2013: Barber and Banks

A once-high-flying developer finally brought to justice, job-creation announcements seemingly one after another, a change in leadership announced by the world’s largest retailer, and a busy year in the banking industry — 2013 was a momentous year for business news in Northwest Arkansas.

As another year comes to a close, it’s time to take a look back at some of the highlights — or lowlights — of the past 12 months.

It has become a custom in our last issue of December to put together a list of what we consider the 10 biggest local business stories of the year.

It is always a fun task to compile and debate which stories belong where. We decided to keep our list focused on people and events in Northwest Arkansas, so you won’t see mention, for example, of the ongoing national debate about the health care overhaul.

Ultimately, we were most intrigued by the downfall of Brandon Barber.

If you’re scoring, it officially took four months. The former Northwest Arkansas developer was arrested in New York on March 20 and admitted his guilt to three federal charges in a Fort Smith courtroom on July 31.

The young and handsome Barber had made a reputation in this area for his visions of grand real estate developments.

From June 2003 to October 2008, entities controlled by or affiliated with Barber secured more than $200 million in loans from various financial institutions

 In the summer of 2006, Barber’s namesake company, The Barber Group, reached its peak when it had six projects — with a total estimated cost of $790 million — in various stages of development.

Other stories that attracted our attention in 2013 included more notable events in the arts and entertainment industry, a tumultuous year involving the Advancement Division at the University of Arkansas and the official arrival of alcohol in Benton County.

We hope you are just as intrigued as we are by our choices for the top 10 local business stories of the year.

 

No. 1 Brandon Barber Saga — From the time he was arrested in the spring until he pleaded guilty in the summer, former Northwest Arkansas developer Brandon Barber made headlines for most of the year.

Barber was arrested in New York by FBI agents on March 20 and faced 27 counts of various federal charges, including fraud and money laundering, all of which took place from 2005 to 2009 and were designed to defraud banks, creditors and the U.S. Bankruptcy Court.

He originally entered a plea of not guilty April 15, but pleaded guilty July 31 to three federal charges: conspiracy to commit bank and bankruptcy fraud and money laundering.

Barber has yet to be sentenced and has been behind bars at the Washington County jail since June, after U.S. Magistrate Judge Erin L. Setser found Barber had repeatedly violated terms of his home detention, which he had been under since his initial arrest.

Barber, who was represented by Rogers attorney Asa Hutchinson III and his father, Arkansas gubernatorial candidate and former U.S. congressman Asa Hutchinson, had been set to stand trial in the U.S. District Court of Western Arkansas in two separate cases concerning his $200 million fraud scheme. One was set for Sept. 16, with the other scheduled for Oct. 21.

Co-defendants James Van Doren, 37; Jeff Whorton, 45; and Brandon Rains, 32, also initially pleaded not guilty in the spring, but eventually pleaded guilty. They are free on bond until sentencing.

Fayetteville attorney Vaughn Knight, another co-defendant and Barber’s former attorney, was also convicted in November, but filed on Dec. 9 to have his jury verdict overturned.

Another co-defendant, named Gary Combs, died in August 2012.

Bentonville attorney David Fisher, 38, was added to the indictment in June but was acquitted in October.

 

No. 2 Banks Stay Busy — 2013 was a busy year for bank mergers and acquisitions.

On June 25, Conway banking company Home BancShares Inc. — holding company for Centennial Bank — announced it was buying Liberty Bancshares Inc. — holding company for Liberty Bank — in a $280 million deal.

The merger, the largest in state history, easily made Home BancShares the second-largest holding company in the state, with just more than $7 billion in assets. The merger was approved in October and as a result, 46 Liberty Bank branches in Arkansas — including 10 in Northwest Arkansas — are now operating as Centennial Bank.

In July, First Federal Bancshares of Arkansas Inc., a publicly traded company in Harrison and the holding company of First Federal Bank, announced the signing of a merger agreement to acquire First National Bank of Hot Springs and Heritage Bank of Jonesboro.

The two banks are wholly owned subsidiaries of First National Security Co. of Hot Springs.

Other news included:

• Arvest Bank of Fayetteville received regulatory approval in March for its purchase of 29 Bank of America locations throughout Arkansas, Kansas, Oklahoma and Missouri.

• In September, a U.S. Bankruptcy Court judge approved a $53.6 million bid by Simmons First National Corp. of Pine Bluff to acquire Metropolitan National Bank of Little Rock from Rogers Bancshares Inc.

• In early October, National Banking Corp. signed an agreement to sell 100 percent of its stock to Arvest Holding Company, a subsidiary of Arvest Bank.

NBC is the parent holding company for National Bank of Arkansas, based in North Little Rock.

• On Dec. 6, Chambers Bank and its holding company, Chambers Bancshares Inc. of Danville, announced plans to merge Decatur State Bank into Chambers Bank, completing a series of transactions that began in the fourth quarter of 2012, when Chambers Bank bought the majority interest of Peterson Holding Co., which owned all of the stock of Decatur State Bank and Grand Savings Bank of Oklahoma.

 

No. 3 Messy Millions — A year-end Top 10 list would not be complete without mentioning the embarrassing drama that unfolded in the Advancement Division at the University of Arkansas.

The fundraising arm of the state’s flagship school went on a spending spree from fiscal 2009 to 2012, and wound up with a whopping deficit of $4.1 million. Once the news went public, the Division of Legislative Audit was asked to sift through reams of financial records to find out just what had happened.

In the end, advancement chief Brad Choate was sacked, as was budget officer Joy Sharp and university spokesman John Diamond. Along the way, chancellor G. David Gearhart was accused of being less than forthcoming in response to open records requests from the media.

Legislative Audit turned its Investigative Report over to the Washington County prosecutor, who concluded that no criminal activity ocurred. The snafu make Gearhart and the university look silly.

 

No. 4 McMillon is the Man — On Nov. 25, the speculation ended for Walmart-watchers.

Doug McMillon, an Arkansas native and University of Arkansas graduate, was announced as the next CEO of the company. McMillon, the president of Walmart International since 2009, will succeed Mike Duke on Feb. 1.

McMillon is a longtime company man, starting as a buyer trainee while in graduate school in 1990, and eventually working in all three Walmart divisions of food, apparel and general merchandise. He was also the CEO of Sam’s Club from 2006 to 2009.

As the Walton family’s choice, McMillon, 47, will have full support from a loyal base of shareholders.

Still, there are challenges he inherits, primarily on the digital front, where the company has invested heavily as of late while attempting to play catch-up with Amazon.

 

No 5 Payroll Rally — One of the great themes of 2013 was job creation in Northwest Arkansas. No fewer than four companies expanded into this area and in so doing created about 2,000 public- and private-sector jobs.

First came Serco, a government contractor, announcing up to 1,500 hires to staff a Rogers mail center in support of the Affordable Care Act.

Then came Redman and Associates, the Bentonville-based manufacturer of ride-on toys, with the announcement that it was outsourcing more than 70 jobs from its plant in China to Rogers.

In Springdale, plenty of civic leaders were on-hand in October, when South Coast Baking Co. unveiled its plans to renovate a vacant warehouse and turn it into a manufacturing facility for cookie dough. South Coast is a major supplier for Sam’s Club and Panera Bread, and officials said the facility will employ as many as 150 people.

And finally, in November, Springdale-based American Tubing announced a $3.2 million expansion of its facility and 50 new jobs. American Tubing makes copper tubing for air conditioning and refrigeration systems.

 

No. 6 AMP Move — The Walton Arts Center Council announced this year its outdoor music venue, the Arkansas Music Pavilion, would be relocating from Fayetteville to a permanent facility in Rogers.

The new location of the AMP, as it is commonly called, is just off Interstate 540, south of the Embassy Suites Hotel on land donated by Johnelle Hunt, widow of J.B. Hunt.

Construction on the 6,000-seat, $11 million venue began this fall and is slated for completion this spring, in plenty of time for the summer concert season.

The project is being funded by a $3 million interest-free loan from Hunt, a $1.5 million gift from the Willard and Pat Walker Charitable Foundation and various other donations, including a $500,000 pledge from the city of Rogers.

The AMP previously was located on the Northwest Arkansas Mall parking lot since 2005 and was purchased by the Walton Arts Center in February 2011.

WAC originally planned to renovate the facility, moving it from the blacktop of the parking lot to a more traditional venue in a natural setting adjacent to the mall. 

WAC announced the move to Rogers in May and the 2012 summer concert season took place at the Washington County Fairgrounds. 

 

No. 7 Booze Blitz — From the day Benton County voters in November 2012 passed a measure legalizing liquor sales and manufacturing, droves of business owners started vying for their piece of the cash cow.

Arkansas Alcoholic Beverage Control received about 300 liquor license applications, and in June announced the 55 businesses that would be considered for permits during a series of ABC hearings.

At the conclusion of the hearings on Dec. 18, 52 liquor licenses had been issued in Benton County, with 15 of those stores listed as open and in business, said Judy Chwalinski, administrative assistant to the director of ABC. The rest of the permits were granted on a conditional basis, while construction of buildings is completed and other details of opening the businesses are ironed out.

ABC is also involved in five ongoing lawsuits pertaining to Benton County liquor permits. “It’s been a mess, just because there are so many people trying to get the licenses,” Chwalinski said. 

The limited number of permits are for hard liquor.

 

No. 8 Dentsu Deal — The year was only a few days old when Dentsu Network Inc. announced the acquisition of Fayetteville-based Mitchell Communications Group.

Terms of the deal were not disclosed, but MCG CEO Elise Mitchell joined the executive team and operating committee of Dentsu, thus making her responsible for building Dentsu’s global public relations network.

Mitchell maintained her role at MCG, which is still headquartered in Fayetteville, and Sarah Clark, the strategic communication firm’s executive vice president and chief strategy officer, was promoted to president.

 

No. 9 Art Abounds — In recent years, Northwest Arkansas has increased its art offerings, most notably with the opening of Crystal Bridges Museum of American Art, and is steadily building up to be a cultural hub. 

2013 was another big year for the arts.

Official plans for the Amazeum, an interactive family museum near downtown Bentonville, were revealed in June, and it is set to open sometime in 2015.

Also in Bentonville, Crystal Bridges marked its one millionth visitor in August, and 21c Museum Hotel, which features contemporary art, opened its doors in February.

In addition, Fayetteville voters in November approved $6.9 million in bonds to be issued to help fund a $20 million renovation and expansion of the Walton Arts Center. Improvements to the 22-year-old building are scheduled to be finished sometime in 2016.

 

No. 10 Auto Zone — A sign that the post-recession economy of Northwest Arkansas had recovered was evident in the sector of automotive sales, where dealers from central Arkansas made major investments in the region.

Dwight Everett, through an entity called Everett CDJR Land Company LLC, in August bought the Chrysler Dodge Jeep Ram dealership at 3709 S. Thompson St. in Springdale for $6 million and said he planned to renovate the location. The Chrysler location is in addition to his Everett Buick GMC in Bentonville and his Everett Chevrolet in Springdale.

In July, the Northwest Arkansas Business Journal learned that longtime Springdale car dealer Steve Smith, owner of Steve Smith Country at 6372 W. Sunset Ave., had reached an agreement to sell his Buick and GMC dealership to Crain Automotive Holdings of Sherwood.

Earlier in the year, Crain had entered the Northwest Arkansas market when it purchased Kent Dobbs Hyundai at 3558 S. Thompson St. in Springdale and Hyundai of Bentonville at 3000 S.E. Moberly Lane.

In October, CAH also announced it was planning to relocate the Springdale Hynudai dealership to a site just west of Interstate 540 in Fayetteville, south of the Garland Road exit.