A new shopping center could soon be setting up shop at the intersection of Arkansas Highways 22 and 59 once the closing of a land deal takes place on Wednesday, according to Executive Director Ivy Owen of the Fort Chaffee Redevelopment Authority.
Owen said veterinarian Marion Smith and her sister Debbie were the purchasers of more than 90 acres of property, which he said would be developed into about 70 stores.
"What you can expect is a pretty quick groundbreaking. The developer, the purchaser of the property has not disclosed to us yet who the mall developer is, but we believe it's a developer out of Dallas. We do know that they've been in talks with this developer for quite a while,” Owen said.
Groundbreaking for the site, he said, should take place anywhere from 90-120 days from now.
And while the property has been termed a mall in documents from the FCRA, Owen said the property will likely resemble a shopping center similar to The Pavilion in Fort Smith, which is home to Best Buy, Dick's Sporting Goods and Target.
Up to 700 people may be employed at the shopping center, according to Owen.
Kathy Deck, director of the Center for Business and Economic Research at the Walton College of Business at the University of Arkansas, cautioned that while the new shopping center sounds exciting, it may not provide as much of a boost to the area's economy as anticipated.
"I think it's important to understand that retail has a lifestyle," she said. "These jobs probably will be viable under some configuration, but will they all be net positive jobs? Probably not. We see retail shift around to the best, brightest (shopping centers) all the time."
That was something Owen said was a real possibility with the new, as of yet unnamed shopping center.
"This is 700 jobs, some new, some transferred," he said.
Owen also said the number of jobs was provided by the developers, who said they expect about 10 jobs to be created at each of the shopping center's nearly 70 retailers, though he said some retailers could have less than 10 employees while others could "have significantly more."
Deck said Northwest Arkansas experienced some of the transfer of jobs when the Pinnacle Hills Promenade opened in Rogers in 2007, with clothing retailer Old Navy among the stores to move from Scottsdale Center, with other companies like Malco Theatres opening a second location at Pinnacle Hills.
SALES TAX, RETAIL SHIFT
"Now you haven't had the same rapid population growth that Northwest Arkansas has experienced. There's no reason to say no, it can't be supported. But it will be a shifting of where retail sales happen,” Deck explained.
Sales tax collections in the region point to a declining trend in consumer spending – a trend that supports Deck’s view of a shift in spending rather than a boost from the new shopping center.
For the first five months of 2013, the countywide tax has generated $6.425 million for Fort Smith, down 1.6% compared to 2012 and down 4% compared to budget forecasts.
Jeff Collins, the economist who conducts data collection and analysis for The Compass Report, said sales tax collection data suggest local retail activity is struggling to return to more stable patterns seen before the sharp national economic downturn experienced during 2009.
Sebastian County tax collections for the first four reporting months of 2013 total $9.323 million, down 0.18% compared to the same period in 2012. Following are the past five years of Sebastian County tax revenue.
2012: $28.525 million
2011: $28.619 million
2010: $27.605 million
2009: $27.528 million
2008: $31.026 million
The new shopping center, which will sit on the 90 acres the Smith sisters of Hot Springs bought for $2.2 million, will not only house stores, but Owen said it would house restaurants, as well.
"Ninety acres is a lot of acres, there will probably be several out parcels but there will likely be several in the strip of stores themselves, but I don't know that."
Initially the city of Barling had voted to go wet in order to spur development along what will become Interstate 49. The first Arkansas portion of the interstate to be constructed runs right through the middle of Fort Chaffee and will end just east of the new shopping center.
The vote passed, but was tied up in litigation and eventually ruled unconstitutional because not all of the southern portion of Sebastian County (the portion of the county not including Fort Smith) voted in the election.
Following the legal challenges to the ballot initiative, Fort Smith Vice Mayor Kevin Settle floated the idea of the city of Fort Smith annexing the land around the future I-49 in order to continue to encourage development, including restaurants that serve alcohol, an idea that Barling's mayor and others rejected outright.
Owen said the project developers are certain it could still be a success, even though Barling is dry, due to the availability of private club licenses, which have allowed large national chains and smaller restaurants to be successful in Benton County for years prior to its November 2012 vote to go wet.
As for what the FCRA will do with the $2.2 million from the sale of the property, Owen said it would go back into infrastructure improvements after paying general operating costs for the authority.
"That money goes into our bank account, which goes into our general operations budget and the Board's policy is everything above the operations amount of money goes back into the property in infrastructure improvements to get the property ready (for further development)," he said. "Money is not hoarded or invested somewhere. It's spent on the property in a spelled out plan, a seven phase plan that us and our engineers have put together. We are at phase three right now."
Not using the money to produce water and sewer improvements, needed for residential, industrial and commercial development, would mean the FCRA would be "dead in the water" and further developments would not take place, according to Owen.
The Smith sisters' Hot Springs-based real estate agent and developer Larry Webb said he was unable to speak for this story due to confidentiality agreements.