2014: One Busy Year

While combing through the people and events that make up the Northwest Arkansas Business Journal’s top business stories of the past year, one thing became clear: 2014 was a busy year.

From the most expensive acquisition in the history of the meat industry to the leadership reshuffling at the world’s largest company to the continued and rapid growth of our area to major revitalization efforts beginning to take shape in downtown Springdale, 2014 may be viewed 20 years from now as a watershed year in the region’s history.

We look forward to reporting the big stories of 2015. Until then, here’s a look back at this year’s Top 10 Stories as selected by the Business Journal’s editorial staff:

 

1. Done Deal — On Aug. 28, one of the state’s largest employers — Tyson Foods Inc. of Springdale — completed the largest acquisition in the history of the U.S. meat industry.

Tyson acquired The Hillshire Brands Co. of Chicago for $63 per share. The all-cash transaction was worth $8.55 billion.

The combination of Tyson and Hillshire Brands should reposition Tyson as a clear leader in the retail sale of prepared foods, with a complementary portfolio of well-recognized brands, including Tyson, Wright Brand, Jimmy Dean and Ball Park.

To wit, thanks in part to a 38-percent increase in prepared food revenue, Tyson reported $10.1 billion in fourth quarter revenue Nov. 17, a 14-percent increase over revenue from the same period last year.

“We have a unique opportunity to transform an important segment of our business and position Tyson Foods to meet American consumers’ growing demand for protein at breakfast and throughout the day,” Tyson Foods president and CEO Donnie Smith said, following the successful acquisition.

Tyson estimates the Hillshire acquisition will add $4 billion to its prepared food revenues in 2015. 

 

2. Dennis Smiley — Everyone in the business community was thunderstruck by the sudden and remarkable downfall of Dennis Smiley, the former president and CEO of Arvest-Benton County, who abruptly resigned in March and,
in the aftermath of his departure, faced claims from as many as 20 creditors saying he left them holding toxic debt.

According to published reports, Smiley is under criminal investigation for repeatedly pledging the same Arvest stock and stock options as collateral for loans. The amount is believed to be around $4.5 million.

In September, Smiley sold his house in the upscale Pinnacle subdivision of Rogers and, soon thereafter, his wife, Cynthia Smiley, filed for bankruptcy in U.S. District Court for the Western District of Arkansas.

Smiley, the affable De Queen native who made his name as president of Arvest-Springdale, has not been heard from, at least publicly, since his resignation.

 

3. Elected Officials — 2014, of course, generated plenty of political storylines. Two of the more interesting developments involved local figures — the fall of Arkansas Lt. Gov. Mark Darr of Springdale and the ascension (fourth time’s the charm) of Asa Hutchinson of Bentonville.

Darr, a Republican and one-time candidate for U.S. Congress, announced Jan. 10 he would resign the lieutenant governor’s office, effective Feb. 1.

His exit came after the state ethics commission found in December 2013 that Darr had broken 11 campaign finance rules since 2010.

On the opposite end of the pendulum, Hutchinson was elected Arkansas’ 46th governor in November, becoming the first governor-elect to be born in Benton County.

He rode a GOP tidal wave to become just the fourth Republican in the last 140 years to be elected governor of Arkansas.

Hutchinson, a former Third District Congressman, had previously been 0-for-3 in statewide campaigns, losing races for the U.S. Senate (1986), attorney general (1990) and governor (2006).

 

4. Walmart Evolution — On Feb. 1, Doug McMillon officially took over for the retiring Mike Duke as president and CEO of the world’s largest company, Wal-Mart Stores Inc.

Several top executives have since departed in the following months, as McMillon handpicks his “cabinet” and works to revive sagging growth in the U.S.

In July, Walmart U.S. CEO Bill Simon announced his departure after four years in that role, and McMillon selected Greg Foran — an up-and-coming executive with the retailer’s Asia operations — as his replacement.

Duncan Mac Naughton, the company’s top U.S. merchandising officer, then left the company in November.

Foran said he was eliminating the merchandising position for the time being, instead opting to make changes to the responsibilities of current personnel.

Walmart also added two new board members in 2014 — Instagram CEO and co-founder Kevin Systrom and former American Airlines chairman and CEO Tom Horton.

It was announced in April that Lee Scott and Chris Williams would retire from the board.

 

5. Osteopathic Investment — Arkansas will soon open its first school for osteopathic medicine, if all goes well, and a lot of headway was made toward that goal in 2014.

In February, the Fort Smith Regional Healthcare Foundation board unanimously voted to move forward with the proposed Arkansas College of Osteopathic Medicine, and the Fort Chaffee Redevelopment Authority donated 200 acres worth $4 million for the project.

The foundation also committed at least $58 million to build the proposed medical school, and former foundation board chairman Kyle Parker was named president and CEO in April.

Beshears Construction Inc. and Nabholz Construction Services will lead the construction, which is slated to start in early 2015, with fall 2017 set as the target opening.

There are only 30 osteopathic colleges in the United States.

 

6. Civil Rights — On Dec. 9, Fayetteville voters repealed a divisive civil rights ordinance that, among other things, protected members of the LGBT community from discrimination in employment, housing and public places.

Approved by the Fayetteville City Council on Aug. 20, a group opposed to the ordinance, Repeal 119, gathered enough signatures to force a citywide referendum on the law and, by a vote of 7,523 to 7,040, had it overturned.

Supporters said the ordinance was necessary to protect the rights of all Fayetteville residents, not just those of the majority. Detractors said the law was poorly written and bad for businesses.

 

7. Whole Foods Entrée — Whole Foods Market confirmed in May that the Austin, Texas-based natural foods store will open a location in Fayetteville.

Whole Foods will be located at the College Marketplace development, a $25 million, 80,000-SF food and retail center at 3535 N. College Ave., just south of the Millsap Road intersection.

Construction on the 35,000-SF grocery store to be leased by Whole Foods began Aug. 18 and is expected to be finished by fall 2015.

The new store is estimated to generate as many as 175 jobs, and the opening will mark the second location in the state, with the other store located on Rodney Parham Road in Little Rock.

Whole Foods now operates 404 stores in the U.S., Canada and United Kingdom.

 

8. Half-Million Milestone — Northwest Arkansas’ population reached 500,000 in 2014, according to the Northwest Arkansas Council, which used U.S. Census Bureau data to estimate the region arrived at the number on May 28.

Mike Malone, president and CEO of the council, said the benchmark might bring in businesses that only open in higher-density areas and increase the region’s status as a national player.

Cameron Smith, a major recruiter for various Wal-Mart Stores Inc. vendors, expects the growth to continue. Vendorville — as he calls it — used to be a temporary stop on the corporate trail, but it is becoming a destination. 

“Every day I get an email from someone saying, ‘My company wants me to move and I don’t want to move and my wife doesn’t want to move,’” Smith said. “It’s a good place to land.”

 

9. Allens Inc. Arrangement — Allens Inc. of Siloam Springs came to an agreement with its investors in 2014, after filing bankruptcy the previous year.

Sager Creek Acquisition Corp., owned by investment funds managed or advised by two of Allens’ creditors, purchased the canned- and frozen-vegetable company at auction on Feb. 3, for $124.7 million.

The creditors are Santaky Advisors LLC and GB Credit Partners LLC.

Chris Kiser was named CEO of Allens in March, and the company’s name was changed to Sager Creek Vegetable Co. in July.

Allens had filed Chapter 11 bankruptcy in October 2013, acknowledging between $100 million and $500 million in debt, according to The Packer, an online industry information source.

The 87-year-old company employs more than 1,000 people in Arkansas, Wisconsin and North Carolina.

 

10. Emma Avenue — When word got out that Springdale Downtown LLC, an entity controlled by the Walton interests, had purchased the Ryan’s Clothing store and the San Jose Manor in the 200 block of E. Emma Ave. for $1.22 million, people took notice.

There was a flurry of stories in the media. People started talking about downtown Springdale and about how maybe, just maybe, things might turn around for Emma. And on top of that came news that Tyson Foods Inc. not only bought the old Orscheln Farm & Home at 5126 E. Emma for $450,000, but also the Jeff Brown Building at 317 E. Emma for $37,000. The Apollo Theater, at 308 W. Emma, sold for $50,000.

And just like that, there was nearly $1.8 million and over 80,000-SF of real estate activity in an area that for years sagged with neglect.