slow growth.

Bentonville has three new commercial projects permitted last month valued at $4.201 million. The projects include a new Walgreens drug store on Walton Boulevard, a strip shopping center along South Walton Boulevard and a small industrial office building. Permits issued by Bentonville in April of last year totaled $7.748 million.

Fayetteville reported one new commercial permit in April, a new CVS Drug store under construction at 2402 N. College Ave. This project is valued at $1.461 million. A year ago, the city did not issue commercial permits in April.

Springdale had two new permits for commercial use issued last month. Popeyes Chicken is under construction on West Sunset, near the entrance to Arvest Ball Park. O’Reilly Auto Parts obtained a permit for work valued at $807,905 for a new store at 3049 E. Robinson Ave.

Rogers issued a handful of new commercial permits totaling $3.869 million in April. Permits were down from $9.536 million in the year-ago period. A large industrial warehouse located at 1300 W. Hudson Road was valued at $1.4 million. The Mercy Clinic at 613 N. Second St., has a permit value of $1.34 million. There was also five permits for multifamily housing units to be built at 2007 S. Dixieland Road.

The Health Department recently issued the following permits for new businesses planned in two-county area. These permits precede the city permit step by roughly three months.
Kum & Go Store — Main Street & Broyles in Farmington
Dunkin Donuts — 1805 W. Martin Luther King Boulevard, Fayetteville
Bone Heads Restaurant — 1404 Moberly Lane in Bentonville.
Walmart Neighborhood Market — East Central Avenue in Centerton
Planet Fitness — 216 Westpark Drive, Bentonville
Crossings Nail Salon — 2600 W. Pleasant Crossing in Rogers
SNAP Fitness — 2600 W. Pleasant Crossing in Rogers

Fort Smith-based ArcBest Corp. – formerly known as Arkansas Best Corp. – is expanding its corporate presence in the region with a $30 million plan that will see the construction of a new office building and data center at Chaffee Crossing and the addition of an estimated 975 corporate jobs by 2021.

Officials with the transportation holding company and state and local officials gathered Friday (May 30) afternoon at the Fort Smith Convention Center to make the announcement. Executives with ArcBest said holding company corporate offices and ABF Logistics employees will locate in a new office building planned for construction at Chaffee Crossing near the scenic area of the McClure Amphitheater.

“We need room to expand,” ArcBest President and CEO Judy McReynolds told the large crowd gathered at the Fort Smith Convention Center for the announcement.

Walter Echols, a vice president at ArcBest and head of real estate for the company, said the new corporate building could be between 120,000-square-feet and 150,000-square-feet. Designs are in early stages, and he is not sure if the structure will be a basement and three floors or a basement and four floors. Part of the design goal is to build a structure that blends in with the location at Chaffee Crossing near the scenic area of the McClure Amphitheater.

“We really want to tie it in aesthetically to the ridge line there,” Echols explained.

Construction on the new office complex is set to begin this fall.

The company will retain its high-profile, 195,000-square-feet corporate headquarter building on Old Greenwood Road in Fort Smith. That facility, which opened in early 1995, is expected to provide space for the consolidation of ABF Freight and ArcBest Technologies offices. Moving corporate and logistics jobs out of the existing corporate headquarters will allow room for expansion at ABF Freight and ArcBest.

“That anticipated growth, combined with space enabled by the new facility, supports the creation of 975 new jobs in Fort Smith through 2021,” noted the ArcBest statement.

There are now between 1,300 and 1,400 ArcBest corporate jobs in the Fort Smith area. 

‘BETTER THAN MIDDLE-CLASS JOBS’
Grant Tennille, executive director of the Arkansas Economic Development Commission, attended the announcement event.

“Two days, two great announcements in Fort Smith,” Tennille said in his opening statement, referring to the news on Thursday (May 28) that Georgia-Pacific is investing $40 million in its Fort Smith Dixie plant.

Tennille said the investments by ArcBest and Georgia-Pacific show a faith in the people and institutions of the region, and are proof that the regional economy “can come back from tough times.” He said the regional economy will benefit greatly from the “better than middle-class jobs” – in terms of salary and benefits – that will come from the ArcBest expansion.

“The best way to grow the economy is to partner with your existing companies,” Tennille said, adding that he believes the region has the workforce and the educational institutions to provide the high-skill jobs needed to be competitive in job recruitment and retention.

Tennille also confirmed that ArcBest consolidating its “intensive” data center operations in Fort Smith sends a message to the corporate world that the ever-changing data-driven environment can find a home in Arkansas.

“We’re supporting some of the most data-intensive environments in Arkansas ... that’s a fantastic message for the state,” Tennille said.

With similar “big data” operations with Bentonville-based Wal-Mart Stores Inc., Springdale-based Tyson Foods and Lowell-based J.B. Hunt, he said the challenge of Arkansas leaders is in providing the educational offerings to feed talented people into those jobs.

Tim Allen, president and CEO of the Fort Smith Regional Chamber of Commerce, said the ArcBest decision “is a testament to Fort Smith’s diverse economy.”

“They (ArcBest) know first-hand that quality of place, affordability and the tremendous asset we have in (the) University of Arkansas – Fort Smith make Fort Smith a place worth investing in,” Allen said in a statement.

HISTORIC GROWTH
Arkansas Best began as a small local freight hauler –  OK Transfer – in 1923 operating in the Fort Smith area. With a market cap of around $1.12 billion, the company now employs more than 11,000 and has grown organically and through acquisitions to provide global shipping and logistics services. Fort Smith attorney Robert A. Young Jr. bought the a small regional trucking company in 1951 and through several acquisitions grew the company to a national freight carrier.

“He would have been excited about it,” ArcBest Board Chairman Robert A. Young III, said when asked what his father, Robert A. Young Jr., would have thought about the expansion news. “And he would have loved to see the growth that has allowed this to happen. ... I’ve often said I’d like to have him back for 15 minutes to see it now.”

Young III, also said he father would be pleased to see company diversify with logistics, moving operations and other non-asset (non trucking) businesses.

“He would have understood that thoroughly. He was very much a forward thinker,” Young said.

SUBSIDIARY GROWTH
ArcBest’s largest subsidiary is less-than-truckload carrier ABF Freight System. The non-asset subsidiaries are Panther Premium Logistics, ABF Logistics, FleetNet, ABF Moving and ArcBest Technologies (formerly known as Data-Tronic.). ArcBest officials have said growth in the non-asset businesses are necessary to diversify the company’s revenue stream and to help reach a goal of $3 billion in revenue in 2014.

The non-asset based businesses in the ArcBest portfolio generated $4.459 million in operating income during the quarter, a big improvement over the $134,000 during the first quarter of 2013. Total revenue during the quarter was $577.904 million, 10.98% better than the first quarter of 2013 and well ahead of the consensus estimate of $551.35 million.

However, the company reported a loss of $5.2 million during the quarter, thanks primarily to an unusual number of severe winter weather days. However, the loss was better than the $13.395 million loss the company recorded in the first quarter of 2013. The tough first quarter follows a positive financial performance in 2013. Net income during 2013 for ArcBest was $15.8 million, much better than the $7.7 million loss in 2012 and the most the company has earned in a year since 2008.

Shares of ArcBest (NASDAQ: ARCB) closed Friday (May 30) at $42.77, down $1.01. During the past 52 weeks the price has ranged from a $44.63 to a $17.68 low.

ARCBEST PRESS RELEASE
Fort Smith, Ark., May 30, 2014 – ArcBest Corporation (Nasdaq: ARCB) today announced that it is under contract to purchase 40 acres of land at Chaffee Crossing, Fort Smith, Ark., for construction of a new corporate headquarters facility as the company continues plans for significant growth at all of its operating subsidiaries.

ArcBest, a holistic provider of transportation and logistics solutions, has exceeded the capacity at its current Fort Smith general office on Old Greenwood Road and has been leasing supplemental office space at a separate location since early 2012. The company has since outgrown the capacity at that location, which currently houses the ABF Logisticssm subsidiary personnel, as well.

ArcBest has previously announced its goal to grow total corporate revenue to $3 billion by the end of 2015, with $1 billion coming from its emerging businesses. In 2013, revenue grew 11 percent to $2.3 billion.

“As one of the area’s largest corporate employers with a bright future and growth plans ahead of us, we are excited to announce construction of this new facility in Fort Smith,” said ArcBest President and CEO Judy R. McReynolds. “With plans for growth at all of our operating companies, including ABF Freightsm, ABF Logisticssm, Panther Premium Logisticssm and FleetNet America®, it is important that we develop additional space to accommodate these expanding businesses. Our decision to build a new facility in Fort Smith for the ArcBest and ABF Logistics companies underscores our long commitment to this area, and we are grateful for the commitment from the city, the Fort Smith Chamber of Commerce and the state to help us meet our needs.”

Future plans include relocating ArcBest corporate and administrative functions and ABF Logistics personnel to the newly constructed office building which is anticipated to be smaller than the existing 195,000-square-foot corporate center facility on Old Greenwood Road.

ABF Freight System Inc., the company’s flagship subsidiary, is expected to remain located at the larger existing facility, along with ArcBest Technologies, the company’s IT solutions group. This will allow for minimal disruption to operations at these organizations when construction work gets underway at the Chaffee Crossing location. In addition, the eventual relocation of ArcBest and ABF Logistics employees creates room for growth and expansion at ABF Freight and ArcBest Technologies at the existing facility.

That anticipated growth, combined with space enabled by the new facility, supports the creation of 975 new jobs in Fort Smith through 2021.

“This announcement underscores that Fort Smith is a great American city from which to run a business with solutions that span the globe,” said Grant Tennille, executive director of the Arkansas Economic Development Commission. “We thank ArcBest for expanding their Fort Smith headquarters, which will benefit the region for years to come, and for making a vote of confidence in the strength of Sebastian County’s workforce through this action.”

Fort Smith Mayor Sandy Sanders said the new facility marked another important note in the long history for ArcBest in Fort Smith.

“For 90 years ArcBest has been an outstanding Fort Smith company, providing substantial employment opportunities for people in this area, and throughout the nation,” said Mayor Sanders. “This announcement is not only great news for the company, but for Fort Smith and the many people who will gain jobs as a result of this continued growth.”

Officials from the Chamber of Commerce also applauded the announcement.

“The ArcBest announcement today is a testament to Fort Smith’s diverse economy,” said Tim Allen, CEO and President of the Fort Smith Regional Chamber of Commerce. “ArcBest is expanding in Fort Smith because they are committed to the River Valley, as they have been for more than 90 years. They know first-hand that quality of place, affordability and the tremendous asset we have in University of Arkansas – Fort Smith  make Fort Smith a place worth investing in. ArcBest is a long-standing pillar of this community. It is refreshing to know that they have been a significant part of Fort Smith’s history and will continue to be part of our future.”

Gov. Mike Beebe typically travels to a community when a $30 million deal that could create almost 1,000 jobs is being announced. But he did not attend such an announcement Friday in Fort Smith because the company expanding in Fort Smith is also the company that may move up to 400 jobs from North Little Rock to Memphis.

Officials with Fort Smith-based ArcBest Corp. announced Friday (May 30) the expansion of their corporate presence in the region with a $30 million plan that will see the construction of a new office building and data center at Chaffee Crossing and the addition of an estimated 975 corporate jobs by 2021.

News of the corporate expansion in Fort Smith comes as the company is considering consolidation of a majority of its North Little Rock terminal operation to a planned $20.5 million terminal expansion in Memphis. The move could cut up to 400 jobs from the North Little Rock operation.

As part of a cost-cutting move, ArcBest consolidated or closed eight terminals in 2013 and did the same with 22 terminals in the first quarter of 2014. ABF Freight now operates with 247 freight service centers.

“While there can be no assurances, annual expense savings associated with these network changes, which will fluctuate based on business levels and the profile and geographic mix of freight, are currently estimated to be in a range of $10 million to $12 million,” the company noted in its first quarter 10-Q filing with the U.S. Securities and Exchange Commission.

Grant Tennille, executive director of the Arkansas Economic Development Commission, attended the announcement in Fort Smith, and told The City Wire that it would have been “odd” for Beebe to be in Fort Smith as North Little Rock faces a major job loss. Tennille said the state is fighting to keep the jobs in Arkansas.

"Over the last year, ArcBest has either been consolidating or closing about two dozen of these terminals around the region," Tennille said in a Friday morning television interview with Roby Brock of Talk Business & Politics. "They have looked at whether or not the math makes sense for them to close North Little Rock and move those operations to Memphis. They have not made a final decision. We are working closely with them and have been talking about putting a retention package on the table to keep them here."

“The Governor feels fairly strongly that he represents all the constituents of Arkansas ... and he felt like it would just be odd” to be in Fort Smith celebrating new jobs while central Arkansas may soon lose up to 400 jobs, Tennille told The City Wire.

Tennille stressed that ArcBest was “not being punished” for its plans to move the jobs, and that Beebe realizes ArcBest has to make decisions that are in the best interests of the company and its shareholders. He also said Beebe is supportive of several efforts that may result in creating more jobs in the Fort Smith area.

“I am completely certain ... that I’ll be back here before the end of the year,” Tennille said.

A statement from Beebe’s office to Talk Business & Politics – a content partner with The City Wire– confirmed Tennille’s assessment of why Beebe did not attend ArcBest’s announcement.

"While we’re excited about ArcBest’s new headquarters and new jobs in Fort Smith, we’re still monitoring the potential (and unrelated) shutdown of another ArcBest-owned facility in North Little Rock," said Beebe spokesman Matt DeCample. "With those employees facing possible layoffs, Governor Beebe felt it wouldn’t be appropriate for him to personally be part of today’s announcement."

In the interview Talk Business & Politics, Tennille said the "real story" is the explosion of growth in technology jobs emerging from existing Arkansas firms not traditionally thought of as data driven.

"The real story is we keep seeing these businesses that historically we thought of as one thing – a trucking company – it's getting ready to hire 1,000 data analysts. Data is driving everything," said Tennille, who hinted that more announcements of this caliber may be in the works.

More than 40 state business leaders met with Gov. Mike Beebe at the Governor’s mansion last week to discuss job openings, skills gaps, and the need for more coordination among workforce agencies, schools and private enterprise to lower unemployment and thwart a workforce exodus expected in the coming years.

The primary concern is the state’s manufacturing base, which currently employs about 154,000 workers as of April 2014.

The national average for manufacturing wages is roughly $40,000 a year, while the state average is $36,000. However, there are a number of manufacturing incomes in Arkansas that can reach the high five-figure or low six-figure range.

Randy Zook with the Arkansas State Chamber of Commerce, who organized the Governor’s mansion meeting, contends that Arkansas companies have tens of thousands of job openings, but not enough workers to match them. He suggests that the situation could worsen if major problems aren’t quickly addressed.

There has been a rebirth in U.S. manufacturing in recent years, although Arkansas’ manufacturing sector has been sluggish compared to other states. New manufacturing jobs are less blue-collar and more high-tech in nature; however, traditional manufacturing job openings are expected to grow due to forthcoming retirements from the baby boomer generation.

Other factors such as disinterest from younger generations, a lack of key skills, and fewer job candidates have Zook and manufacturers clamoring for more coordination between education/training programs and existing industries.

Earlier this year in the state’s fiscal session, State Sen. Jane English secured a commitment from Beebe and her fellow legislators to overhaul Arkansas’ workforce training efforts in exchange for her vote on the Private Option renewal funding. Two months later, officials say progress is being made, but nothing concrete has been presented publicly in terms of change.

Privately, there are worries that government bureaucracy combined with self-preservation among the state’s educational institutions — from high school through college — can’t pivot quickly enough to address a workforce situation looming towards a “crisis” point.

“Businesses’ role is to communicate needs clearly. The state’s role is to be responsive,” says Arkansas Economic Development Commission director Grant Tennille, who was present at the mansion meeting.

Talk Business & Politics asked Tennille, Zook and the two major party candidates for Governor if the state 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.

Tennille said he thinks the current construction of the Governor’s Workforce Cabinet are “in lockstep” to make the changes promised to Sen. English during the fiscal session. He is not sold on the notion of a workforce czar.

“I hesitate to introduce new bureaucracy to anything,” he said. “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 policy makers at the 10,000-foot level and the people on the ground locally. I think that’s where the meat of this problem lies.”

Zook said the idea has merit, particularly if there is going to be a fast transition.

“[It] depends on how fast you want things to get better,” said Zook. “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.”

Mike Ross, the Democratic candidate for Governor, has proposed a reorganization of the Governor’s Workforce Cabinet, which includes AEDC, the Department of Workforce Services, Department Career of Education, Department of Higher Education, and other agencies.

Ross would rename the group as a “Cabinet for Economic Development” and previously said he would have John Burkhalter, a businessman and the Democratic nominee for Lt. Governor, as the chair of the effort if Burkhalter is elected.

“Instead of having a single czar, Mike Ross has already announced his plan to create the Governor’s Cabinet for Economic Development, a statewide coordinated effort made up of key agency representatives that will provide better coordination, increased communication and a stronger, more unified strategy for our state’s workforce services and economic development efforts,” said Ross spokesman Brad Howard. “This alliance will bring together all of our resources on a regular basis to help the state of Arkansas become more efficient, more effective and more productive – and create a better trained workforce that will help Arkansas attract more and better-paying jobs.”

Howard said Ross plans to announce additional workforce services and economic development plans in the coming weeks.

Ross’ rival, Republican gubernatorial nominee Asa Hutchinson has proposed a restructuring of the state’s workforce efforts through eight regional councils. Hutchinson’s plan would require high schools, two-year colleges, and local employers to assess jobs needs across their regions and coordinate a plan of action for educating potential workers for those available jobs.

“As I announced in March, increased emphasis on workforce training is essential to industrial recruitment and job growth in Arkansas. My plan includes streamlining workforce education to reduce duplication and to make sure tax dollars are targeted to education that matches the job creation priorities of the various regions of our state,” Hutchinson said.

“I will work with the legislature to meet these goals, but I would not designate a ‘workforce czar’ or assign the leadership role to the Lt. Governor. The Governor is the right person to lead this effort toward effective workforce education,” he added. “Improving workforce education is such a priority that the direct leadership of the Governor is essential to success.”

The federal Environmental Protection Agency announced a far-reaching and controversial plan Monday (June 2) that it says will cut carbon dioxide emissions 30% by 2030 from 2005 levels, a move that would effectively limit Arkansas’ and the nation’s reliance on coal-fired electricity generation.

President Barack Obama’s new  “Clean Power Plan,” however, will include an option that allows Arkansas regulators and stakeholders more time to develop and submit a workable plan beyond the earlier announced June 2016 deadline – a move that Entergy Arkansas and the Arkansas Electric Cooperative Corp had requested.

In announcing the new plan on Monday morning, the EPA said the new guidelines would move the U.S. toward a cleaner environment and fight climate change while supplying Americans with reliable and affordable power.

"Climate change, fueled by carbon pollution, supercharges risks to our health, our economy, and our way of life.  EPA is delivering on a vital piece of President Obama's Climate Action Plan by proposing a Clean Power Plan that will cut harmful carbon pollution from our largest source – power plants," EPA Administrator Gina McCarthy said in a news release.

Coal-fired plants now supply nearly 53% of Arkansas’ electricity demand – relying entirely on coal deliveries via railcar from Wyoming, according to U.S. Energy Information Administration.

ARKANSAS REACTION
Duane Highley, president of the Arkansas Electric Cooperative Corp., said Monday that the EPA plan will result in higher utility rates in Arkansas.

“We are disappointed that this EPA rule will reduce our use of coal, which is our most economical and reliable fuel to generate electricity,” said Duane Highley, president and CEO of AECC. “Although the proposed rule leaves the precise implementation details to the states to develop, the inevitable result will be the use of more expensive fuels, such as natural gas.”

The AECC is the wholesale supplier to 17 regional electric distribution cooperatives in Arkansas that have more than 500,000 customers.

Highley also said the EPA plan could impact utility reliability.

“This past winter's experience highlighted many reasons why power generation should not put all of our reliability eggs in the natural gas basket,” Highley said in a statement. “There were gas plant failures, pipeline freezes and wholesale natural gas supply disruptions. Our nation needs and deserves a diverse energy supply portfolio to keep the lights on. By reducing the amount of coal in our generation mix, prices will go up and reliability could go down.”

U.S. Sen. Mark Pryor, D-Ark., who is locked in a close re-election battle with U.S. Rep. Tom Cotton, R-Dardanelle, criticized the EPA plan.

“I have serious concerns that the EPA’s proposal will undermine the affordable and reliable electricity Arkansans currently enjoy. I will continue to speak with Arkansas stakeholders to gauge how this rule could impact our state’s economy and jobs,” Pryor said in a statement. “Last week, I asked the EPA to extend the comment period once this proposal was released. I’m pleased this request was granted, and I would urge consumers, businesses and utilities to make their concerns heard.”

Not surprising, the EPA plan also was criticized by U.S. Sen. John Boozman, R-Ark.

“President Obama’s proposed regulations for power plants will hurt Arkansas families, farmers and businesses, without providing any significant benefits. Congress rejected the President’s cap-and-trade policy, so now he is bypassing the will of the legislative branch and imposing a similar plan bit by bit. President Obama says it won’t cost much and that if you like affordable energy, you can keep affordable energy, but like his other promises, we know that actions speak louder than words,” Boozman said in a statement. “The U.S. Chamber of Commerce predicts that the President’s plan will shrink the economy by at least $51 billion and destroy more than 200,000 jobs each year between now and 2030. This is another example of bureaucrats trying to control climate from their desks in Washington, with no concern for the pain it will cause.”

COAL USE HISTORY
In 2013, U.S. coal mines produced just fewer than one billion short tons of coal, the lowest output level since 1993. More than 90% of this coal was used by U.S. power plants to generate electricity, EIA statistics show. Yet, while coal has been the largest source of electricity generation in the United States for more than 60 years, its annual share of total net generation declined from nearly 50% in 2007 to 39% in 2013 as some power producers switched to more competitively priced natural gas.

According to the EPA, the new proposal will take these four steps to reach the president’s carbon emission goal by 2030:
• Cut carbon emission from the power sector by 30% nationwide below 2005 levels, which is equal to the emissions from powering more than half the homes in the United States for one year;
• Cut particle pollution, nitrogen oxides, and sulfur dioxide by more than 25% as a co-benefit;
• Avoid up to 6,600 premature deaths, up to 150,000 asthma attacks in children, and up to 490,000 missed work or school days—providing up to $93 billion in climate and public health benefits; and
• Shrink electricity bills roughly 8% by increasing energy efficiency and reducing demand in the electricity system.

According to the EPA, the new plan will be implemented through a state-federal partnership under which states identify a path forward using either current or new electricity production and pollution control policies to meet the goals of the proposed program. The proposal provides guidelines for states to develop plans to meet state-specific goals to reduce carbon pollution and gives them the flexibility to design a program that makes the most sense for their unique situation, the EPA said.

Also, states will be able to choose the right mix of generation using diverse fuels, energy efficiency and demand-side management to meet the goals and their own needs, federal officials said.

“It allows them to work alone to develop individual plans or to work together with other states to develop multi-state plans,” the EPA said.

Also, federal officials said today’s proposal includes a flexible timeline for states to follow for submitting plans to the agency—with plans due in June 2016, with the option to use a two-step process for submitting final plans if more time is needed.  States that have already invested in energy efficiency programs will be able to build on these programs during the compliance period to help make progress toward meeting their goal, the EPA said.

ARKANSAS IMPLEMENTATION MOVES
John Bethel, executive director of the Arkansas Public Service Commission, said state regulators with the PSC and Arkansas Department of Environmental Quality will begin holding stakeholders meeting later this month to begin developing plans on the new EPA regulations.

Originally, the EPA set the deadline to finalize the standards by June 1, 2015. States, including Arkansas, were required to submit their implementation plans to EPA by June 30, 2016. Given today’s announcement, those dates could now change.

Teresa Marks, director of the Arkansas Department of Environmental Quality, said her department and PSC officials have scheduled a meeting to discuss the EPA proposal on June 25 with about 20 stakeholder groups representing utilities, state agencies, environmental advocates, energy efficiency experts, consumers and other interest parties. 
 
The Arkansas environmental chief said she was pleased state regulators will have the flexibility to adapt a plan that is going to fit the needs of Arkansans. She added that her department has the unenviable task of briefing the groups about the controversial guidelines.

“I think we have a lot of work ahead of us to determine what options or combinations of options will work best here in Arkansas,” Marks said of the 645-page proposal. “We will be pouring through it over the next several weeks.”

Wal-Mart shareholders week is a global affair with 5,000 delegates visiting from 27 countries and every state where Wal-Mart operates under 71 banners. The Wal-Mart representatives began arriving at Northwest Arkansas Airport on Saturday, and the company estimates that 14,000 will attend Friday’s (June 6) shareholders meeting.

The group from Massmart, Wal-Mart’s South African venture, sang, danced and waved their national flags as they made their way down the escalator into the main lobby area at the airport on Saturday. This is third year Massmart employees have traveled to Bentonville for the annual meetings.

“The associates chosen to attend have a full week of activities. The majority of them are arriving on Sunday (June 1). They are housed at the University of Arkansas and they will attend meetings and tour the area ahead of Friday’s annual shareholder event,” said Kayla Whaling, spokeswoman for Wal-Mart.

Wal-Mart said there will be 30 buses of delegates and media that will be shuttled around the region throughout the week. They visit stores, the Walmart Museum, the Bentonville Square, the University of Arkansas and other areas of interest.

Bentonville, Fayetteville and Rogers see the majority of the economic benefit from the annual event that will draw around 14,000 to Fayetteville for Friday’s (June 6) shareholder meeting at Bud Walton Arena.

The University of Arkansas expects to earn about $1.26 million for the week. That breaks down to $436,000 from the use of its dorm facilities, according to Steve Voorhies, manager of media relations at the UA. He said there will be 4,500 Wal-Mart guests staying on campus, as the retailer has reserved 2,250 room at a nightly rate of $28.

Food services for the week will also rake in about $500,000. Voorhies said there are other service fees that the UA collects for the week. Based on last year, he expects those services to total approximately $325,000 as follows:
• Police Department – $102,704;
• Facilities Management – $721;
• Parking and Transit – $106,571; and
• Athletic Department – $115,873.

He said the amount paid to the UA Athletic Department is strictly reimbursement of expenses because there is no rental fee charged.
 
“When you talk about benefit to the university it’s really not the dollars. It’s the exposure we get as people from all over the country and all over the world – shareholders and associates who spend time on campus and in Northwest Arkansas. They go away with a fresh perspective on the university, the region and the state,” Voorhies said.

Kathy Deck, director for the Center for Business and Economic Research at the University of Arkansas, said the biggest draw in terms of traffic is for the Friday meeting at Bud Walton Arena. However, she said it is unknown know how many people traveling here and plan for an overnight stay. She said the 5,000 or so Wal-Mart workers will be here for the full week, but because they stay at the university, hotels don’t see the benefit.

Between 50 and 100 members of the media also attend for part of the week. Some coming from as far away as Japan and the United Kingdom. The Embassy Suites in Rogers hosts a few meetings during the week and also benefits from the out-of-town media who stay there.

“We have not formally studied the economic impact from this week, but we know it always occurs in June and we think it is on par with a Razorback football game in terms of revenue generated,” Deck said.

On a greater scale, she said the week puts Northwest Arkansas in a positive light, the benefits are more reputational than economical.

“It opens this region up to the world,” Deck said. “For those in the global workforce this may be their first trip to the United States.”

SURPRISE ENTERTAINMENT
Shareholders never know who will show up to join the celebration during Friday’s meeting. In recent year’s they have been treated to musical performances from the likes of John Legend, Jennifer Hudson, Celine Dion, Lionel Richie, Mariah Carey, Josh Groben, Taylor Swift and the Zac Brown Band. 

All eyes will be peeled at the local Walmart stores Wednesday or Thursday afternoon, trying to spot the host for this year’s event. Past hosts include: Hugh Jackman, Ben Stiller, Jamie Lee Fox and Justin Timberlake. The host usually makes a video at a local Wal-Mart store which is shown during Friday’s meeting. All bets are on the new Walmart to Go convenience store in Bentonville as the site for this year’s host video.

The two free concerts already announced this year will feature Jason Aldean and Cole Swindell on Tuesday, June 3. Foreigner, Styx and Don Felder will take the stage at Bud Walton Arena on Wednesday, (June 4).

The value of building permits in Fort Smith, Greenwood and Van Buren were a combined $16.345 million in the month of May. The total represents a decline of 52.76% when compared with May 2013, which itself was a standout month for the year overall when looking at building permits.

So far, year-to-date figures are only slightly higher than the same period for last year. Building permits in the three cities were a combined $81.295 million for the period, an increase of 0.81% over the same five month period last year, which saw building permits total $80.643 million.

FORT SMITH
The city of Fort Smith issued 180 permits during the month of May, totaling $13.494 million. The figure represents a decline of 55.77% over the same month last year, when 206 permits worth $30.506 million were issued.

May 2013 represented a month full of several commercial projects, including a new $13.6 million pumnp station on Jenny Lind and a $1.986 million of the Phoenix Expo Center. The former expo center was converted to office space for HMA, the parent company of Sparks Health System. The office complex has since opened with hundreds now employed at the site.

By comparison, last month only saw one commercial building constructed at a cost of $1.051 million with 15 remodels, which only totaled $6.127 million. In all, only $9.354 million worth of building permits were issued on 25 projects.

GREENWOOD
The city of Greenwood saw the most improvement of all three cities, with five permits issued with a value of $532,466. During May 2013, no permits were issued in the city.

But the figures are still down when compared with May 2012, when five permits were issued at a value of $733,540. The latest total represents a decline of 27.41% decline between the two years.

VAN BUREN
Van Buren saw $2.319 million in building permits issued in May, a decline of 43.387% from May 2013.

The $3.164 million expansion of Tankersley Foods was the primary driver of last year's figures.

Driving figures in May 2014 is a $2 million commercial building project at 323 Access Road. The site was once a small distribution center for Yellow Freight, though the site has been closed with little activity since being bought by Southeastern Freight.

According to Service Center Manager Scott Lackie of Southeastern Freight Lines, the company is renovating the site and anticipates moving its 38 employees from its Fort Smith service center to the Van Buren location by the end of the year. He said any additional hiring for the site would depend on freight levels at the facility, though Lackie said the maximum number of employees the Van Buren site could accommodate would likely be around 40.

2013 RECAP
Combined values in the three cities during 2013 were $203.037 million, compared to $157.32 million during 2012. The 2013 value is above the $201.079 million in 2011.

Fort Smith closed 2013 with the largest share of valuations, logging $177.687 million (a one-year increase of about 30.24% from $136.428 million in 2012), while Van Buren was the next largest with $17.067 million (a one-year increase of 38.96% from $12.282 million in 2012). Greenwood posted an additional $8.283 million, the only city to show a decrease from the previous year's total of $8.609 million (a decrease of 3.79%).

The gains in the Fort Smith market were largely from industrial construction projects at Chaffee Crossing, the construction of Mercy's new orthopedic hospital along Phoenix Avenue and various municipal construction projects across the city.

The departure of the of the A-10 flying mission at the 188th Fighter Wing means more than just the flying Razorbacks are leaving Fort Smith's airport, so is firefighting protection for the flying public.

According to Fort Smith Regional Airport Executive Director John Parker, the airport will lose its firefighting protection once the Air National Guard shuts down firefighting operations on Oct. 1. That means that between now and the beginning of October, the airport has to figure out how to comply with Federal Aviation Administration regulations stating that commercial airports with passenger service must have firefighter protection on site during operating hours.

The airport has two options, Parker said. The first is to contract out to a private vendor or the Fort Smith Fire Department for protection. The other option is to form its own fire department to serve the airport.

Cost estimates are unknown, but Parker told airport commissioners during a study session Monday (June 2) that the airport having to provide its own fire protection services would likely result in a deficit for the airport.

"We have a limit on revenues and available funding for this particular mission. I believe any course of action that we go into without generating a new revenue source somewhere will place us in deficit spending, but not to the extent that we initially thought."

According to Parker, the budget prepared for the current fiscal year was created with the assumption that the airport would have to begin its firefighting mission in the middle of the year at what was expected to be around $350,000 in costs. Instead, the Guard extended the mission of its fire department to Oct. 1, giving the airport additional time to figure out how to move forward.

Master Sergeant Terry Edwards, fire chief of the 188th's fire department, said two of its trucks, along with the fire station within the ANG base, would be used by the new airport fire department as part of an agreement in the works between the military and the airport. With the agreement, Parker said the airport would save hundreds of thousands of dollars each year by not having to finance the purchase of new fire trucks.

Parker said the airport would not raise rates on commercial passengers as a way to balance the budget or return to profitability, but instead would likely work out a deal to raise the lease rate on the National Guard, though nothing is certain at this point.

In discussions about which route to go, Parker presented commissioners with the facts about all different routes that could be undertaken by the airport.

Regarding contracting services with a private company, Parker said whichever company won the bid for a potential contract would take care of meeting certifications for firefighters and maintaining equipment, but said the cost could be prohibitive.

"Remember, on the estimates that we receive, we're talking about a company that's not doing this for civic service, they're doing this for profit. So those costs will be a little bit higher. But private companies … would be responsible for providing the elements of the contract."

Should the city be contracted, Edwards said it had eight former 188th firefighters on staff with the Fort Smith Fire Department with certifications necessary to meet FAA requirements. But Parker said with either the city or a private contractor, either may choose to have higher staffing levels than is required by FAA regulation, which would cost the airport a considerable amount more money than creating its own fire department.

Should the airport develop its own department, Parker said the airport would likely hire four firefighters who would work varied shifts. The fire department would be in operations about 20 hours per day, or 7,300 hours per year. On average, each firefighter would likely work a total of 2,080 hours per year with some overlapping coverage.

While the ANG has several firefighters on staff 24 hours per day, Parker said it would be possible to have only one firefighter on duty at many times since FAA regulations for an index B airport, the ranking for Fort Smith Regional, only require a single individual able to man equipment on duty during operational hours.

Wages for any staff to be stationed at the fire department have not yet been determined, Parker said, as everything is still in the discovery phase as the commission decides which route to take.

Regardless of which route the commission chooses, Parker said should a major emergency occur at the airport, it would have to rely on the assistance of Fort Smith's fire department, which could quickly respond from fire houses on Dallas and Phoenix Avenue.

But he said the last incident that resulted in an actual emergency response was a wheel fire on a commercial jetliner in 2009, adding that the reduction in staffing levels from the ANG to an airport-run fire department would not put the flying public at any greater risk.

"I only say all that to say this is not an issue where we would have to run to the runway every day or every week. It's a rare occurrence, actually, in the long run and even rarer that it goes to the true extent that we have a true emergency on the ground. It's one of those services that we never want to have to employ but we need to be prepared to employ it based on the FAA requirements."

Parker said adding the firefighting mission to the airport's responsibilities would cause many changes over the coming months, including updating the airport's emergency plan and the capital improvement plan with the FAA, which will require the addition of a new fire department building at a reimbursement rate of 90% from the FAA, leaving 10% of the cost to the airport.

Parker reminded commissioners that Fort Smith was not alone in the challenges it faced as a result of the change in firefighting status at the airport.

"We're not alone in all of this. There are a number of airports that are going through the same situation where aircraft were removed from tenant National Guard installations or civilian airplanes. So we're not the first to have to go through this."

Leslie Rutledge and David Sterling are in a full-fledged street brawl with a week to go in their run-off for the GOP Attorney General nomination.

The two Republicans have taken potshots at each other for weeks questioning each others’ conservative credentials and political experience. In addition, third party groups have spent hundreds of thousands of dollars in the race.

Rutledge led the ticket in the May 20 Republican primary with 47% of the vote, while Sterling finished the night with 39% support heading into a June 10 statewide run-off.

On Sunday (June 1), Sterling rolled out new charges that Rutledge had voted in Democratic primaries from 1998 through 2008, had not voted in any state elections in 2010 and 2012, and had donated to the Democratic Party of Arkansas at one time in the past.

Rutledge fired back saying Sterling represented in his legal practice a company peddling pornography, an act she says contradicts his Christian and family values platform as well as should be troubling for someone seeking office to oversee a division dedicated to Internet predators.

Also in the mix, a new six-figure wave of TV, radio and web ads and direct mail pieces claiming Rutledge is against a “stand your ground” law — a charge she denies. The Judicial Crisis Network (JCN) is paying for the media which also states Rutledge holds the same position as Barack Obama and Nancy Pelosi and it touts support for Sterling’s candidacy. Sterling denies coordinating with the group and says there is nothing inaccurate in the JCN claims.

Rutledge has also picked up the endorsement of the May 20 GOP primary third-place finisher, Patricia Nation. The winner of the run-off faces Democrat Nate Steel and Libertarian Aaron Cash in the November general election.

RUTLEDGE DEFENDS

Rutledge says she did vote in those Democratic primaries on her record — some in Independence County, some in Pulaski County. In the earlier years, she voted for Democratic friends and colleagues running for prosecutor positions and judgeships when Arkansas had partisan elections in those offices and Republican primaries were largely limited to Northwest Arkansas. Judicial elections became non-partisan in 2002, while prosecutors just moved to non-partisan status in the 2014 cycle.

Rutledge’s voting history, obtained through public records from the Pulaski County Clerk’s office, shows she did vote in the 2008 GOP Presidential primary (she says she cast a vote for Mike Huckabee) as well as this year’s 2014 primary. She consistently voted in general elections from 1996 through 2008.

In 2010 and 2012, Rutledge is not listed in Arkansas records as voting. She says she was out-of-state working for the Republican National Committee and its ancillary organizations. She also contends she voted in Virginia while working for the RNC during those years.

“While I was bleeding Republican blood in the heat of battle against the Obama/Pelosi liberal agenda as Counsel at the Republican National Committee and spending much of my time there, I voted in Virginia for all Republican candidates,” Rutledge told Talk Business & Politics. “The reason why Mitt Romney and Paul Ryan were on the ballot in all 50 states is because I was the lawyer who handled that for the RNC and Romney for President — working with all 50 Secretaries of State, preparing and filing the forms signed by Republican Speaker of the House John Boehner.”

Sterling has also pointed out that Rutledge made a contribution to the Democratic Party of Arkansas in 2007. Records show that Rutledge did contribute $104.50 to the DPA early that year, which she says was her payment for a ticket to Gov. Mike Beebe’s inaugural ball.

Rutledge said she was a state employee at the Department of Human Services at the time and, post-election, she bought the ticket and was unaware that the money would be routed through the DPA. She said she gave money to and supported Asa Hutchinson’s gubernatorial bid in the 2006 election cycle.

There are other high-profile Republicans on the 134-page DPA report with similar 2007 inaugural contributions, including Daryl Bassett, Carl Bayne, Julie Benafield Bowman, and J.J. Vignault — all of whom worked in and for the Gov. Mike Huckabee administration.

“In 2007, I was an attorney for the State of Arkansas going to court with foster children. I had worked tirelessly for Asa Hutchinson in the 2006 gubernatorial campaign, but because I was an attorney for the State and Mike Beebe had won, I bought a ticket to attend the Gubernatorial Inaugural Ball which is much different than an outright contribution to a political party,” Rutledge said.

She added that she traveled the state for Hutchinson in 2006, would go to his campaign headquarters at lunch and after work hours, and took personal vacation time from her state job to volunteer in his unsuccessful effort.

OpenSecrets.org and other Arkansas Ethics Commission filings note that Rutledge has also financially contributed through the years to GOP candidates including George W. Bush, Mike Huckabee, Asa Hutchinson, Tim Griffin, the Arkansas GOP, and some state representative candidates. No Democratic candidates appear through an OpenSecrets search.

“I have contributed to countless Republican committees and candidates over the years,” Rutledge said. “There are no public records of Sterling contributing to any Republican candidate.”

STERLING DEFENDS
Sterling does not show up in any searches on OpenSecrets.org nor in any cursory review of other candidate contribution reports. When asked about his contributions history, he reiterated that he has never given to Democrats, but didn’t speak to the absence of Republican contributions.

Sterling’s voting history, provided by the Pulaski County Clerk’s office, shows he has voted in Republican primaries from 2000 through 2014. He did not vote in the 1998 primary election in Pulaski County, but his 1996 history shows he voted in a primary and run-off election that year.

Clerk’s records don’t indicate in which political primary he cast his ballot in 1996, but there was a Presidential primary combined with a U.S. Senate race and Second District Congressional races that year. The Democratic and Republican primaries went to run-offs that spring with Bud Cummins winning the GOP nomination and Vic Snyder earning the Democratic nod for Congress. Winston Bryant defeated Lu Hardin in the Senate Democratic primary.

“I have always voted in a Republican primary. I was living in Hope during the primary in the spring of 1998, serving as the Assistant City Manager. I voted in the Republican primary that year in Hempstead County. I moved back to Pulaski County in the fall of 1998 and voted there in the General,” Sterling said in an email to Talk Business & Politics.

Rutledge has charged that Sterling’s legal representation of Cupid’s Lingerie, an adult novelty store with six retail locations in central Arkansas, was a client he should have declined. According to its web site, Cupid’s sells “adult novelties & toys, lingerie, vibrators, sexy nightwear, sex toys, and costumes.” A review of the web site also shows that Cupid’s sells XXX movies by DVD and on-demand.

Sterling represented Cupid’s in a 2009 lawsuit against former employees that it claimed stole company secrets while opening up their own competing shop. Revelations of his representation led to the “un-endorsement” of conservative TV patriarch and former State Sen. Jim Bob Duggar back during the primary.

“Due to new revelations and recent developments the Duggar family has decided to withdraw its endorsement of David Sterling in the 2014 race for Arkansas Attorney General. The family wishes both candidates well, but will not be making any endorsement at this time,” the family said through a spokesman in late March.

When asked by email why he took Cupid’s as a client and if it conflicted with his conservative or Christian views, Sterling did not directly address the questions.

“Rutledge is launching a personal attack on me regarding a private business matter from five years ago. She’s doing this in a desperate attempt to avoid explaining why she voted in five Democrat primaries and even gave money to the Democrat Party of Arkansas,” Sterling wrote.

“This race is about which candidate can most effectively use the Attorney General’s office to protect state authority and individual liberty from an overreaching Obama Administration. My opponent has a record of voting for Democrats and donating to the Democrat Party. I have a record of consistently voting for Republicans and have never donated to the Democrat Party. As Attorney General, I will fight to rein in an overreaching federal government,” he added.

THE RACE GOES ON
The volleys look certain to amplify in the coming days.

In response to the JCN attack ads, Rutledge’s campaign has denounced the accusations. Previously, she stated her position on the “stand your ground” law that the ad accuses her of being soft on. She said she thinks current statutes already address concerns. Rutledge has indicated she would be willing to work with the state legislature to make it even stricter as long as it was done in an “accurate, unambiguous, and constitutionally sound” manner.

Wes Manus, a spokesman for Rutledge, fired back on the claims that his candidate has a similar position to former Speaker of the House Nancy Pelosi, which the JCN ads claim.

“The people of Arkansas know Leslie Rutledge worked tirelessly as Counsel at the Republican National Committee to fire Nancy Pelosi. And, while Leslie was working 14-hour days fighting Obama and Pelosi’s liberal agenda, her opponent was filing a lawsuit in Pulaski County to help one of Arkansas’s largest pornography distributors, Cupids Lingerie,” he said.

Sterling has kept his latest messaging focused on Rutledge’s voter history.

“David Sterling has a 100% Republican primary voting record, and he has never contributed to the Democrat Party. Leslie Rutledge likes to talk about her party credentials, but the facts are that Rutledge has voted for Democrats and contributes money to the Democrat Party,” he said in an email to supporters and the media.

When asked if they would support the eventual Republican nominee or if they might consider the Democratic or Libertarian candidates in the race, neither candidate provided a response.

Heated and conflicting legislative testimony related to more than $6 million in deficits within a University of Arkansas division will not be investigated further for perjury, according to Larry Jegley, prosecuting attorney for the 6th Judicial District of Arkansas.

Jegley, in a letter dated June 2 to Arkansas Legislative Auditor Roger Norman, said he could not find enough in the conflicting testimony given by University of Arkansas Chancellor G. David Gearhart and former UA employees to warrant more review.

“While there may be differing versions of the events and discussions concerning the matters at issue, none rise to meet the standards of meriting further actions under Ark. Code Ann. Section 5-53-102. We now consider this matter closed,” Jegley wrote.

Norman had asked Jegley to investigate the legislative testimony for potential perjury among the witnesses.

UA BUDGET PROBLEM HISTORY
In February 2013, Gearhart asked auditors for the Arkansas General Assembly and the University of Arkansas System to perform independent audits of spending within the university’s advancement division. Prior to Gearhart’s request for the audit, Brad Choate resigned as vice chancellor of the division and Joy Sharp resigned as budget director of the Advancement Division.

In September 2013, state lawmakers heard conflicting testimony from fired University of Arkansas spokesman John Diamond who said he was told by his superiors to destroy documents related to a budget shortfall in the UA Division of University Advancement. Gearhart called the allegations "astounding,” "absurd" and "pathetic."

In late August, Chris Wyrick, then the newly-named UA vice chancellor for university advancement, fired Diamond. The act came in the aftermath of the discovery of a multimillion-dollar budget shortfall in UA's fundraising arm, the Division of University Advancement. Diamond disputed how UA should work with news media on reporting the deficit and its causes. Diamond has also alleged that UA officials told him to destroy documents related to a budget shortfall in the UA Advancement Division.

Diamond has since been hired as interim associate vice president for external relations and strategic communications at the University of Wisconsin.

Norman also forwarded in September an investigative report to Prosecuting Attorney John Threet of Fayetteville. Threet eventually decided to not pursue an investigation based on the audit report.

‘CULTURE OF COVER UP’
In January, the Joint Performance Review Committee of the Arkansas Legislature heard from Brad Choate, who ran the University of Arkansas’s fundraising division. Choate suggested a “culture of cover up” by school officials. Choate called himself the fall guy for problems that he said had been building since Gearhart ran the Advancement department.

“Frankly, this is another example of a pattern of shameful behaviors designed to protect themselves rather than be honest and accountable. Ladies and gentlemen, something is rotten in Fayetteville,” Choate told the committee.

Gearhart disputed Choate’s assessment, and said Choate “failed to carry out his duties and responsibilities as vice-chancellor by ignoring his duty to manage and supervise budgetary matters.”

In a UA statement issued Monday (June 2), Gearhart welcomed Jegley’s decision.

“I appreciate the diligence that Prosecutor Jegley put in to this review,” Gearhart said. “I believe this is the appropriate conclusion. We remain actively engaged in moving forward toward our goal of being nationally recognized as a top 50 public research university.”

Wal-Mart Stores Inc. is celebrating 52 years as a retailer, and while the discount juggernaut’s shares are trading around $77, performance has been lackluster for the past 12 months relative to its previous annual gains. Shares have posted gains of 1.43% in value since the annual meeting in June 2013.

The performance pales in comparison to the Dow Jones Industrial Index in which Wal-Mart is listed. The Dow Jones index has returned a 9.59% gain in the same 52-week period. The broader S&P 500 posted gains of 17.26% in the same 12-month period.

The only other retailer in the Dow Jones Industrial Index is Home Depot, which does line up somewhat with Wal-Mart demographically in the U.S. The home improvement retailer’s share gains are also muted at 1.45% over the past 52 weeks. The shares of other discount retailers like Dollar General have also struggled in the past year. Dollar General shares are up 0.43% over the past 12 months.

None of the retailers, including Bentonville-based Wal-Mart, began calendar 2014 with a bang. Wal-Mart shares have struggled since hitting a high of $81.37 in early December on hopes of a solid holiday. Shares are down nearly 3% since January, after a volatile performance in the back half of 2013.

“The retailer blamed harsh winter weather for keeping consumers indoors during crucial months. Now, with summer sales on the way and back-to-school shopping soon to follow, the Arkansas mega-retailer is looking to reverse its fortunes by taking on its competitors. This includes offering discounts on titles Amazon has stopped carrying, because of its ongoing beef with publisher Hachette, and plans to carry more organic goods to compete with Whole Foods, which has seen its stock struggle in 2014,” notes Jonathan Mariano, senior editor and analyst at The Street.

That said, analysts are split on their opinions about the retail giant’s shares. The 20 brokerage houses that closely follow Wal-Mart for Thomson/ First Call have an average target price of $81 for the shares, with a hold or neutral recommendation. Wal-Mart is trading at nearly 15 times projected consensus earnings for fiscal 2015. 

Shares of Wal-Mart stock (NYSE: WMT) closed Monday (June 2) at $76.76, down 1 cent. During the past 52 weeks the share price has ranged from a high $81.37 to a $71.51 low. Shares were trading slightly higher – gains of around 0.2% – in Tuesday morning trading.

Even with the small price gain in the past year, the share price is higher heading into the 2014 shareholders meeting (June 6) than during the same time in 2013. In fact, during the past 10 years, the share price heading into shareholders week has been lower only once (June 2009) than the previous year.

BULLS VIEW
Raymond James & Associates analyst Budd Bugatch recently reaffirmed his “overweight or buy” position for Wal-Mart Stores after the weaker-than-expected first quarter earnings.

Bugatch did lower his target price to $83 from $85 based on sluggish operational performance. The firm also reduced its fiscal 2015 guidance to $5.25 per share on revenue of $486 billion, citing the challenging headwinds from weather, SNAP income adjustments and higher benefits costs under the new health care law.

Wal-Mart anticipates benefit costs to increase about $100 million per quarter, based on higher enrollment numbers for health insurance during the first quarter of fiscal 2015.

“Given Wal-Mart's continued investment in small format stores, commitment to integrating E- commerce with brick and mortar stores, and attractive valuation, we remain constructive on the shares,” Bugatch noted.

ON-THE-FENCE
Brian Gilmartin, a portfolio manager at Trinity Asset Management and contributor to the Fundamentalis blog site, noted just ahead of Wal-Mart’s recent earnings call that he “expects Wal-Mart and retail in general to trade better into the 2014 summer.” He said the shares are fairly valued at $80.

Gilmartin said there is still the lingering Mexican bribery scandal and declining store traffic which has persisted for five consecutive quarters. He said the retailer has been able to compensate for the lower traffic with better pricing or better average ticket.

“The longer-term issues around Wal-Mart are still present and are not under the company's control,” Gilmartin said. 

Noting that Wal-Mart has created more wealth than even Warren Buffett in the last half of the 20th Century, Gilmartin said Wal-Mart is persistently challenged to grow revenues at something more than “low single-digit” percentages in an environment where GDP grows 2% and inflation hovers at 1% to 1.2% annually.

BEARISH VIEW
The Value Investor notes that Wal-Mart continues to woo investors with its 2.5% dividend yield and aggressive stock repurchase plan, retiring shares at a rate of 1% per year.

However, the bears don’t see the recent investments in small format and e-commerce generating enough new sales in the next couple of years to make up for the stagnation that has persisted for some time in its core business. At best the bears note that the handsome dividend yield makes Wal-Mart more of a hedge play than a growth story.

“It is important for Wal-Mart to lower costs in order to increase margins and profits. Its dividend growth was low in the past year, and I am not expecting major growth this year. But it is a good stock with limited risk for defensive investors.” according to Winning Strategies analysts and contributors to Seeking Alpha.

Belus Capital Advisors CEO and Chief Equities Strategist Brian Sozzi has been vocal about red flags he sees in Wal-Mart’s underlying business.

“Not only does buying interest in Wal-Mart shares look foolish in light of the first quarter figures, but it stands to be completely reversed in coming months based on the numerous fundamental disappointments in the quarter from a company that has grown too big to manage properly,” Sozzi noted to investors on May 15.

He also notes that the past five lackluster quarters for Walmart U.S. have been under CEO Bill Simon’s watch. Sozzi said he is unimpressed with Wal-Mart’s underlying business from “missing easy comps to overusing the severe weather excuse.”

“Right into the weak first quarter earnings and second quarter guidance letdown and continued pressure on return on investment are those tech investments online paying off. ... This management team is full bore on repurchasing stock,” which Sozzi said he sees as another red flag.

Benton County is one of the fastest growing areas in the Natural State in part because of job creation, quality of life and strong public school systems. But a recent study by consumer advocacy site NerdWallet shows that Bella Vista and Centerton in Benton County top the rest of the state as the best places for homeownership.

Only one city in the Fort Smith region, Greenwood, cracked the top 10 list. Other Fort Smith metro cities ranked in the NerdWallet study were Van Buren (16), Mena (18), Alma (26), and Fort Smith (37)

NerdWallet crunched the numbers for all 62 Arkansas communities with more than 5,000 residents to find the best cities for homeownership in the state. Here’s what the best cities had in common:
• Home values were less than $200,000 in all but two places;
• In half the places homeowners spent less than 25% of monthly income on housing; and
• 18 of the 20 cities gained population between 2010 and 2012.

The criteria in this study looked at three main questions: Are homes affordable?; Can you afford to live there?; Is the city growing?

BELLA VISTA APPEAL
Bella Vista ranked No. 1 with an 89.3% home ownership rate, the highest in the study. The cost of home ownership in Bella Vista as a percentage of household income was 23.4%, the lowest in the study. The city population grew 6.7% between 2010 and 2012. Despite the growth, median home prices at $152,300 were 8% less expensive than in neighboring Bentonville, based on the 2010 U.S. Census data 5-year estimates.

Bella Vista is part of the Bentonville School system, also the highest ranking large school in the state according to standardized test scores. The city is diverse, having began as a retirement resort in the 1960s. The homes feature wooded lots, six lakes and seven golf courses, with several parks and indoor as well as outdoor swimming facilities. Bentonville, by the way, was ranked 11th on the list.

Paul Bynum, analyst with MountData.com, reports that there were 874 homes sold in Bella Vista during 2013, unit sales in the city rose 16% from 2012 and total sales volume was $127.498 million, up 19% from the prior year. The city also boasted the shortest days on market across the two-county are at 49 days. In this active market median home prices rose 5% from 2012 to $130,700, which is well below the Census estimates.

Helen Dankser, an agent with Crye-Leike in Bella Vista, said she wrote nine new sales contracts in April. The Bella Vista sales office for Crye-Leike saw a record month in April, with sales up 29% from a year ago. Dansker said buyers of all ages are attracted to Bella Vista because of the amenities, good schools and opportunity for secluded lots – located within a very short distance to the main highway or one of the country clubs or lakes.

Bella Vista has one of the higher median household income levels at $5,118 per month, just a few dollars shy of Bentonville — the highest median income in the two county area at $5,140 per month. Bryant, Maumelle and White Hall each have higher median monthly household income estimates than Bentonville, according to the Census estimates.

CENTERTON BOOM
Centerton, also part of the Bentonville School system, came in second for the best place to own a home in Arkansas. Centerton’s population exploded 13% between 2010 and 2012. 

The median home price was an affordable $140,000 according to the Census projections, which was 15.6% less expensive than neighboring Bentonville. Major street widening of Arkansas 102 has made accessibility to and from Centerton much easier in the past year. 

The study gave Centerton an overall score for homeownership of 73.7, good enough for second place in the state. The home ownership rate is 67.9%, less than Bella Vista, but more than the 57.3% in Bentonville and the 55.9% in Siloam Springs.

Median household income in Centerton is an estimated $4,842 per month. The cost of homeownership in Centerton averages about 25.1% of household income. This was a little higher than the 23.4% average cost in Bella Vista, but cheaper than the 27% average cost estimated in Bentonville.

Centerton is the site for the second Bentonville High School and Wal-Mart is in the midst of building a supercenter and a neighborhood market in Centerton creating about 400 jobs in this small community. Mercy also recently broke ground a new medical clinic in Centerton.

Other Northwest Arkansas cities making the list included Siloam Springs (17), Rogers (19), Lowell (20), Farmington (27), Springdale (40), and Fayetteville (62).

Link here for the ranking of all 62 Arkansas cities compared.

Despite a fiscal year-to-date decline in individual income tax collections, Arkansas’ largest source of tax revenue, gross tax revenue for the fiscal year is up 0.6% and the state is on track to be able to fully fund the budget. However, May gross revenue fell 4% compared to May 2013.

Year-to-date gross revenue (July 2013-May 2014) totaled $5.626 billion, just 0.6% above the same period last year and above forecast by 0.3%, according to the report issued Tuesday (April 4) by the Arkansas Department of Finance and Administration.

Collections have declined relative to how the fiscal year began. The gross collections were up 3.4% after the first six months of the fiscal year, and 0.9% above forecast. After the first four months of the fiscal year, the gross revenue was up 4.1%.

Individual income tax collections for the fiscal year totaled $2.824 billion, down 1.2% from last year and just 0.4% above the budget forecast. Year-to-date sales and use tax collections were $1.993 billion, up 2.7% above last year but 1.2% below the budget forecast. The sales and use tax collections were up 4.8% four months into the fiscal year and up 3.9% six months into the fiscal year. Income taxes and the sales and use tax collections are the two primary sources of state revenue.

Corporate income tax collections for the first 11 reporting months of the fiscal year totaled $374.2 million, up 4.1% compared to last year and 5% above forecast.

MAY NUMBERS
May gross revenue was $425.3 million, down 4% from last year and 6.2% below forecast.

John Shelnutt, head of the Department of Finance and Administration’s Economic (DFA) Analysis & Tax Research division, said a shift in corporate income tax collections altered the May results, but said the revenue is expected to meet state budget needs.

“Results in May reflect a shift of approximately $20 million in Corporate Income tax collections previously reported in April but normally expected in filings for May. This one-month shift boosted April results at the expense of May while year-to-date results now reflect a more realistic look at performance with one month remaining in the fiscal year. The budget is on track to be fully funded,” Shelnutt noted in his report.

Individual income tax collections during May totaled $203.6 million, up 1.2% compared to May 2013 and below forecast by 1.7%.

Sales and use tax collections during the month totaled $180.7 million, down 1.8% from last year and 5.2% below the forecast. Sales and use tax collections, considered a barometer of consumer confidence, ended fiscal year 2013 on a down note. Collections in the segment for the fiscal year totaled $2.124 billion, up just 1.1% compared to the 2012 period, and 1.4% below forecast.

OTHER TAX COLLECTIONS
Alcoholic beverage
May 2013 - May 2014: $47.1 million
May 2012 - May 2013: $46.6 million

Games of skill
May 2013 - May 2014: $35.9 million
May 2012 - May 2012: $32.6 million

Tobacco
May 2013 - May 2014: $201.2 million
May 2012 - May 2013: $209.5 million

Insurance
May 2013 - May 2014: $68.6 million
May 2012 - May 2013: $65.1 million

COLLECTIONS HISTORY
Tax collections during fiscal year 2013 (May 2012-May 2013) totaled $6.214 billion, up 4.9% above the previous fiscal year and up 2.5% compared to budget estimates. One result of the gains was a budget surplus of $299.5 million.

Fiscal year 2013 marked the third consecutive year of year-over-year gains. Arkansas tax collections reversed a negative two-year slide in the 2011 fiscal year, with collections up 4.5% in the May 2010-May 2011 period.

State tax collections for fiscal year 2011 totaled $5.673 billion, up 4.5% above the $5.43 billion in the 2010 period.

The biggest declines in the 2009 and 2010 fiscal years were with individual income tax collections and sales and use tax collections.