Year in Review: The Top 10 stories that shaped 2021 in Northwest Arkansas
As it has become the tradition in our first issue of the year, the Northwest Arkansas Business Journal staff has compiled a list of the top 10 business stories of the past 12 months.
The task is never easy, and the most significant stories are always debated. We’re sure that you’ll agree that 2021 had plenty to discuss.
1. BELLA VISTA BYPASS OPENS
The Bella Vista Bypass, or the Missouri-Arkansas Connector, was the missing link that filled the nearly 20-mile gap in the 265 miles of interstate from Fort Smith to Kansas City, Mo. For almost 30 years, Missouri and Arkansas worked to complete I-49 between Interstate 40 and Interstate 70 after Congress in 1991 designated the interstate as high priority corridor No. 1. On Oct. 1, the Bella Vista Bypass opened to traffic.
The new I-49 segment consisted of six projects totaling more than $220 million beginning in February 2011. The final two projects in Arkansas comprised nearly half of that amount and were contingent on Missouri completing its portion of the bypass. In December 2018, the Northwest Arkansas Regional Planning Commission received a $25 million federal grant to pay for Missouri’s portion partially. Work started in April 2020 to complete the $70.3 million project in Missouri.
Emery Sapp & Sons of Columbia, Mo., was hired to complete the final segments of the bypass in Arkansas and Missouri. Other parts of the bypass were completed by Kolb Grading of St. Charles, Mo., and APAC-Central of Fayetteville.
The Arkansas projects were part of the $1.8 billion Connecting Arkansas Program, which was paid for with a half-cent sales tax set to end in 2023. Voters approved the tax in November 2012. On Nov. 3, 2020, they voted to extend the tax permanently.
2. BANKS BOUNCES
In June, Tyson Foods’ leadership succession planning hit a snag when CEO Dean Banks unexpectedly resigned after less than a year at the helm of the world’s biggest meat producer.
Banks joined the company in 2017 as a board member, then joined the company’s C-Suite as president in December 2019. He succeeded Noel White as CEO in October 2020. At the time, the company said Banks’ expanded role was part of the board’s “deliberate, long-term succession planning.”
Banks cited “personal reasons” for his departure, and the company replaced him with industry veteran and chief operating officer Donnie King.
“Being a part of Tyson Foods has been a very rewarding experience,” Banks said in a statement. “Upon deep personal reflection and discussions with my family, the board, and my colleagues, I believe that stepping down and concentrating on my family is the right decision at this time.”
Before joining Tyson Foods in 2017, Banks was with X (formerly Google [x]), an Alphabet Inc. company. Previously, he was managing partner of SEED Ventures, a group investing in and developing early-stage healthcare technologies.
3. STRAINED SUPPLY CHAIN
A capacity-constrained supply chain became magnified during the holiday surge as demand rose amid pandemic-induced factors, including federal fiscal and monetary policy and materials and labor shortages.
U.S. ports faced congestion with a record number of container ships waiting to unload while ocean container rates increased to record levels. The federal government intervened to help to alleviate the bottleneck and sought to extend port operating hours. However, the transportation industry faced a shortage of drivers and port workers and the chassis with which to haul containers from ports. According to the American Trucking Associations, the driver shortage rose to more than 80,000 drivers in 2021.
Stimulus money provided households with money for goods, even as pandemic-related restrictions eased, and services spending rebounded, including at restaurants and bars. Meanwhile, retailers struggled with low inventories and increased consumer demand, especially from e-commerce.
Working to ease supply chain constraints, Bentonville-based Walmart chartered several ships to move cargo through less congested ports on the East Coast, re-routed inland shipments and used less conventional transportation methods to avoid rail delays to help get holiday shipments to the United States. The retailer also hired 20,000 supply chain workers to help move products through its facilities more quickly and added more than 3,000 drivers in 2021.
Pandemic-related plant shutdowns and shortages of labor and materials, such as computer chips, impacted factory output across the supply chain. Still, manufacturers continued to see growth throughout 2021 and expect it to continue into 2022.
4. MUSEUM MOVES
Crystal Bridges Museum of American Art — home to world-class American art, stunning architecture and 120 acres of Ozark forest with 5 miles of trails — turned 10 years old in 2021. And that wasn’t the Bentonville museum’s biggest headline of the year.
In April, founder and board chairperson Alice Walton announced an expansion project to add 100,000 to the 200,000-square-foot facility, making Bentonville an even greater destination for art aficionados from around the world.
Noted architect Moshie Safdie, who designed the original museum, will oversee the expansion effort to integrate existing pavilions and outdoor spaces. New structures will include galleries, education facilities, event spaces, a café, and unique spaces for indoor and outdoor gatherings.
The work is expected to be completed by 2024.
In November, the museum cast a gaze even further into the future when it announced Olivia Walton was the new chairperson of the museum’s board of directors. A board member since 2019, she has been married to Tom Walton, a grandson of Sam and Helen Walton, since 2016.
Alice Walton moved into a board member position while focusing on other organizations she’s founded in recent years focused on the arts, health and well-being.
5. HEALTHCARE ADVANCEMENT
Several developments in Northwest Arkansas and the Fort Smith metro helped healthcare continue its rapid evolution.
In March, Walmart Inc. heiress and philanthropist Alice Walton announced plans to build Whole Health School of Medicine and Health Sciences in Bentonville.
The first students will begin classes in 2024 and will graduate in 2028, working to “reimagine” American medical education to incorporate mental, emotional, physical and spiritual health — the elements of Whole Health. The independent, nonprofit medical school will be a standalone sister organization of Walton’s Whole Health Institute, an endeavor focused on holistic health and well-being.
In March, the University of Arkansas System board of trustees approved an $85 million project near Arvest Ballpark in Springdale proposed by the University of Arkansas for Medical Sciences (UAMS).
UAMS will build a 185,000-square-foot orthopedic and sports medicine facility. An opening date in 2023 is the goal.
And in Fort Smith, Arkansas Colleges of Health Education (ACHE) announced in May that Arkansas College of Osteopathic Medicine received accreditation from the Commission on Osteopathic College Accreditation.
ACHE also announced an anonymous $32.3 million donation to create and expand numerous health research and wellness programs. It also opened a 66,000-square-foot College of Health Sciences facility to house its physical therapy and occupational therapy programs.
6. COVID MANDATES
Large employers and schools in Northwest Arkansas implemented mandates to combat the spread of COVID-19. But states, including Arkansas, looked to challenge in court a federal vaccine mandate after state legislators approved vaccine exemptions and a mask mandate ban.
The White House announced in November that employees of certain employers must receive the COVID vaccine or face weekly testing by Jan. 4, 2022. However, before the announcement, large area employers had issued COVID vaccine mandates for their employees.
In July, healthcare provider Mercy announced it would require its employees to be vaccinated by Sept. 30. Mercy has more than 5,700 employees in Fort Smith and Northwest Arkansas.
Also, in July, Bentonville-based retailer Walmart said all market, regional and divisional employees working in multiple facilities and all campus offices must be vaccinated by Oct. 4.
In August, Springdale-based meat producer Tyson Foods said it would require all its U.S. employees to receive the vaccine by Nov. 1. Spokesman Derek Burleson said the mandate would affect about 120,000 processing plant and corporate office workers.
After the statewide mask mandate was lifted in March, masks continued to be required in many cities and schools across the state. Still, mask requirements were challenged in court, and a judge blocked the mask mandate ban that state legislators had approved in the spring.
7. MISSION LOCATION
Ebbing Air National Guard Base in Fort Smith was selected June 8 by acting Secretary of the Air Force John Roth to be the long-term pilot training center supporting F-16 and F-35 fighter planes purchased by Singapore, Switzerland and other countries participating in the Foreign Military Sales (FMS) program.
In addition to Ebbing, which is home to the 188th Wing, finalist sites for the center were Hulman Field (Indiana), Buckley Air Force Base (Colorado), Joint Base San Antonio-Lackland (Texas) and Selfridge Air National Guard Base (Michigan).
The Defense Security Cooperation Agency, the federal agency managing the FMS, notes that the program provides “responsible arms sales to further national security and foreign policy objectives by strengthening bilateral defense relations, supporting coalition building, and enhancing interoperability between U.S. forces and militaries of friends and allies.” The initial schedule has Ebbing receiving the Singapore F-16s in 2023 and the F-35s in 2024.
The Fort Smith Regional Chamber of Commerce, which estimates the center could have a $1 billion economic impact to the Fort Smith metro, reports that 345 U.S. military personnel would be part of the center and an estimated 180-plus members of the Singapore unit and around 300 dependents.
8. NIL ERA BEGINS
Every fan of collegiate sports should forever etch the day July 1, 2021, into their memory — for better or worse.
On that day, the NCAA’s decision to create an interim policy allowing athletes to profit off their name, image and likeness (NIL) was a startling policy change, one of the most monumental in the history of collegiate athletics.
Although its impact may not be known for some time, it’s not a stretch to say it eventually may result in billions of dollars in benefits collectively for college athletes.
At the University of Arkansas, anticipating the law change, officials announced the Flagship program in May to help Razorback athletes capitalize on the process and navigate state laws and various guidelines as the NCAA works with Congress to create overarching federal legislation. Campus partnerships with the Sam M. Walton College of Business and Office of Entrepreneurship and Innovation highlight the program.
UA officials said 159 Razorback athletes had entered into NIL agreements representing all 19 sports and approximately 375 deals by mid-December.
“Individually, a handful of female student-athletes have been among our highest earners,” said UA senior associate athletic director Terry Prentice.
The NCAA’s rule change also marks a massive new marketing opportunity for businesses — even if the ultimate return on investment has yet to be determined.
9. ROAD TO RECOVERY
The tourism industry is recovering from the effects of the COVID-19 pandemic but has yet to return to pre-pandemic levels. Even so, industry employment in Northwest Arkansas has started to exceed pre-pandemic levels.
In an October presentation on economic conditions in Northwest Arkansas, Mervin Jebaraj, director for the Center for Business and Economic Research at the Sam M. Walton College of Business at the University of Arkansas, said sectors hardest hit by the pandemic, including restaurants and hotels, are doing better than they have been. Still, they have not recovered to pre-pandemic levels. Hotels have yet to recover as business travel has not returned. The majority of the recovery in the hotel industry can be attributed to leisure travelers, such as those coming for events like Razorback games.
According to the U.S. Bureau of Labor Statistics, the state’s leisure and hospitality sector had 114,800 jobs in November, up from 114,700 in October and 111,200 in November 2020, but less than the 122,400 in November 2019. In Northwest Arkansas, sector employment fell to 28,000 in November, from 28,700 in October, but was up from 24,800 in November 2020 and 27,400 in November 2019. In the Fort Smith metro area, sector employment declined to 9,100 in November, from 9,300 in October, but was above the 8,400 in November 2020 yet below the 9,600 in November 2019.
10. CANOO COMES
In November, electric vehicle startup Canoo announced that it would move its corporate headquarters to Bentonville and establish a research and development center and advanced industrialization and low-volume production facility for small package delivery vehicles in the state. The investments will bring at least 545 high-paying jobs to Benton and Washington counties.
The research and development center will be in Fayetteville, supporting advances in vehicle electronics and powertrain. The industrialization facility will be in Bentonville.
The publically-traded company (NASDAQ: GOEV), with offices in California, Michigan, Minnesota and Texas, announced in June that Pryor, Okla., would be the site for its U.S. manufacturing facility. It noted the announcements were part of transforming the U.S. Highway 412 corridor from Oklahoma through Arkansas “into a center of electric vehicle research, development and manufacturing power.”
In March, the Torrance, Calif.-based company named Tony Aquila its CEO. Aquila said the company is completing definitive agreements with Arkansas and Oklahoma that will include “approximately $100 million in additional non-dilutive financial incentives, making the total approximately $400 million.”
Canoo was founded in 2017 in Torrance, near Los Angeles, and was initially called Evelozcity. The company has almost 800 employees. Vehicle production is expected to begin in 2022.