Sparks, Jobs losses/gains top stories of 2009

Maybe it’s just best to forget about 2009.

There were bright spots — movement on the Marshals Museum, announcement of new companies/jobs, the Christmas Honors project and most of us had a white Christmas — but the Fort Smith/Van Buren region has seen better years.

The City Wire reviewed the past year of top business, political and cultural news to develop the standard top 10 stories list. Our criteria for a top story is that the event, issue or project have a broad impact on the community, with the impact being felt for years to come. Such criteria allows us to avoid the crime news — think Tony Alamo trials and a murdered former mayor of a small town — that most other media outlets can’t resist placing in their top stories lists.

With that simple criteria, we submit the following as the top stories for the Fort Smith region in 2009.

1. Sparks Health System
Sparks Health System, with more than 2,000 employees and more than 12,000 patients a year, entered 2009 on the brink of bankruptcy. Seeking relief, the Sparks board of trustees sought a financial partner. On March 30, Sparks officials announced a tentative agreement to sell the hospital to Alpharetta, Ga.-based Jackson Healthcare. But on June 1 the deal was called off, with Sparks CEO Ted Woodrell saying it “was simply a business decision based solely on what was the right thing for Sparks and the community.”

The hospital’s finances began to improve later in 2009, with Woodrell saying the board was no longer pressured to find a financial savior. A Moody’s analyst report would later confirm the hospital’s improving finances.

The board eventually found a buyer, however. On Aug. 14, Sparks officials announced the sale of the hospital system to Health Management Associates. HMA is a publicly held company that reported $104.05 million in net income on total revenue of $3.418 billion for the first nine months of 2009. HMA also operates Summit Medical Center in Van Buren and two Van Buren clinics — Cornerstone Family Clinic and Internal Medicine & Associates.

The $138 million deal was finalized Dec. 1, with HMA placing Melody Trimble in Fort Smith as the new CEO of Sparks Health System.

2. Jobs come, Jobs go (but mostly, they go)
The news later in the year on the jobs front was positive as Whirlpool said it would add 400 jobs. Rheem and Trane also called back several hundred workers later in the year The manufacturers cited an improvement in consumer demand as a reason to boost production.

Also, there were two high-profile new company announcements later in the year. Mitsubishi Power Systems announced in October in would build a wind turbine manufacturing and assembly plant in Fort Smith, possibly employing up to 400 jobs by 2012. Houston-based Oxane also announced a nanotechnology-based proppant manufacturing plant for Van Buren. The plant will employ around 50 in 2010, and may boost employment to 300 by 2014.

Unfortunately, layoffs and closing of other area businesses and industries outpaced the number of callbacks and new job announcements. The metro unemployment rate began the year at 7.7%, hit a high of 7.8% and moderated back to 7.7% in November. Not since early 1993 has the metro unemployment rate been higher.

The number of unemployed in the Fort Smith metro area was 10,848 in November, up 52% over the 7,130 unemployed in November 2008.

3. Regional Intermodal Transportation Authority (RITA)
The effort to create a regional intermodal authority began again in earnest on Feb. 18, and resulted in a May 27 meeting in which key governmental and business leaders in Crawford and Sebastian counties agreed to push the effort. That effort was funded thanks in large part to Rep. Rick Green, R-Van Buren, who successfully pushed legislation that provided $375,000 to get an intermodal authority on its feet.

The Crawford County Quorum Court approved the document July 13. The Van Buren City Council approved the document July 20, and the Fort Smith Board of Directors and Sebastian County Quorum Court approved the document July 21. All four groups signed the document Aug. 6.

RITA could provide three primary areas of support for area job growth.
• Process coordination: A freight management system could provide the research, procedures and consultation on how best to format the shipping of raw materials in and finished goods out. Or vice versa.

• Facilities construction/management: RITA could build and/or manage intermodal facilities used to transfer cargo between various transport methods. This would be an advantage in funding and constructing such facilities where it greatly benefits many businesses, but no single business could afford to do it.

• Business recruitment: RITA could bring in operations from other areas. For example, instead of building a shipping or distribution area in Kansas City or Tulsa or Little Rock, a large corporation might now look at moving that operation to the Fort Smith/Van Buren area to be a part of the new intermodal authority.

4. Housing Sector
This is a mixed bag. The housing sector is likely to see double-digit declines in the number of homes sold and the value of the homes sold in 2009. However, the pace of decline moderated significantly from the deep declines seen in the first few months of 2009. Home sales in Crawford, Franklin and Sebastian counties in the Jan.-March period were down 22% compared to the 2008 period. In the Jan.-Oct. period, the decline fell to 10%.

Thanks to low interest rates and expansion of a federal homebuyer credit, the Fort Smith/Van Buren housing market began to stabilize. November homes sales in Crawford and Sebastian counties were up almost 15%, but the gains have yet to bring the area housing market back to “normalcy.”

Crawford County had 38 homes sales in November, the same as November 2008. Sebastian County had 94 homes sold in the month, up 22% over sales posted in November 2008, according to the King Realty Group report authored by Realtor Ernie Schimmelman. The gains in homes sold did not come at the expense of home prices, with the rolling 12-month home prices in the two counties relatively flat in November compared to October.

5. Sale tax woes/Fort Smith and Van Buren budget issues
Consumers cut consumption. Especially later in the year.

For example, residents in Fort Smith and Sebastian County locked up their wallets and checkbooks in October, sending Fort Smith’s portion of the countywide sales tax down 22.74% compared to October 2008. For the first 11 months of 2009, the Fort Smith sales tax is down 8.59% compared to last year, and is down 5.96% from budget estimates.

Slow sales tax collections resulted in the $11.3 million Van Buren 2010 budget for 2010 nixing across-the-board pay raises for city employees. Van Buren Mayor Bob Freeman said he and the council continue to work within a tight budget necessitated by the faltering economy. And while he does see potential for growth, he is not betting on any great increase in the coming months.

Fort Smith city directors approved a budget with minimal increases, and adopted a wage plan that provided a wage boost to about 260 — typically those making less than $40,000 annually — of the city’s more than 900 employees.

6. U.S. Marshals Museum progress
The board of the U.S. Marshals Museum approved the building design June 9 and then set about to funding the $50 million project.

In January 2007, the U.S. Marshals Service selected Fort Smith as the site for the national museum. The U.S. Marshals Museum board of directors and staff are underway with the national fundraising effort. It’s been estimated the fundraising effort could take up to 7 years. The roughly 50,000-square-foot museum will be built in downtown Fort Smith near the Arkansas River.

Fort Smith-based First Bank Corp. announced Nov. 17 a $500,000 donation to the museum. At the time, museum officials said the donation put the fundraising over the $5 million mark. On Dec. 1, The Richard Griffin family and companies gave $100,000 to the museum, and Chester Koprovic also gave the museum $100,000.

Museum officials ended the year with a Dec. 18 reception held at the Arkansas Governor’s Mansion in Little Rock. Former President and Arkansas Governor Bill Clinton served as the ceremonial host for the event. The purpose of the reception was to make connections with individuals who may directly or indirectly donate to the construction and operation of the museum.

7. Christmas Honors
Hundreds of families, veterans and volunteers showed up early Saturday (Dec. 12) morning to help place 12,000 wreaths at the headstones in the Fort Smith National Cemetery.

Placing the wreaths is part of the “Christmas Honors” project of the Education & Quality of Place division of the Fort Smith Regional Chamber of Commerce. According to the chamber, the effort is designed “to help honor the servicemen and women of our community, who have made the ultimate sacrifice for our nation.”

Philip Merry, president of Bowen, Miclette, Britt & Merry of Arkansas, spearheaded the effort. The core team supporting Merry was Lea Taylor, Sheri Neely, Noah Steffy, Whitney Yoder, Bryan Merry, Claude Legris, Ashley Ellis and Kelly Clark. While there was no official headcount, most estimates placed at more than 1,000 the number of volunteers who helped prepare the wreaths, ship them to the cemetery and place them at each headstone.

More than $62,000 has been raised — the initial goal was $60,000 — to fund what is now expected to be an annual event.

8. Quality of Place discussions
The Fort Smith board of directors and Sebastian County officials agreed in September to move forward on a plan that could see Ben Geren Park transformed into a place meeting recreational needs of the metro area and providing facilities capable of hosting national sports tournaments. The more than 1,000-acre park would have space to add many new facilities, including softball, baseball and soccer fields. One proposal estimated the Ben Geren expansion could cost up to $10 million.

County and city officials said an option is to sign an “intergovernmental” agreement to jointly finance and operate the park. One of those steps would require annexation of the park by the city of Fort Smith.

Fort Smith officials also are mulling a public investment in 85 acres along the riverfront near downtown Fort Smith. Consultants partially paid by the city aggressively pushed the idea of a $20 million baseball park as the key part of an 85-acre riverfront development plan during a Dec. 17 special board study session. The proposed plan includes the ballpark, condos, a “boutique” hotel, retirement community, water features, retirement community and retail and office space.

Costs to fund the Ben Geren, riverfront and Fort Smith Convention Center support could range between $25 million and $40 million.

9. Sales tax extension (water system improvements)
Fort Smith voters in June overwhelmingly approved the extension of a 1% sales tax 18 months to raise $30 million needed to cover water and sewer improvements mandated by the federal government. Votes for the measure totaled 2,094, while only 236 opposed.

The tax pushed from June 2012 to December 2013 the end of the 1% sewer improvements tax approved in 2006. The city faces administrative and other potential oversight from the Environmental Protection Agency and the U.S. Department of Justice because excessive amounts of stormwater and groundwater enter the city’s sanitary sewer system through cracks and defects in the sanitary sewer pipes and manholes.

Since 2001, the city has made $100 million in improvements at water/sewer treatment plans and in the collection system. In 2001, voters approved (68% of the vote) $30 million in sales tax bonds, and voters approved in 2006 (75% of the vote) a $63 million sales tax bond to continue those improvements.

But about $75 million in work remains, according to city officials.

10. Trucking industry woes
Two of the three publicly held companies based in the region suffered through another year of a national freight recession that began in late 2006.

Van Buren-based USA Truck Inc. saw its revenue and income take big hits in 2009. Revenue totaled $282.051 million for the first nine months of 2009, down 32.7% from the same period in 2008. The truckload company has lost $4.665 million in the first nine months, compared to a $2.541 million gain in the same period of 2008.

USA Truck CEO Clifton Beckham said in the third quarter report that the conditions have likely bottomed out but said the next two fiscal quarters would produce similar tough financial results.

Fort Smith-based Arkansas Best Corp., the parent company of ABF Freight System, has lost $50.17 million in the past four quarters. In May 2009, Arkansas Best CEO Robert Davidson described the freight environment as the worst in his more than 37 years in the business. The company cut about 2,000 jobs in 2008, with another 350 cut in the first quarter of 2009. Not since July 1980 has the company cut so many jobs.

In a surprise move, Davidson announced Oct. 21 his resignation effective Dec. 31. Judy McReynolds, the company’s chief financial officer and treasurer, was named the new CEO.

Other important 2009 events (in no particular order)
• The hiring of Paul Harvel as president of the Fort Smith Regional Chamber of Commerce.

• The race for Fort Smith mayor heats up early, with Sandy Sanders announcing Sept. 15 he will seek the office and Mayor Ray Baker announcing Sept. 24 he would seek a sixth term.

• Purchase and ongoing renovation of the old Phoenix Village Mall.

• Announcement that Lake Fort Smith will meet area water needs to 2060, 10 years longer than original estimates.

• Beginning for formal public input on the possible construction of Pine Mountain Dam in northern Crawford County.

• Decision to place all residential sanitation in Fort Smith under the control of the Fort Smith Department of Sanitation.

• Renewed efforts to retain the Fort Smith Classic — a PGA Tour-sanctioned event — at Hardscrabble Country Club in Fort Smith.

• Beginning of efforts to combine management of the Fort Smith Convention Center and the Fort Smith Convention & Visitors Bureau.

• The City Wire completes its first full year providing business, political and cultural news to residents of the Fort Smith area.