2011 Brings Welcome News

Amid the gloom of a struggling post-recession economy, some bright spots began to emerge in this year’s business news, igniting fresh optimism that more prosperous times are on the horizon.

Each December, the Northwest Arkansas Business Journal editorial staff puts together a list of what in our opinion are the year’s 10 biggest business stories.

Choosing the opening of Crystal Bridges Museum of American Art to lead this year’s Top 10 was a no-brainer.

The Walton family’s multimillion-dollar labor of love has already put Bentonville in the national spotlight and spurred new restaurant and hotel development to serve the many thousands of people expected to descend on Northwest Arkansas to visit the museum.

Other positive developments in 2011 included Wal-Mart Stores Inc. reversing its nine-quarter streak of declining same-store sales and a $20 million expansion of Northwest Arkansas Regional Airport.

Two troubled developments in downtown Fayetteville are now under new ownership, which is expected to breathe new life into the projects. And the University of Arkansas released a $320 million long-term master plan for its athletics department.

However, the region’s manufacturing base took a big hit with the announcement that Whirlpool Corp. will close its Fort Smith plant. That city also lost two high-profile residents with the deaths of banker Sam M. Sicard and former mayor Ray Baker.

And Don Tyson, scion of Tyson Foods Inc.,  died at 80.

In Tyson’s obituary, The New York Times described him as “aggressive and visionary.” Those words could equally describe the spirit of Northwest Arkansas — a spirit that no doubt will guide the region’s economic recovery.

 

1. Art Works — The long-awaited Crystal Bridges Museum of American Art in Bentonville finally opened its doors to the world on Nov. 11. And thanks to a $20 million donation from Wal-Mart Stores Inc., no one will ever have to pay to cross its threshold.

Wal-Mart heiress Alice Walton, the driving force behind the project, was arrested for DWI in Texas a few weeks before the museum’s opening. Still, she was greeted with cheers and shouts of “Thanks, Alice,” at the opening ceremonies on Bentonville’s downtown square.

Walton family interests had largely bankrolled the museum, estimated to cost about $150 million.

The presence of the museum — and the anticipated presence of about 250,000 visitors in its first year — has spurred the opening of several restaurants on the Bentonville square, and caused others to beef up their staffs. On a related note, construction has begun on a 21c Museum Hotel one block from the square. The $30 million project will bring another 104 rooms to the city.

 

2. White Flag — An announcement foreshadowed for some time was finally made to employees of Whirlpool in Fort Smith.

In October, Whirlpool Corp. said it would close its Fort Smith manufacturing plant by mid-2012.

The decision to close the facility — which produces side-by-side refrigerators — was ultimately a surrender to the recession, a shift in production to a plant in Mexico and a low demand for those products.

Opened in 1966, the plant was one of the region’s key employers, despite recent layoffs. The closure will have a direct impact on about 1,000 active employees.

The plant’s work force had been steadily declining for years. Employment stood at more than 4,000 workers in 2007.

 

3. Lasting Legacy — When former Tyson Foods Inc. chairman and CEO Don Tyson died in January, the tributes came in waves from business associates, politicians and celebrities alike.

Most celebrated a man known for a work-hard, play-hard approach to life. Even The New York Times weighed in, with a feature-length obituary that’s still worth a Google search.

Former President Bill Clinton, in an official statement, summed up the sentiments of many who knew the colorful billionaire.

“From the first time I met him in 1974 until our last talk a few months ago, I was captivated by his keen insight, straight talk and raw energy,” Clinton said. “He did it his way.”

Other notable passings included Collier Wenderoth Jr., 87, former chairman of Fort Smith’s O.K. Industries Inc., and Stanley Reed, 57. Reed was the Arkansas Farm Bureau president from 2003 to 2008, and was a finalist for president of the University of Arkansas System at the time of his death.

Former Fort Smith mayor Ray Baker died at 71, and Paul Bynum Jr., a longtime and decorated member of the furniture industry, died at 54.

 

4. Wal-Mart Wrap-Up — Wal-Mart Stores Inc. can be counted on to be a top newsmaker in any given year, and 2011 was no exception.

After nine consecutive quarters of declining sales at its U.S. stores open at least one year, Wal-Mart reported a 1.3 percent gain in its fiscal 2012 third quarter. The retailer’s efforts to boost sales have included retooling its apparel offerings to focus on fashion basics like jeans and T-shirts rather than trendier items.

As a result of that shift, Wal-Mart is moving its apparel division back to Bentonville after two years in New York. It plans to relocate as many of its 275 New York employees as possible to Bentonville.

 

5. Downtown Developments — A Fayetteville landmark landed a new owner in late October.

The city’s tallest building, the Cosmopolitan Hotel, was sold to Southwind Hospitality Holdings LLC, a group led by Mississippian Ike Thrash and Sam Alley of Little Rock, for $3.8 million.

The 30-year-old development will be refurbished inside and out and renamed The Chancellor, returning the property to its status as a downtown ‘go-to place’. The property had been in receivership for more than a year following other failed restoration efforts.

The new owners plan a nearly $16 million renovation, re-opening in time to book rooms for the first Razorbacks football weekend in 2012. 

Another November announcement promised brighter days for another distressed high-rise property. Developer Ted Belden said The Lofts at Underwood Plaza, Dickson Street’s tallest building, was being renamed The Dickson.

Belden is now the sole owner, having assumed all debt on the troubled mixed-use project after his pervious partners reached settlements. He plans to turn unused space on the top floor into a bar and convert vacant space on the third floor into an upscale hotel.

 

6. Sicard Succession — Fort Smith lost one of its community stalwarts in August when Sam M. Sicard died at the age of 70.

For 34 years, Sicard was president and CEO of the family-owned First National Bank of Fort Smith and its holding company, First Bank Corp. He left behind a legacy as one of the River Valley’s most influential business leaders.

Sam T. Sicard, previously the executive vice president for FBC, was elected by the board of directors to his father’s executive position.

In November, Sicard squelched discussion of FBC’s long-rumored plan to buy the Bank of Fayetteville, saying FBC does have interest in expanding, but never had an agreement with any other financial institution.

 

7. XNA Expansion — Northwest Arkansas Regional Airport executive director Scott Van Laningham said its roughly $20 million expansion wasn’t meant to make it “the Taj Mahal of airports.”

“But we are trying to take it a step up and be a little bit nicer,” he added.

A summer grand opening showed those efforts to be a success. A net gain of eight gates highlighted 54,192 SF of new upper-level concourse and terminal space.

Travelers also got new and upgraded drinking and dining options. The long-term goal of the expansion is the addition of new carriers, which could result in lower fares.

 

8. Master Plan — University of Arkansas athletics always is a big story, not to mention a big business.

Such was the case again this year, whether it was the hiring of basketball coach Mike Anderson or the football team’s run at another Bowl Championship Series bid. What might have turned the most heads was the department’s announcement of a $320 million master plan for facilities.

The plan includes a basketball practice facility and enclosing the north end of Reynolds Razorback Stadium. The department also broke ground on a $30 million football practice facility in November.

 

9. Food Flaps — Some of Northwest Arkansas’ food producers faced challenges this year that resulted in the loss of jobs.

Cargill Inc.’s Springdale plant shut down Sept. 12 after it was linked to a nationwide salmonella outbreak in ground turkey. About 130 employees were laid off when the suspension of ground turkey production went on longer than anticipated.

Many were called back to work in other areas of the plant, and a company spokesman has said about 50 remaining laid-off employees could be recalled by Christmas.

Simmons Foods Inc. of Siloam Springs cut jobs this year as it slowed chicken production to offset rising grain prices. In April, 180 hourly workers were laid off.

Then in June, its affiliate Simmons Prepared Foods said it would cut 223 jobs at its Siloam Springs plant and move slaughter production to its Decatur facility.

Another Siloam Springs company, Allens Inc., came close to merging with Seneca Foods Corp. of New York. Negotiations were called off in September, without explanation from either company.

 

10. Shale Situation — Production in some individual wells has dropped dramatically since 2007, but drillers still rave about the gas-rich Fayetteville Shale.

Here’s a reason why: In its third-quarter 2011 earnings report, Southwestern Energy Co.  cited a 23 percent growth in overall production, fueled almost entirely by the Fayetteville Shale. Southwestern’s wells produced 112 billion cubic feet of gas that quarter, compared with 7.4 Bcf from the Marcellus shale in Pennsylvania and 9.6 Bcf from the company’s Ark-La-Tex division.