Bribery charges in Mexico and ball coaches on motorcycles were a big part of the top news in Northwest Arkansas during 2012.
But there was good news. The Northwest Arkansas housing market began to stabilize after more than four years of tumult following an oversupply of homes and subdivisions. Also, Crystal Bridges Museum of American Art blew past its first-year attendance expectations.
Following are the top five stories that The City Wire staff believes had the most impact on the Northwest Arkansas regional economy.
5. Election outcomes
The primary and general elections of 2012 saw GOP moderates go down in defeat and delivered overwhelming voter approval of retail liquor sales in Benton County.
State Sen. Bill Pritchard lost his re-election bid in the GOP primary to Rep. Jon Woods, who positioned himself as the more conservative candidate. Woods narrow victory was seen as an upset. Another upset was that of Bart Hester defeating Rep. Tim Summers for a newly drawn Senate seat in Benton County. Summers received the backing of most Benton County business leaders, but couldn’t counter Hester’s more conservative messaging in the primary.
Voters in Benton County decided to join 35 other Arkansas counties where package alcohol is sold. Wet supporters tallied 66% of the vote. Spending by the opponents was equally lopsided as Keep Dollars in Benton County spent $660,657 toward the effort, while the opposition group mustered just $1,265 according to records on file with Arkansas Ethics Commission.
Keep Dollars in Benton County was spearheaded by Tom and Steuart Walton – grandsons to Wal-Mart founders Helen and Sam Walton – who together donated more than a half million dollars toward this issue. Much of the money was spent to obtain more than 43,000 necessary signatures to get the issue before the voters.
The general election also saw the passage of a state highway improvement bond effort that will generate much-needed infrastructure money for Northwest Arkansas. County and city turnback totals for Benton and Washington counties combine at around $86 million for the 10-year program. Northwest Arkansas will also receive $375 million in special project funding separate from turnback totals.
4. Crystal Bridges success
Based on research made at other museums in similar-sized markets, planners at Crystal Bridges Museum of American Art hoped for about 250,000 guests with about 3,000 members joining the museum the first year. The museum, located in Bentonville, opened Nov. 11, 2011.
Those initial estimates were blown out of the water.
As of Nov. 4, a week short of the museum’s one-year anniversary, the museum welcomed more than 595,000 people and reported more than 7,500 "Original Members." Such members are anyone who joins the museum until Nov. 30 and those members are afforded additional benefits to their membership.
The large visitor count also had much to do with Bentonville tourism tax collection gains. Through October the Bentonville A&P showed an $871,102 total on prepared food and beverage tax collection and $397,060 for lodging and meeting space. Through the same period of time in 2011, the numbers were at $760,370 and $350,458, respectively.
Kalene Griffith, president and CEO of the Bentonville Convention and Visitors Bureau (CVB), credited the opening of Crystal Bridges as the biggest driver “in conjunction with our business traveler and sports events.”
The museum also in the first year boosted its collection count from 450 pieces to a little more than 2,000.
3. Regional housing market stability
Agents and brokers across Northwest Arkansas say 2012 has been a year of pleasant surprises with rising home prices, more sales and fewer distressed properties.
Through 11 months of the year, Benton and Washington counties reported 5,593 home sales valued at $974.294 million. This is up 18.3% from a year ago and the best climate in six years for sellers, according to Paul Bynum, analyst with MountData.com.
Not only were the number of sales higher, but median home prices rose 12.6% on a square-foot basis in Benton County, according to MountData.com. In Washington County median home prices rose a modest 3.8% on a square-foot basis.
“Real estate is heating up with a significant number of lot and home sales being recorded to the extent that some in the banking community are concerned that supply may be racing ahead of demand,” noted economist Jeff Collins, who conducts the data collection and analysis for The Compass Report.
2. The lost 2012 Razorback football season
It began, appropriately, on April 1.
Head Hog football Coach Bobby Petrino was in an April 1 motorcycle wreck. Jessica Dorrell, 25, of Elkins, was on a motorcycle with Arkansas football Coach Bobby Petrino when it crashed. Dorrell was a member of the athletic department.
UA Athletic Director Jeff Long placed Petrino on paid administrative leave on April 5. Petrino said he was alone when he crashed his motorcycle on Highway 16 near the Crosses community in Madison County Sunday evening, but it was eventually learned that he lied to Long and the media about having a passenger. Also, Dorrell’s hiring by Petrino was called into question.
On April 11, Long fired Petrino, saying the coach’s serious lapse in judgment forced the dismissal.
What resulted was the hiring of John L. Smith – with a 10-month contract – to lead the team. Razorback fans then watched a talented pre-season top 10 favorite fall to a disappointing 4-8 season, including a loss to University of Louisiana-Monroe and a 52-0 blowout loss to Alabama. Ticket sales bottomed out, and attendance was light. Heisman talk surrounding Quarterback Tyler Wilson and Running Back Knile Davis was silenced early in the season.
Long announced Dec. 6 the hiring of Bret Bielema, then the head football coach for the University of Wisconsin Badgers, to be the next Razorbacks head coach.
During his first six years, Bielema posted 60 wins, six bowl appearances, was ranked five times in the final AP Top 25, won two Big Ten titles and two trips to the Rose Bowl.
Bielema, 42, helped extend Wisconsin’s school-record bowl streak to 10 seasons, the second-longest active streak in the Big Ten and tied for the ninth-longest streak in the country.
1. Wal-Mart highs and lows
The top newsmaker during 2012 was Wal-Mart Stores Inc., which is not a surprise considering even the smallest of actions by the Bentonville-based retailer can have a big impact on the region.
Wal-Mart had a record year in terms of share price. The shares (NYSE: WMT) reached a new high of $77.60, but fell off to end Dec. 31 at $68.28. The impressive share performance appears to negate any immediate concerns related to a growing investigation of alleged bribery schemes in several countries.
The U.S. Department of Justice and the Securities and Exchange Commission continue to investigate allegations that Wal-Mart bribed Mexican officials to more quickly open stores in the country. Wal-Mart said in November it also has started inquiries into potential violations of the Foreign Corrupt Practices Act in Brazil, India and China.
Revelations of the scandal first hit April 21 when the New York Times reported “campaign of bribery” that was allegedly managed by former Wal-Mart de Mexico CEO Eduardo Castro Wright. The bribery schemes allowed Wal-Mart to obtain construction and other permits quicker than its competitors. According to the New York Times report, top Wal-Mart execs were alerted to the problem but shut down the internal investigation.
Despite the cloud of such allegations, the company performed well financially.
For the first three fiscal quarters of 2012, Wal-Mart extended its positive comp sales to five consecutive quarters, after sliding backward for more than two years. U.S. same-store-sales rose by 1.5% as a result of positive tickets and traffic. Walmart U.S. saw total revenue of $66.127 billion in the quarter, up 3.6% from the prior year.
Following are other notable new events in 2012.
• The NWA entrepreneurial community found itself on the world stage. The ARK Challenge and other entrepreneurial initiatives continues to draw attention to the region.
• Local banking sector profits improved after four years of real estate losses. Many of the smaller banks, however, are still managing through the real estate crisis.
• Arvest Bank continues to grow its market share and reach as the Fayetteville-based institution struck a deal with Bank of America to acquire 29 locations and most of the deposit accounts associated with those branches across four states.
• A new era will begin at NorthWest Arkansas Community College when the college board decided in early November to hire Evelyn Jorgenson. The board voted to negotiate a contract with Jorgenson to be the college’s third president starting July 1. President Becky Paneitz announced earlier in 2012 that she would retire at the end of her contract after serving the college 10 years.
• Archie Schaffer, born in Fort Smith and raised in Charleston, ended on Friday (Oct. 5) his last day as a full-time employee of Springdale-based Tyson Foods Inc. Schaffer began working in politics before he graduated from the University of Arkansas. His political history includes helping a then Harrison businessman John Paul Hammerschmidt unseat the powerful incumbent U.S. Rep. James Trimble, and Schaffer — not yet 25-years-old at the time — served as chief of staff for Gov. Dale Bumpers.
• The Walton Arts Center Board of Directors endorsed a $20 million expansion of the Walton Arts Center that includes a planned 2015 opening of the renovated facility on Dickson Street and a planned 2018 opening of a new theatre in Bentonville.
• Central Arkansas-focused 50 for the Future and the Northwest Arkansas Council continued their collaborative efforts with meetings in Little Rock to talk about their progress toward goals. The two groups first met in Fayetteville and Bentonville last spring and one outcome from that confab was a new marketing web site to draw movie and TV productions to the state.