Before we bid farewell to 2019 and plunge headlong into 2020, as has become the custom in our first issue of January, the Northwest Arkansas Business Journal staff has put together a list of what we consider the 10 biggest business stories of the past 12 months.
It’s always a tall task, and this time was no different. Deciding which story to put on top of the list was particularly tough. And while which stories are the biggest in any year almost always is up for debate, we’re sure you’ll agree there was plenty to talk about in 2019.
Advancing Northwest Arkansas’ standing as a healthcare destination continues to be a significant focus of several of the region’s decision-makers. Several steps were taken in that regard in 2019, but the top story, arguably, was provided by Mercy Health System.
Mercy announced in 2016 a nearly $250 million investment on capital projects and equipment over a five-year period. Two significant pieces of that venture opened last year.
The centerpiece of that plan was unveiled in November — a $147 million, seven-story tower that increases capacity at Mercy Hospital Northwest Arkansas in Rogers from 200 beds to more than 300 beds.
Several hospital supporters including Gov. Asa Hutchinson joined hospital CEO Eric Pianalto to celebrate the 279,000-square-foot expansion. It created more cardiac and general operating rooms, and included doubling the size of the hospital’s neonatal unit to 19 beds with a 24/7 Intensive Care Unit (ICU) for premature babies.
In September, Mercy also opened a $47 million multi-specialty clinic in north Springdale. The 63,000-square-foot clinic has more than 60 exam rooms for primary care and special care as well as a full 24-hour emergency department equipped with a helipad.
Mercy’s overall expansion comes with the creation of 1,000 new healthcare jobs, including at least 100 providers.
Up and Running
Siloam Springs-based poultry producer Simmons Foods Inc. and Affiliates has started operations at a $300 million chicken processing plant in western Benton County. Simmons Prepared Foods, a company of Simmons Foods, announced the 315,000-square-foot plant started operating during the week of Sept. 30.
The plant is expected to reach the first phase of full production in January 2020. About 900 employees of Simmons Foods transitioned to the plant from a poultry production facility in Decatur. The company expected to increase the number of employees at the new plant to 1,200 by January 2020, with the potential to reach up to 2,300 employees in 2022. The estimated annual payroll impact in 2022 will be $86 million. Pay is expected to range between $13 and $25 per hour, with an average of about $16 per hour.
The plant’s processing capacity is nearly 820 million pounds of poultry annually, an increase of 28%, or 300 million pounds, after the operations of the Decatur plant were moved to the new plant. Simmons has yet to determine plans for the Decatur plant, which ceased processing operations in late October.
The new plant is near the center of 870 acres east of Arkansas Highway 59, between Gentry and Decatur. Fayetteville-based C.R. Crawford Construction was the general contractor on the project.
Simmons Foods announced plans to build the plant in 2017.
Bypass Projects Begin
More than $102 million in road projects will complete the Bella Vista Bypass in Arkansas. Emery Sapp & Sons Inc. of Columbia, Mo., started work in October on the final segments of the bypass in Arkansas. When completed, the bypass, or Missouri-Arkansas Connector, will become part of Interstate 49.
The Arkansas Highway Commission approved Aug. 1 two bids from Emery Sapp & Sons, and the combined value of the two bids was $102.11 million.
One bid is for a 2.4-mile segment of the bypass, from Benton County Road 34 to the Missouri state line. The $35.52 million project is expected to be completed in mid-2020. The other is for a single-point urban interchange for the bypass at U.S. Highway 71B in north Bentonville. The $66.59 million project should be completed in mid-2021. The existing segments of the bypass comprise Highway 549, and the bypass will include 18.9 miles in Arkansas and Missouri.
Missouri plans to complete its portion of the bypass by summer 2022. The 4.81-mile project would be partially paid for with a $25 million federal grant the Northwest Arkansas Regional Planning Commission received in December 2018. The final projects of the bypass in Arkansas were contingent on Missouri working to complete its portion of the bypass. The Arkansas projects will be part of the $1.8 billion Connecting Arkansas Project, which was paid for with a half-cent sales tax that’s set to end in 2023.
Walmart’s plan to build a new corporate campus in Bentonville has been a significant source of buzz since the global company revealed those intentions in 2017. Several announcements added additional clarity to the project in 2019.
In May, Dan Bartlett, Walmart’s executive vice president for corporate affairs and the lead executive overseeing the new corporate campus project, and Walmart President and CEO Doug McMillon held a news conference with Gov. Asa Hutchinson and Bentonville Mayor Stephanie Orman to unveil a 3D model of the design plans. The new headquarters will span 20 buildings, with the Razorback Regional Greenway running through the center of the campus.
The development plan encompasses a 350-acre site that includes several existing buildings that have been razed or will need to be.
Gensler, a global firm headquartered in San Francisco, was announced in August as the lead architectural firm on the project design team, which includes Miller Boskus Lack Architects of Fayetteville.
In December, Walmart said it would use 1.1 million cubic feet of Arkansas-grown and produced mass timber in the construction. Canadian-based mass timber manufacturer Structurlam will process the product from a new facility in Conway, its first in the U.S. It’s expected to be operational in mid-2021.
The corporate campus development will continue in phases with the first unit expected to open in 2020 and full campus completion by 2024.
Lack of game-time success by the head coaches of the two largest revenue sports at the University of Arkansas led to some tough decisions for the CEO of “Hog U” last year.
Hunter Yurachek, in just his second year in Fayetteville, didn’t flinch either time. On March 26, he fired Mike Anderson, who was 169-102 in his eight seasons as UA head coach with just three appearances in the NCAA tournament. Arkansas went 18-16 in 2018-2019 and reached the second round of the NIT. The Razorbacks’ season ended with a loss to Indiana.
Twelve days later, Yurachek signed Eric Musselman to a five-year, $12.5 million contract to coach the Hogs. Musselman went 110-34 at Nevada.
Yurachek conducted another coaching search in the fall after dismissing football coach Chad Morris with two games left in his second season. Morris was 4-18 as Razorbacks coach with zero wins in the Southeastern Conference.
On Dec. 8, following a search that lasted two days shy of one month, Yurachek signed former Georgia assistant coach Sam Pittman to a five-year, $15 million contract to coach the Hogs. Pittman previously spent two years (2013-2015) as offensive line coach at the UA.
No More Waiting
More than two years after Arkansas voters legalized medical marijuana, the state’s newest industry finally had dispensaries and cultivators in operation in 2019.
Arkansas voters approved a constitutional amendment in November 2016, allowing people with qualifying medical conditions to use marijuana, though the implementation of the program took longer than expected.
State regulators issued licenses to 32 dispensary operators spread across eight geographic zones to sell cannabis products in Arkansas to qualified patients. The first dispensary opened in May in Hot Springs, and by mid-December 12 dispensaries combined to sell 3,812 pounds and $25.7 million worth of the drug.
Zone 1, which includes Benton, Washington, Carroll and Madison counties, has all four of its dispensaries up and running — two in Bentonville and two in Fayetteville.
Releaf Center and The Source, both in Bentonville, opened in August. Acanza and Purspirit Cannabis opened in Fayetteville in September and November, respectively.
Combined, they’ve sold 1,190 pounds of the drug through Dec. 16. Fort Cannabis, the only dispensary licensed in Fort Smith, opened Dec. 18.
Rise of Solar Energy
Little Rock-based solar power company Today’s Power Inc. (TPI) is one of several solar power companies working to build arrays across the state. TPI worked with the city of Fayetteville and Ozarks Electric Cooperative to complete a 10-megawatt solar array with 24 megawatts of battery storage in July. The $23 million system is the largest solar array on city-owned land in Arkansas, and the only one in the mid-South to include utility-scale battery storage.
TPI is working with C&L Electric Cooperative to build a 1-megawatt array near the headquarters of the cooperative in Star City. TPI also will build a 1-megawatt array for Texarkana-based Southwest Arkansas Electric Cooperative, 1.5-megawatt array for the city of Paris in Logan County and a 2-megawatt solar energy system with 6 megawatts of battery storage in northeast Arkansas. It’s the first farm energy project in the mid-South to pair two solar technologies, fixed-tilt and single-axis tracking, and include battery storage.
North Little Rock-based solar power developer Scenic Hill Solar has announced multiple solar energy projects, including a 26-megawatt solar power plant with 40 megawatts of battery storage for Producers Rice Mill in Stuttgart, a 12.75-megawatt solar array for the city of Hot Springs, and a 4.8-megawatt array for Bank OZK and 40 other locations in Little Rock.
Also, a subsidiary of NextEra Energy Inc. and electricity utility Entergy Arkansas recently started construction on a 100-megawatt Chicot Solar Energy Center in southeast Arkansas. The $130 million center will be the largest universal, utility-scale solar energy project in Arkansas.
Springdale-based nanotechnology manufacturer NanoMech Inc. filed April 15 for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware.
The bankruptcy filing, which allows for a company to reorganize its debt, followed New York-based lender Michaelson Capital Partners suing NanoMech for not making payments on nearly $7 million in loans. The lawsuit also went after Jim Phillips, former chairman and CEO of the NanoMech, who retired from the company.
A subsidiary of Houston-based petrochemical company Vinmar International acquired the operational assets of NanoMech on Aug. 1 after agreeing to bid up to $13.09 million for the company. Following the acquisition, NanoMech was renamed to VinTech Nano Materials LLC.
As part of the bankruptcy filing, NanoMech claimed Phillips spent more than $750,000 of the company’s money on personal expenses and overseas trips while he was CEO. Phillips has denied the claims of financial wrongdoing and said the trips were work-related.
Paperwork continues to be filed in the bankruptcy case.
In March, Benton County voters gave their answer to a proposed tax increase to help fund a new county courthouse: a resounding no.
By a vote of 6,055 (61.98%) to 3,714 (38.02%), citizens voted against a proposal put forth by county leaders to build an 87,000-square-foot, four-story courthouse in downtown Bentonville. The Benton County Quorum Court had asked voters to consider a one-eighth cent sales tax increase for 54 months (4.5 years) to raise $25 million for the estimated $30 million project. Private donations totaling $3 million were pledged — including $2 million from the Walton Family Foundation — to help offset the project cost.
Most voters stayed home. The issue brought just 6% of the county’s 161,802 registered voters to the polls, and only 4,999 ballots were cast on a mostly rainy election day in Benton County, the second-most populous county in the state. There were 4,785 ballots cast during a week-long early voting period.
Benton County Judge Barry Moehring is pursuing alternatives. He hosted a series of town halls in the fall to update residents on different options for a downtown courthouse, including an option for a much smaller courthouse than the one presented to voters in March.
From a population perspective, seeking a new courts facility is understandable. The Benton County population was around 35,000 in 1928 when the courthouse was built in downtown Bentonville.
Arkansas River Flooding
The profound power of nature was felt by thousands in the Fort Smith metro and elsewhere throughout the state.
Record flooding along the Arkansas River (McClellan-Kerr Arkansas River Navigation System, or MKARNS) in May and early June covered more than 2,100 parcels of land and flooded more than 500 homes and businesses in Fort Smith alone. The Interstate 540 bridge between Van Buren and Fort Smith and the U.S. 64 (Midland) bridge between Van Buren and Fort Smith were temporarily closed, and the Fort Smith Public School District suspended classes.
Five Rivers Distribution in Van Buren, which manages the port of Fort Smith and has port operations in Van Buren, was underwater, and the floods stopped commercial barge traffic on the Arkansas River at a cost of $23 million a day to the state’s GDP.
The river crested May 29 in the Fort Smith area at 40.26 feet, well above the flood stage of 22 feet and surpassing the all-time highest river level of 38.1 feet set in May 1945.
In the aftermath, Gov. Asa Hutchinson put an estimated price tag of $100 million on the flooding in terms of repair costs to public infrastructure and private losses. In late June, Hutchinson appointed a task force to make recommendations regarding the state’s levees and requested legislative approval for $10 million for immediate repairs after the historic flooding.