AEDC’s Mike Preston Explains What’s Next In Superproject Pursuit

While the Lockheed Martin superproject was well in the works before he was ever considered for the job as director of the Arkansas Economic Development Commission, Mike Preston knows that there are many people to credit in the “team sport” of economic development.

Appearing on this week’s edition of Talk Business & Politics, Preston said his role in the $87 million bond financing package for the Lockheed Martin JLTV superproject in Camden was to “bring it in for a landing.”

He joked, “Two months on the job and now they say, ‘what are you going to do next month?'”

Under the state’s superproject amendment, Amendment 82, the legislature overwhelmingly approved the bond package to shore up the incentive package for Lockheed’s bid for a $30 billion Joint Light Tactical Vehicle (JLTV) project.

What happens next?

Preston said Lockheed Martin will put the bond financing agreement into their final official proposal and then the waiting begins.

“The Department of Defense procurement process will start evaluating the contracts,” Preston said of the next phase. “We would anticipate sometime in late July, maybe early August, sometimes they get drawn out a little bit further. There will probably be a protest period by the two companies who don’t win. That could drag it out a little bit longer.”

Preston said the state participation was needed to help bring the cost down to manufacture at a minimum 55,000 JLTVs for the American military. The production number could climb higher eventually as the transportation vehicles are sold to allies of the U.S.

“I think the Department of Defense is pleased with the overall per unit cost that Lockheed Martin is able to do on these JLTV vehicles,” Preston said.

He said while Arkansas’ state involvement in the deal is now known, it doesn’t mean that competitive states – Indiana and Wisconsin – won’t offer incentives to land the contract.

“There could be some incentives offered behind the scenes that just haven’t been made public yet,” he said.

SILICON VALLEY TO PARIS
As if a superproject special session wasn’t enough in his first two months on the job, Preston has been racking up the frequent flyer miles.

The new AEDC director was in Silicon Valley two weeks ago with Gov. Asa Hutchinson, former Acxiom CEO Charles Morgan, and others visiting with 10 high-tech firms on the West Coast. Some of those stops included Facebook, Intel, Intuit, and HP.

Preston said the trip was “a foot in the door” to lay out the new computer coding initiative Gov. Hutchinson passed in the recent regular session. Arkansas economic officials want to sell the advantages of the Natural State for future business expansions.

“We’re gong to have a whole generation coming out of the high schools now who have this ability, who have the computer science and are able to do coding,” Preston said.

Combined with Arkansas’ quality of life, lower cost of doing business, and tax structure, Preston said the state wanted to sell its positives.

“We’re way ahead of California where they are when they’re offering a 13% state income tax on top of everything else,” he cited as an example.

Preston also said the controversial Religious Freedom Restoration Act (RFRA) never entered the conversation on the high-tech trip to Silicon Valley despite several company CEOs from the region issuing high-profile statements during the debate calling on Arkansas to reject the law.

“It never came up,” Preston said. “This was really planting the seeds with these CEOs and letting them know we’re here and this is what we have to offer.”

He said the connections made in California will need to be nurtured in the future. Preston anticipates follow up trips as well as invitations to come to Arkansas to see the computer coding initiative and business advantages first-hand.

Preston will also be in Paris in mid-June for the Paris Air Show, one of the largest aerospace trade shows in the world.

With aerospace manufacturing being one of Arkansas’ largest exports, Preston said having a booth presence at the event should be helpful in landing more business in state.

Watch his full interview in the video link below.