The ups and downs and ins and outs of Wal-Mart Stores, Razorback football and the regional housing market often generate the top stories – in terms of socio-economic impact – in Northwest Arkansas. That held true again in 2013.
5. University of Arkansas budget deficits and football losses
Although enrollment gains continue and significant investments were made in campus facilities at the state’s flagship university, 2013 was not the best of years for UA Chancellor G. David Gearhart and Head Hog Coach Bret Bielema.
A state audit found deficits in the UA Division of Advancement’s budget of $2.14 million in fiscal 2011 and $4.19 million in fiscal 2012.
In September 2013, Roger Norman, director of the state’s division of Legislative Audit, forwarded an investigative report to Prosecuting Attorney John Threet of Fayetteville. Threet eventually decided to not pursue an investigation based on the audit report. Several high ranking UA officials were dismissed in action related to the budget deficits, including Brad Choate, who ran the division, and John Diamond, vice chancellor of university relations.
Gearhart has denied any wrongdoing and has avoided charges and disciplinary action.
On the gridiron, the Razorbacks were hoping for some recovery following the “lost season” of 2012 when Coach John L. Smith delivered a 4-8 season. It couldn’t get any worse, right? Wrong. Bielema, the highly-touted coach recruited away from the University of Wisconsin by Athletic Director Jeff Long, presided over a 3-9 season, with the Hogs failing to win a conference game for the first time since 1942.
4. Regional jobs figures continue to impress
The Northwest Arkansas metro area is the only one of eight metro areas in or connected to Arkansas that has had a monthly jobless rate below 5% since November 2008.
It’s also the only region in Arkansas to see its labor force size and employment levels consistently move higher since 2008. The Northwest Arkansas labor force totaled 241,337 in November, ahead of the 236,832 in November 2012. By comparison, Arkansas’ labor force fell from 1.348 million in November 2012 to 1.325 million in November 2013.
Northwest Arkansas’ employment tally was an estimated 229,639 in November, almost 4,000 jobs more than the 225, 763 in November 2012. Arkansas’ employment tally fell from 1.251 million in November 2012 to 1.226 million in November 2013.
3. Shifts in the regional banking sector
Acquisitions and bankruptcy filings in Arkansas’ banking sector were certainly felt in Northwest Arkansas during 2013.
In June 2013, Home Bancshares acquired Liberty Bank in a deal valued at $280 million that created the second largest bank in Arkansas with assets of $7.1 billion in assets. Liberty Bank had several branches in Northwest Arkansas, and they are expected to remain open.
In September 2013, Simmons First National acquired financially troubled Metropolitan National Bank with a bid of $53.6 million paid to the federal court for the ongoing bankruptcy proceedings of Rogers Bancshares, the holding company for Little Rock-based Metropolitan National Bank. Closings are expected among some of the 12 branch operations Metropolitan had in Northwest Arkansas.
In October 2013, Bentonville-based Arvest Bank acquired Little Rock-based National Bank of Arkansas for an undisclosed amount. Arvest, the state’s largest bank, got a little bigger adding key marketshare in the Little Rock metro area with the purchase of National Bank of Arkansas.
Also during 2013, Chamber Bank acquired Decatur State Bank.
2. Wal-Mart names new CEO
CEO Mike Duke announced his retirement in November with plans for the next CEO to be 47-year-old Doug McMillon. McMillon is set to assume the job on Feb. 1. Duke held the job for five years.
A Jonesboro native and University of Arkansas graduate, McMillon will be the youngest to ascend to CEO since founder Sam Walton, who was 44 when the first Wal-Mart was built in Rogers. McMillon has served as the CEO of Walmart International. From 2006 to February 2009 McMillon served as CEO and president of Sam’s Club, an operating segment of Wal-Mart, with sales of more than $46 billion during his tenure.
In 1984, McMillon began his career with the company as a summer associate in a Walmart Distribution Center. In 1990, while pursuing his master degree, he rejoined the company in a Tulsa, Okla., Walmart store.
McMillon will be fifth CEO for Wal-Mart Stores Inc.
More than a dozen top level personnel shifted to new jobs or left the company as a result of the leadership change at the top.
1. Real estate continued to rebound
When the Northwest Arkansas real estate market showed signs of renewed strength in 2012, some wondered if it would continue into 2013. It did.
For the first 11 months of 2013, the number of homes sold in Northwest Arkansas was up 17.36% compared to the same period in 2012, and up almost 23% compared to 2011. It was the largest year-over-year increase among Arkansas’ four largest metro areas during 2012. For the first 11 months of 2013, the number of homes sold in central Arkansas are up 6.35%, up 13.04% in the Jonesboro area, and up 6.9% in the Fort Smith area.
The value of homes sold in Benton and Washington counties for the first 11 months of 2013 was $3.121 billion, up 13.06% compared to 2012 and up more than 25% compared to 2011.
Benton County had a narrow hold on the top Arkansas county for home sales in the first 11 months. The county, with a population of around 230,000, had 4,202 home sales between January and November. Pulaski County, with a population of around 390,000, posted 4,117 home sales in the same 11-month period.
Paul Bynum, analyst with MountData.com, said the average market time from listing to contract this year has been roughly 50 days, an indication that demand is strong relative to the supply of homes on the market.
The median price-per-square-foot is $84 through October, up from $78 a year ago. The median sales price of $149,900 in the combined two-counties is up 7% from a year ago, Bynum reports.
There was a 6-month supply of homes listed for sell at the end of October, which Bynum deems a balanced market for buyers and sellers.
• The previous year also saw the federal case against former high-profile Northwest Arkansas developer Brandon Barber move forward. In March, Barber was arrested in New York City and transferred to Fayetteville. In November, K. Vaughn Knight, a Northwest Arkansas attorney and one-time associate with Brandon Barber, was found guilty on eight charges related to money laundering and fraud related to Barber’s messy bankruptcy. Barber, who has plead guilty to several charges, faces up to 45 years in prison with fines possibly maxing out at $1.5 million.
• The year also saw continued growth in regional sales tax collections, with the overall strength of the economy and enhanced tourism opportunities pushing more dollars through the region.
• Liquor store permits were issued by state officials in 2013 for Benton County liquor stores. County voters approved in 2012 a measure to change the county to “wet” with regard to alcohol sales. The county’s population allows for 55 liquor stores, the state handed out 39 permits in the July hearings. State officials said those applicants who were denied had the opportunity for appeal. The first liquor store in Benton County opened in August – Star Liquor located along Southwest Regional Airport Boulevard in Bentonville.
• Redman & Associates in October announced a $6.5 million investment to relocate its ride-on toy manufacturing business from Shanghai to Northwest Arkansas over the next three years. The move is part of a program by Wal-Mart Stores Inc. to move some suppliers back to the U.S. Wal-Mart officials announced on Jan. 15, 2013, a pledge to purchase in the next 10 years an additional $50 billion in U.S.-made goods. Company officials have said they hope to boost U.S. manufacturing – often referred to as “onshoring” – by purchasing more sporting goods, apparel basics, storage products, paper products, textiles, furniture and higher-end appliances.
• Serco hired more than 1,000 additional workers for its new Rogers data processing center, according to Candy Curtin, vice president of HR for the global service company. Aside from processing paper applications for the Affordable Health Care insurance program, Curtin said the firm also handles Visa processing for immigration and administration work for the U.S. Department of Defense and its family programs.
• Siloam Springs-based Allens Foods could soon be gobbled up by Seneca Foods Corporation as the New York-based fruit and vegetable manufacturer entered into an asset purchase agreement for $148 million in mid-December. The deal had not been approved by the end of the year.
Notable deaths included:
• Doyle Rogers, chairman of the board of Metropolitan National Bank and a highly successful real estate developer and businessman, died in early February. He was 94.
• Robert Owen “Bob” McBride, the longtime owner of Fayetteville-based McBride Distributing Inc., died April 4 in his Fayetteville home. He was 72.
• 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.
Link here for the top five stories of 2012.