Temporary positive, negative impacts with I-540 work

by The City Wire staff ([email protected]) 201 views 

The $78.8 million Interstate 540 improvement project may have eight miles of the road reduced to one lane in each direction, but the project may prove temporarily beneficial to the local economy during the 18 months of construction.

That temporary benefit could include $3.7 million in increased area business sales.

According to Selm Stockstill, district communications manager with the project's general contractor Kiewit Infrastructure South, much of the materials to be used in the project will be purchased locally.

Stockstill said 50% of materials, such as ready-mix, steel bridge girders and dirt, will be "sourced" locally.

She also said the company would hire up to 100 individuals to actually construct, or "craft," the road.

"Of that craft, we are expecting to hire at least 60% locally," she said.

She said the company also expected to have nearly 30 individuals in "staffed" positions, such as salaried foremen, management and superintendents.

During the relocation of any out-of-town staff, Stockstill said the company would use local hotels and restaurants, which contribute sales tax revenue to local communities affected by the interstate construction.

Officials with the Arkansas Highway & Transportation Department expect the work to be completed “sometime in April or May of 2014” or July 2014 at the latest. (Link here for more details on the project.)

According to a study conducted for The City Wire by Dr. Greg Hamilton of the University of Arkansas at Little Rock, the impact of the construction could be positive for the local economy, producing as many as 31 additional jobs outside of the project.

Hamilton said the construction could also add $1 million to area household incomes, $2 million to the gross domestic product and could generate as much as $3.7 million in business sales.

But he cautioned that the economic impact from the construction is temporary.

"When they build it, yes, there will be some money spent in the community and yes, material will be (bought) in the community," he said. "But once the project is completed, that's the end of that."

The real impact on the economy, Hamilton said, will come at a later time.

"The benefit now is that drivers of the highway will save time and maintenance cost because there's no potholes and stuff," he explained. "With (reduced) maintenance cost, there's a savings there and money is spent elsewhere."

While the project does have the potential to positively impact the local economy, the first two weeks of the project have had a negative effect on some businesses.

Jim Hadley, who owns and operates McDonald's restaurants along Rogers Avenue and Kelley Highway where they intersect with I-540, said sales have dropped at the locations, though he could not release a number in sales declines due to McDonald's policy.

"We are seeing some decrease right now," he said. "Not dramatic, but enough that it stands out from the rest of the market."

Hadley said he could track the reduction in sales to the first day of construction on Jan. 28.

Todd Patton, district manager at gas station chain Murphy USA, said the Kelley Highway location had seen a 50% drop in sales since construction started.

"It's killing us," he said. "And we've got 18 months of this? I'm pretty nervous."

To lure back customers who may have taken alternate routes or may be avoiding exiting theinterstate during a longer-than-average commute, Patton said he has directed his staff to reduce gas prices, but with little success.

"We're making less, so our profit is down along with our sales," he said.

The one positive for Murphy USA has been an increase in sales at locations in Van Buren and Alma, where Patton suspects commuters are gassing up closer to home.

"As a district, we're not hurting. But as far as the store goes, it's killing my store," he said.

As a way to deal with the reduced sales, Hadley and Patton have said they have been forced to cut the number of hours given to employees. Hadley said while he has been surprised by decline in sales, he is hoping the positive economic impact projected by Hamilton is true for his business.

"Maybe things will work out better as the months go along and people start figuring out how to get to us better," he said. "But I don't know."