The big Fort Smith regional news stories during 2013 included major moves in the regional medical community, major interstate construction, ups and downs with two local trucking companies, and the effort to build a water park.
Following are the top five regional stories – in terms of socio-economic impact – during the previous year.
5. Cleaning up Whirlpool
A March 2013 push by Whirlpool to ban groundwater wells near their shuttered Fort Smith manufacturing plant began a complicated and often heated series of events that saw Erin Brockovich visit Fort Smith. Whirlpool closed the refrigerator manufacturing plant – which at one time employed as many as 4,600 – in mid-2012.
The focus was on how to best clean up a toxic plume of chemicals, namely trichloroethylene (TCE), that Whirlpool admits leaking into the groundwater during the 1980s. Brockovich, the famous corporate-pollution fighter, eventually decided to not get involved in Fort Smith.
Officials with the Arkansas Department of Environmental Quality faced angry Fort Smith residents on Nov. 12 as they presented official recommendations to Whirlpool on how to clean up the TCE.
The ADEQ released its final Remedial Action Decision Document (RADD) for Corrective Action on Dec. 27 that requires Whirlpool to spend at least $6 million to clean up pollution at its shuttered Fort Smith plant. The RADD states that Whirlpool must begin remediation within 60 days of the effective date (Dec. 27) of the RADD and file quarterly reports every Feb. 15, May 15, Aug. 15, and Nov. 15 as well as annual progress reports on Jan. 15.
4. New contracts and hostile takeover attempts
The Fort Smith region benefits from the corporate jobs created by Fort Smith-based Arkansas Best Corp., and Van Buren-based USA Truck – respectively, a major national less-than-truckload carrier and a truckload carrier that operates with more than 2,200 trucks. ABF Freight is the primary subsidiary of Arkansas Best.
After several delays and votes, a labor agreement between Arkansas Best Corp. and the International Brotherhood of Teamsters was fully ratified in October, with savings from wage and benefit reductions possibly helping the company to avoid three consecutive years of losses.
The five-year contract – set to expire on March 31, 2018 – between Arkansas Best and the Teamsters was approved June 27, but some supplemental provisions were rejected. Officials with both sides negotiated the rejected provisions, and the seven “local/area supplements” were again placed on the local ballots for approval. All but one of the supplements were approved, and on Tuesday the union members of the Central cartage voted to not strike. Following that vote, the Teamsters’ negotiating committee voted to ratify the agreement.
The contract covers about 7,500 employees of ABF Freight System who are members of the union. Most of those workers are drivers.
USA Truck officials spent most of the latter half of 2013 fighting off a hostile takeover attempt. Phoenix-based Knight Transportation made public its bid for USA Truck on Sept. 26. The $9 per share bid at the time was a 39% premium from USA Truck’s share price on Sept. 25. The share purchase and assumption of liabilities creates a $242 million deal. At risk in a deal with Knight would be some or all of the 500 jobs at USA Truck’s corporate headquarters in Van Buren.
The USA Truck management and Board of Directors have rejected the offer, saying it “substantially undervalues” the company and does not reflect the value of potential gains from ongoing turnaround initiatives. The attempt by Knight remains open into 2014.
Full-year financials released Jan. 31 showed a $17.54 million loss for 2012, marking four consecutive years of losses for USA Truck. In February, John Simone was hired by the board to turn around the struggling company. Former CEO Cliff Beckham was moved to the chief financial officer position.
3. $78 million Interstate 540 renovation
Work began in January on the major highway artery into Fort Smith that carries more than 50,000 cars day. The more than $78 million upgrade of Interstate 540 resulted in traffic congestion on the main Interstate corridor through the city.
As part of the 2011 Interstate Rehabilitation Program (IRP) passed by 80% of Arkansas voters, Kiewit Infrastructure South will begin work on seven miles of improvements to Interstate 540 (I-540) from Interstate 40 (I-40) near Van Buren to Rogers Avenue in Fort Smith.
Construction has included “rubblizing” the existing I-540 lanes, and replacing nine bridges. It will also include the modification to four bridge structures. The nine bridges include the I-540 bridge at Rogers Avenue as well as those at Grand Avenue, Clayton Branch, and the Union Pacific Railroad Overpass.
The Arkansas Highway & Transportation Department expects the contract to be completed “sometime in April or May of 2014” or July 2014 at the latest.
2. The effort to build a water park
Officials with the city of Fort Smith and Sebastian County struggled through 2013 to agree on the budget and amenities for a water park approved by voters in March 2012.
After a year of off and on discussions between the two governments, a joint resolution was approved approved Jan. 6 that would add a wave pool to the Ben Geren Aquatics Center while moving a dive well to near the bottom of the governments' priority list for water park amenities, essentially killing a part of the project that had been the focus of much contention just 11 months ago.
Voters had initially approved an $8 million park, but planning after the vote saw the price rise to $8.8 million, then ultimately the two governments approved a $10.9 million facility. In addition to the wave pool, the facility will now consist of three bodies of waters, a 500 foot lazy river and four water slides for a total footprint of more than 20,000 square feet, making it the largest water park in the region.
There were several times during the process when members of the Fort Smith Board and the Sebastian County Quorum Court were split on the park and the park’s future was uncertain.
1. Changes in the regional health care industry
News from the regional health care sector hit frequently in 2013 with new jobs, changes in owners, new investment and lawsuits between former partners often driving the headlines.
• Health Management additions, changes
Naples, Fla.-based Health Management Associates (HMA) announced in April it would build a regional service center in Fort Smith and employ more than 500 with average annual salaries potentially exceeding $40,000. At the time, HMA was the parent company of Sparks Health System in Fort Smith and Summit Medical Center in Van Buren. The facility opened in September.
In July, a $7.6 billion deal from Franklin, Tenn.-based Community Health to buy HMA was announced. The offer was approved by an HMA Board that was then ousted in a proxy fight pushed by New York City-based Glenview Management. On Sept. 25, the newly installed HMA Board announced a review of the offer. Glenview had previously said the $13.78 per share offer was too low. Ultimately, the new HMA Board approved of the deal. The HMA Board now believes the deal is good for HMA shareholders.
On Jan. 8, both sides said the deal would close by month’s end – barring a rejection from federal regulators.
• Cooper Clinic-Mercy lawsuit
A lawsuit filed Aug. 2 by Fort Smith-based Cooper Clinic against Mercy Fort Smith and St. Louis-based Sisters of Mercy Health System not only more fully reveals a contentious relationship between former medical sector partners, it may signal an end to the hospital-clinic relationships that have been part of area medicine for almost a century.
In the 17-page complaint filed in Sebastian County Circuit Court, Cooper Clinic officials allege that Mercy and its parent company used their economic power to recruit 15 physicians away from Cooper and to the Mercy Clinic between Oct. 31, 2010 and Aug. 1, 2013. Mercy has denied any wrongdoing. The case has carried over into 2014.
• Mercy investments
Work continued during 2013 on a plan announced August 2011 by the St. Louis-based Sisters of Mercy to invest $192 million in the Fort Smith area as part of a 10-year plan to invest $4.8 billion in its operations in Arkansas, Kansas, Missouri and Oklahoma.
Part of that investment was completion of the $42 million Mercy Orthopedic Hospital in Fort Smith that was estimated to add 100 jobs. Also, Mercy formally opened its $10 million Heart and Vascular Center on Feb. 20. The 16,000-square-foot center was built within renovated space within Mercy’s primary hospital in Fort Smith.
The hospital also broke ground in late 2013 on a new $2.34 million clinic to be built a 3700 Cliff Drive in Fort Smith.
• The 188th Fighter Wing began converting from its A-10 support mission to a drone and recon mission.
“The new missions: The good thing is we have a mission – a great mission – one that will keep the majority of jobs in the Fort Smith community. This mission will be RPA and intelligence. In both areas, we will have daily engagement in some of the most important and contested regions of the world,” noted a memo from 188th commander Col. Mark Anderson to members of the unit.
• Crawford County Sheriff Ron Brown began the push for a $24 million new jail that would increase the county’s capacity from 88 inmate beds to 317. Members of the Quorum Court were cool to the idea, and a plan to pay for the jail has not yet been approved.
• There are no new jobs planned, but officials with SGL Carbon announced April 17 a $26 million upgrade to their facility in Ozark. The German-based company employs more than 90 people in the Ozark plant, which produces high-power graphic electrodes that create heat in electric arc furnaces used in steel mills. Work on the expansion is expected to be complete by June 2015.
• On May 14, Sebastian County voters overwhelmingly approved renewal of the 1% countywide sales tax, with 78.87% voting for the tax to be in place for another 10 years. Leaders from across Sebastian County had urged voters to renew a 1% sales tax that funds operations in 11 cities across the county, as well as providing county services, such as funding for the county jail.
• An iconic building in downtown Fort Smith that has alternated between consideration for renovation and demolition will soon become the headquarters of Fort Smith-based Propak Logistics. The historic and white-tiled Friedman-Mincer building – also known as the OTASCO building – at the intersection of Garrison Avenue and Towson Avenue in downtown Fort Smith was built in 1911.
Steve Clark, founder and president of Propak, finalized on May 21 the transaction to buy the property. With an acquisition and renovation estimate of about $2 million, Clark plans to convert the three-story, 24,000-square-foot building into offices for the about 40 employees of Propak. The company provides logistics, transportation and supply-chain management services.
• Tampa, Fla.-based Sykes added about 200 jobs to its call center in Fort Smith. Employment at the center, housed in a portion of what was once Phoenix Village Mall, is estimated at 600.
• Up to 90 new jobs were expected to come to Fort Smith thanks to continued expansion at the Gerber plant on the city's north side. The company, which has expanding its operations to add a cereal line in Fort Smith, asked for and was granted June 4 by the Fort Smith Board of Directors an amendment to a resolution passed in 2010 providing the company industrial development revenue bonds. The original bond package totaled $90 million while the project taking place at Gerber has grown so much, the company requested an additional $60 million, bringing the total bonds issued to $150 million.
• After more than 30 minutes of discussion at their regular meeting, the Fort Smith Board of Directors on Aug. 20 reversed a city policy in place more than 45 years and gave the city administrator position the hire-fire authority over department heads. The only positions not under the city administrator authority are the internal auditor and district court clerk. The Fort Smith police chief and fire chief fall under the city administrators new authority.
• Immaculate Conception School is the first elementary school in Fort Smith, public or private, and the first Catholic school in Arkansas to receive the prestigious National Blue Ribbon School award. Immaculate Conception has 309 students, including pre-school. The school has 22 certified teachers and a total faculty/staff count of 43.
The National Blue Ribbon Schools Program is part of a larger U.S. Department of Education effort to identify and disseminate knowledge about best school leadership and teaching practices. The other Arkansas schools named as a 2013 Blue Ribbon School were Bergman Elementary School (Bergman, Ark.), Central Park at Morning Star Elementary (Bentonville Public School District), and Ellen Smith Elementary School (Conway Public School District).
• A U.S. pet industry that has grown an estimated 22% in the past four years may have helped Mars Petcare officials decide on a $50 million expansion of their Fort Smith manufacturing operation that will add 42 jobs. Officials with Mars Petcare – based in Brussels, Belgium, with a U.S. headquarters located south of Nashville, Tenn. – announced Oct. 23 that they planned to add new equipment and a new line to the Fort Smith operation they opened in September 2009.
• Supporters and officials of the University of Arkansas at Fort Smith pushed beyond a capital campaign goal of $50 million by raising $56.895 million for the UAFS Foundation. More than 200 university supporters and UAFS faculty and staff gathered Sept. 10 on the campus to celebrate the completion of the fundraising effort.
“I hope you feel great about your decision to help thousands of University of Arkansas at Fort Smith students, many of whom you will never know,” said Neal Pendergraft, UAFS Foundation Board member and co-chair of the Giving Opportunity campaign.
• Some of the revenue from the 2009 purchase of Fort Smith-based Sparks Health System could be used to help build and operate a medical school in Fort Smith and generate an up to $100 million a year economic impact. According to Foundation Chairman Kyle Parker, the foundation now has around $50 million and the board is investigating the feasibility of an osteopathic medical school that would, once fully operational, serve 600 students. Efforts to build the school were announced Dec. 18.
Notable deaths included:
• Former Arkansas Sen. Bill Walters of Greenwood, who served in the Senate for 18 years, died from complications related to his battle with pancreatic cancer. He was 69.
• The famed hotel developer John Q. Hammons died May 27 in Springfield, Mo., the home of his company that developed 210 properties in 40 states. He was 94.
• Popular and acclaimed artist John Bell Jr. died Nov. 8 at his Fort Smith home. He was 76.
• Eddie Christian Sr., a Fort Smith attorney known in wide legal circles as one of the best defense attorneys in the nation, died in mid December following a fight with cancer. He was 72.
• David Banks, the former president and CEO of what was for many years Fort Smith-based Beverly Enterprises, died in late December. He was 76.
Link here for the top stories of 2012.