It is no secret that the Fort Smith economy has had its ups and downs throughout the recession, but things are starting to look up according to one local economist.

Dr. Kermit Kuehn, director of the Center for Business Research and Economic Development at the University of Arkansas at Fort Smith, told attendees of the Fort Smith Regional Economic Outlook Forum that the worst is likely behind the region, though there has been a snag in the recovery. The forum was also sponsored by Arvest Bank.

"Looking at the most recent numbers, in May the non-farm jobs has improved 1% in May over the previous year, which is what I've been talking about, which is employment has been showing signs of improving while the unemployment rate seems to be working higher on the average."

Even with the hiccup in the recovery, Kuehn said the public's view of the economy, while not markably higher, is less pessimistic.

The Fort Smith region, which was once largely dependent on manufacturing jobs, has lost nearly 10,000 jobs in that sector, he said, adding that the recovery that is underway is largely in other areas of the economy not necessarily tied to the manufacturing of goods.

Instead, much of the growth experienced in recent years have been in the healthcare industry, where there has been an explosion of of growth, according to Kuehn.

Kevin Kliesen, a business economist and research officer with the Federal Reserve Bank of St. Louis, also spoke at the event. He pointed to another area that is seeing a lot of growth nationally – new home construction.

The industry, he said, is starting to see a resurgence in the Fort Smith area in recent months as home prices have increased and interest rates have remained low.

"Housing is clearly the source of strength for the economy and housing is a tide that can lift all boats in terms of other parts of the economy."

The growth in new homes is something that has been seen across the region, not just in Fort Smith, with the most recent building permit report for Fort Smith, Greenwood and Van Buren showing a 38.9% increase in permit values for the first part of this year.

What can possibly throw a wrench in the growth in the housing market, Kliesen said, would be if the Federal Reserve were to raise interest rates. But he added that such a rise is not the sudden halt to the market that other economists think it will be. Rather, it will just slow the growth.

"Interest rates have popped recently. That has filtered into mortgage rates. This chart shows you the conventional mortgage rate since the first of the year. For most of the year, a 30-year conventional was running a little under 4%, and you compare that with the average of what it was (before the recession) and it was around 6%. You can see the mortgage rates are still extremely low compared to historical terms,” Kliesen explained.

While Kuehn and Kliesen expressed optimism toward growth in certain industries, one industry that has been surprisingly weak during the first part of this year has been retail.

Kuehn said he could not explain why the retail sector in the Fort Smith region was "down considerably" even though consumer sentiment had risen.

"You can see in discussions with the city of Fort Smith about revenue shortages and unexpected things like that, so this is evidence of retail sales not holding up to last year's performance."

In order to not only recover the retail sector, but to continue to recover and rejuvenate the overall Fort Smith regional economy, Kuehn said evaluating strengths and weaknesses was important for local business and government leaders.

Finding what sectors did well during the recession, he said, helps to determine what the area's competitive advantage is, and with an understanding of the area's competitive advantages, you are able to sell those to potential industries and businesses.

"Knowing what you're good at as a community can help target companies to come to the region. In other words, targeting instead of just taking anything that comes. You want to take what comes, but you want to target what you're suited for. And knowing what you're not good at as a community can help you with solutions to enhance your strengths, be good at what your good at," Keuhn said.

He later added that Fort Smith has strengths, "we just need to understand them and how they work and how to enhance them and how to sell them. And life can become different."

(For an independent look at economic conditions in the Fort Smith region, link here to the first quarter 2013 report of The Compass Report.)

Serco, an information and technology service provider, has set its sights on Rogers for a new facility slated to open this fall. The company’s domestic base is in Virginia, but the firm is headquartered in the United Kingdom.

Rogers city officials said Serco is expected to bring at least 600 jobs to the area, when it sets up shop in the vacated Emerson building later this year.

The Rogers Chamber of Commerce said Serco will be screening applicants in Northwest Arkansas within a few weeks and making a strong push to hire veterans.

Serco has posted 20 jobs in Rogers on the career page of its website.

The ongoing real estate recovery is making progress in better pricing and increased sales but increased foreclosures activity and rising interest rates could cool local markets in the coming months.

Arkansas ranked highest in the nation last month in bank repossessions, up 145% from the same period in 2012, according to RealtyTrac.com.

Bank repossession is the final stage in the foreclosure process which can take between 180 to 550 days to complete depending on state laws and complications for secondary liens.

There were 793 new foreclosure filings in June across the Natural State, up 99% from a year ago. So far this year, 4,625 households in the state had at least one foreclosure filing, according to RealtyTrac.

Benton County has also been active reporting 103 new filings in June, up 83% from a year ago. There were 53 new foreclosure filings in Washington County last month, up 55% from the year-ago period.

The Fort Smith metro area also saw a rise in June foreclosure activity. Filings rose 58% in Sebastian County with 19 new cases. In Crawford County there were 23 filings, up nearly 44%, according to RealtyTrac.

While foreclosures activity is heating up, the number of properties involved is far from the volume seen between 2007 and 2010.

Litigation in federal court stalled hundreds of foreclosures across Arkansas between late 2011 through most of last year for banks domiciled outside the state. An appellate court ruling handed down on Tuesday (July 9) affirmed the lower court decision that allows J.P. Morgan and other banks based outside the state to use the non-judicial method of foreclosure.

Arkansas law provides lenders with an abbreviated method of foreclosure, known as “statutory” or “non-judicial.” This method does not require a judge’s signature or legal court proceedings.

Now that the litigation has been resolved, lenders continue to push inventory back onto the market. In some cases these homes have sat vacant for two years or more. Agents say now that inventories are extremely low, lenders are more eager to list these properties for quick sale. There are 296 bank-owned homes in Northwest Arkansas listed for sale in the Multiple Listing Service

The distressed home inventory is down from 306 listings this time last month, according to Jim Long, agent with Crye-Leike Realty in Bentonville. Distressed listings have risen from 249 in April and 222 in March and includes all four counties in this report.

Since July 1, there have been 44 new listings of bank-owned homes, priced from $429,000 in Shadow Valley down to $36,360 in eastern Rogers, according to Long.

“We are seeing more of these distressed listings but they are selling pretty quickly,” Long said.

Agents from Bentonville to Fort Smith have sold 678 bank-owned properties this year, which is roughly 16% of the total market activity, according to MountData.com.  

“Halfway through 2013 it is becoming increasingly evident that while foreclosures are no longer a problem nationally they continue to be a thorn in the side of several state and local markets, particularly where a backlog of delayed distress has built up thanks to a lengthy foreclosure process,” said Daren Blomquist, vice president at RealtyTrac.

He said lenders will push more properties on the market, which could have a slight dampening effect on price gains seen in recent months.

George Faucette, CEO of the Northwest Arkansas Coldwell Banker franchise, said the price gains realized over the past year because of reduced inventory will be tested in the coming months as more distressed sales are recorded.

Real estate experts say rising interest rates are the biggest threat to the housing recovery, and that’s because foreclosures remain a small percentage of the overall market.

A recent spike in interest rates is a concern, according to research conducted by Trulia.com. An online survey found 56% of consumers who were buying now said at 6% they would be discouraged enough to walk away.

Rates have moved higher for the past six weeks, which is a concern for buyers in more expensive markets.  

Nationally, the 30-year rate was 4.48% on Wednesday (July 10), up from 3.52% since May 1, according to Bankrate.com

Analysts said rates under 5% are still a great deal, but with each rising percentage point buyers are forced to shave back the amount they can spend. This is deemed problematic now that home prices are also moving higher.

Long said agents are watching rate sheets far more closely these days because higher interest levels do reduce buying power.

Foreclosure Filings (January through June)
Benton County
2013: 718
2012: 393

Washington County
2013: 356
2012: 289

Sebastian County
2013: 142
2012: 89

Crawford County
2013: 113
2012: 46

State of Arkansas
2013: 4,682
2012: 2,265

United States
2013: 801,359
2012: 1,045,801
 

If Wal-Mart is to win the battle to do business in Washington D.C., it looks it will be through online sales.

Wal-Mart said it is scrapping plans to build three stores in the nation’s capital city, after the city council passed a bill late Wednesday (July 10) that would require big retailers to pay starting wages that are 50% higher than the city’s minimum wage.

The Bentonville-based retailer announced plans to expand into Washington D.C., in late 2010 planning six stores that would have brought roughly 1,800 retail jobs to the city, according to the retailer’s website.

Three of those stores are already under construction and Wednesday’s vote has led Wal-Mart to review its legal and financial options in this matter. Two of the stores are slated to open this fall.

The retailer published an op-ed article in the Washington Post on Tuesday. Wal-Mart warned in the article it would pull out of the city if the council passed the Large Retailer Accountability Act of 2013.

“From day one, we have said this legislation is arbitrary, discriminatory, and discourages investment in D.C. We have gone to great lengths to have thoughtful conversations with Council members about why LRAA will result in fewer jobs, higher prices and a smaller number of total retail options. It means most shopping dollars will stay in the suburbs, unemployment will remain in the double-digits in some neighborhoods and underserved communities will continue to have disproportionate access to affordable groceries,” Alex Barron, regional general manager for Walmart U.S., noted in the article.

The bill would require Wal-Mart and other larger retailers to pay workers no less than $12.50 per hour. The city has a minimum wage of $8.25 per hour. The rule does not apply to retailers with unionized work forces and it gives other retailers already doing business there four years to comply.

Mayor Vincent Gray could still veto the bill and Congress could be swayed to use its local control to keep the legislation from being enacted.

Bill Simon, CEO of Walmart U.S., told media recently that the retailer would not waste time and resources pursuing markets posing heightened opposition. He said there are plenty are markets that welcome Wal-Mart with open arms.

The Northwest Arkansas Regional Airport (XNA) is the only one of Arkansas’ three largest commercial airports to report positive year-to-date enplanements.

For the first six months of 2013, enplanements are up more than 3% at XNA, and down almost 4% at the Fort Smith Regional Airport. For the first five months of 2013, enplanements at the Bill & Hillary Clinton Airport (Little Rock National Airport) are also down almost 4%. (As of July 11, officials at the airport did not have June numbers.)

XNAACTIVITY

Travelers flying out of XNA during June totaled 56,889, up 1.94% compared to the 55,777 during June 2012. The airport has more than 13 service connections.

For the first six months of the year, XNA enplanements total 285,183, up 3.18% compared to the same period in 2012. Traffic gains are trending positive at the airport. Enplanements were up 2.42% during the first quarter of 2013 compared to the 2012 period.

Enplanements could tick higher,  American Airlines is adding non-stop flights from Northwest Arkansas Regional Airport to Los Angeles International Airport in Southern California starting Aug. 27.

Enplanements at XNA totaled 565,045 during 2012, up just 0.4% compared to 2011. Although slight, the gain prevented XNA from posting two-consecutive years of enplanement declines.

XNA’s first full year of traffic was 1999, and the airport posted eight consecutive years of enplanement gains before seeing a decline in 2008. It reached a peak of 598,886 in 2007.

Chicago-based Fitch Ratings recently affirmed its “BBB” rating on $33.4 million in bonds, and provided a a rating outlook of “Stable.” The Fitch report indicated the airport’s cost per enplaned rate of $5.92 is “comparatively low” among similar airports. Also, the report said non-airline revenue – 88% of operating revenue in 2012 – is expected to grow with increase concession revenue from the new airport concourse.

However, Fitch noted the airport’s reliance on a few large corporations does come with a potential downside.

“The air trade area's established business profile with large corporate presence (i.e. Walmart and Tyson Foods) is a credit strength, but there is potential for on-going economic sensitivity of these industries that may result in some volatility in enplanement activity,” noted Ashley Ulrich, the primary analyst for Fitch’s XNA report.

FORT SMITH TRAFFIC
The Fort Smith Regional Airport, which is served by flights from Memphis and Dallas-Fort Worth, posted June enplanements of 7,876, down 1.4% compared to June 2012.

For the first six months of 2013, enplanements at the airport total 42,041, down 3.9% compared to the same period in 2012. The rate of decline is improving. Enplanements during the first quarter were down 7.4% compared to the same period in 2012.

Enplanements at the Fort Smith Regional Airport totaled 86,653 during 2012, just ahead of the 86,234 in 2011, and marking three consecutive years of enplanement gains.

American Airlines enplanements out of Fort Smith during the first half of 2013 total 24,574, down 4.4% compared to the same period in 2012. Delta enplanements during the first half of 2013 total 17,467, down 3.35% compared to the same period of 2012.

LITTLE ROCK

Enplanements at the Bill & Hillary Clinton Airport (Little Rock National Airport), totaled 445,896 during the the first five months of 2013, down 3.92% compared to the 2012 quarter. May 2013 enplanements totaled 104,483, down 4.98% compared to May 2012.

Enplanements in 2012 totaled 1.147 million, up 4.07% compared to 2011. The 2012 numbers also ended five consecutive years of enplanement declines at Arkansas’ largest commercial field.

Major staff changes were announced Thursday (July 10) at the troubled Division of University Advancement at the University of Arkansas. The advancement division manages the university’s critical capital campaigns.

The advancement division has been under review for a $3.3 million deficit. The previous advancement chief was removed from the post, and on Feb. 7, University of Arkansas Chancellor G. David Gearhart asked auditors for the Arkansas General Assembly and the University of Arkansas System to perform independent audits of spending within the university’s advancement division. An audit report could come as early as late July.

In December 2012, Brad Choate resigned as vice chancellor of the division and Joy Sharp resigned as budget director.

Following the Feb. 7 announcement, Gearhart named Chris Wyrick the new vice chancellor for university advancement. At the time, Wyrick was serving as executive director of the Razorback Foundation.

In the UA statement issued Thursday, Wyrick said his goal was to make changes to the university’s fundraising division without reducing staff.

“Change is never easy, but sometimes it is necessary,” said Wyrick. “I think everyone, inside and outside this division, expected changes. At the same time, my prime goal was to ensure that no jobs were cut, and we did achieve that goal. The reorganization decisions were made after a thorough review of the entire division by the university’s office of human resources. It wasn’t an easy process, but it was valuable and needed to be done.

As part of the restructuring, the office of university development, the chief fundraising arm of the Advancement Division, will move forward under new leadership, with Mark Power named the new associate vice chancellor for university development. Power replaces Bruce Pontious, who recently announced his retirement as associate vice chancellor for development.

“This presented us with a tremendous challenge,” Wyrick said of Pontious’ retirement. “Bruce is one of the most respected advancement professionals in higher education – he is not someone you simply replace. But we are very fortunate here at the U of A to have a deep pool of talented and experienced people who are willing to accept a challenge. Mark Power was an instrumental leader in the Campaign for the Twenty-first Century, and he has worked closely with Bruce since that time. I am confident that Mark will be the kind of vital leader that can move development forward.”

University officials say the re-organization increases the number of people working on university initiatives.

“This alone will be a great asset to our fundraising efforts,” Wyrick said.

Following are the other staff changes announced Thursday.
• Katy Nelson-Ginder was promoted to assistant vice chancellor of development for external relations. The promotion was effective July 1.

• Brenda Brugger has been named assistant vice chancellor of development for internal operations; Ashlie Hilbun is now the interim director of development for the J. William Fulbright College of Arts and Sciences. The promotion was effective July 1.

• Greg Lewis, will assume the duties of director of corporate and foundation relations in development, effective Aug. 1.

• Denise Reynolds, a 19-year veteran in the finance and administration division, has been promoted to the position of assistant vice chancellor for finance and human resources. The promotion was effective July 1.

• Eunice Alberson now has the position of human resources manager in the vice chancellor’s office, and Stephanie McGuire is now assistant to the finance officer. The promotions wre effective July 1.

• Melissa Banks has been promoted to executive director of donor relations and special events, effective July 1.

• Ede Hogue will be the new associate director of donor relations and special events, and Robin Adams has been promoted to the new position of manager of donor relations and special events. Those two promotions are effective Aug. 1.

The U.S. House of Representatives on Thursday (July 10) narrowly approved a five-year farm bill measure that did not include funding for food stamp programs. The passage creates uncertainty with U.S. farm policy because the vastly different U.S. Senate farm bill included food stamp funding.

HR 2462, the Federal Agriculture Reform and Risk Management Act of 2013, was approved in a narrow 216 to 208 vote. U.S. Reps. Tom Cotton, R-Dardanelle; Rick Crawford, R-Jonesboro, Tim Griffin, R-Little Rock, and Steve Womack, R-Rogers, voted for the bill. All Democrats and just 12 Republicans in the House voted against what is being called the “split” farm bill because it did not include a measure to fund the Supplemental Nutrition Assistance Program (SNAP) – aka, the food stamp program.

Thursday’s vote was the second time the U.S. House voted on a farm bill.

On June 20, a farm bill failed on a 195-234 vote with Crawford, Griffin, and Womack voting for it. Cotton voted against it and cited opposition to the food stamp program as a reason for his vote.

The U.S. Senate on June 10 approved a five-year farm bill by a 66-27 vote, with U.S. Sens. Mark Pryor, D-Ark., and John Boozman, R-Ark., voting for the legislation that would cut $4 billion over 10 years from the food stamp program. Boozman was one of 15 Republicans to join with Democrats in voting for the legislation.

Cotton said Congress can pass a farm bill and later address the food stamp program.

“I trust the Senate Democrats, having already voted for very similar farm programs, will support speedy passage of this bill and not insist upon holding Arkansas farmers hostage to Barack Obama’s wasteful food-stamp program. The Congress will work to reform food stamps at a later date, but it should pass a Farm Bill now,” Cotton noted in a statement.

Randy Veach, president of the Arkansas Farm Bureau, was not happy with the split bill vote. He said the decision to separate farm policy from the food stamp program “put members of the Arkansas delegation in a very difficult situation.” He also expressed concern that the split bill raises the possibility that a farm bill may never happen.

“We are disappointed in House leadership for choosing to split the bill and repealing the permanent law status of the Farm Bill, which creates the possibility that we will never write a Farm Bill again,” Veach said in a statement. “We still have a long way to go to get to passage of a five-year Farm Bill. The challenge will be in conferencing the vastly different proposals from the Senate and the House.”

U.S. Rep. Frank Lucas, a Republican from Oklahoma and chairman of the House Agriculture Committee, said he hopes to get a combined plan to Obama.

"Today was an important step toward enacting a five-year farm bill this year that gives our farmers and ranchers certainty, provides regulatory relief to small businesses across the country, significantly reduces spending, and makes common-sense, market-oriented reforms to agricultural policy. I look forward to continuing conversations with my House colleagues and starting conversations with my Senate colleagues on a path forward that ultimately gets a farm bill to the President's desk in the coming months," Lucas said in a statement.

Provisions of the bill passed Thursday include:
• Direct Payments are eliminated and no payments are made to those who don't farm;

• Traditional farm policy is cut by almost $23 billion – a record 36 percent reduction;

• Cuts include repealing Direct Payments, Counter-Cyclical Payments, the Average Crop Revenue Election (ACRE) program, and the Supplemental Revenue Assistance Payments (SURE);

• Seeks to streamline 23 conservation programs into 13, with a projected savings of more than $6 billion;

• Producers are limited to a risk management option that offers protection only when they suffer significant losses.

• The language would change crop insurance, a successful public/private partnership that ensures farmers have skin in the game, according to Lucas; and,

• In total, farm policy spending is reduced by almost $14 billion.

Link here for a PDF of HR 2462.

Following are comments from the other members of Arkansas House delegation.
• U.S. Rep. Rick Crawford
“Today, the House took the first step in the long process of putting a full, five-year Farm Bill in place. This is not a perfect bill, nor is this approach my first choice. However, more than anything Arkansas must have a Farm Bill in place. Passage of this measure puts us one step closer in getting to conference with the Senate, where I hope to continue to influence the debate in a way that represents our state’s best interests.

“We still have a long road ahead. I plan to work as closely as possible with Arkansas’ agricultural community to make sure what is signed into law is positive for the industry and responsibly reforms government programs. I believe this bill is a positive step toward eliminating duplicative programs and streamlining government spending. We can still reach for reform. We will continue to do so on behalf of Arkansas agriculture and rural America.”

• U.S. Rep. Tim Griffin
“This farm bill represents a good first step towards protecting taxpayers and providing security for Arkansas farmers and ranchers, so I support it. It will reduce spending, cut unnecessary and overly burdensome regulations, eliminate duplicative programs and modernize farm policy by ending direct payments and establishing a new risk-management system to protect farmers who suffer significant losses. It ensures the agricultural community isn’t taken backwards to a law passed over half a century ago, and it guarantees affordable food for American families.”

• U.S. Rep. Steve Womack
"Agriculture is the backbone of Arkansas’s economy, and our farmers shouldn’t suffer because of Washington’s dysfunction. While I am frustrated with today’s vote, failing to pass a farm bill is not an option. With the passage of H.R. 2642, the House can now turn its attention to reforming the massive nutrition programs that have put one-in-six Americans on food stamps while ensuring that we provide critical assistance to those who are truly in need."

An alleged lack of procurement protocol brought to attention by Bella Vista Alderman Jerry Snow is under investigation by the Arkansas Division of Legislative Audit, the regulatory body tasked with overseeing the checks and balances of state and local governments.

Tim Jones, spokesman at the state agency in Little Rock, confirmed Thursday (July 10) that the audit is being conducted on the Bella Vista procurement procedures.

Jones could not release any details, but did say the agency has worked on the audit for the past few weeks and a full report will be made public once the probe is completed.

Snow has publicly raised concerns over “questionable business practices” regarding then pending and past purchases of several dump trucks planned by the city. He said the city “waived the competitive bid process” back in April 2012, which is against state statute and more recently using bid specifications that could only be met by Kenworth.

“I don’t know why the mayor and city council majority are so set on rubber-stamping a bid process that is not consistent with state statutes,” Snow said.

Mayor Frank Anderson and city attorney Bryan Vernetti did not return calls made to their offices at late Thursday afternoon.

The city spent $228,952 in April 2012 on two dump trucks and a spreader after they waived competitive bidding when MHC Kenworth was the lone bidder.

In April 2013, the city set out to buy more dump trucks, using the same bid specifications from a year ago. The bid requirements for the two dump trucks as advertised in the local newspaper were written specifically for Kenworth, according to Snow and two other truck dealers contacted – Diamond International in Little Rock and Macks Truck in Lowell.

When Snow continued to question the bid specifications last month, the council failed to get a majority vote to purchase the two new trucks and the issue has not been re-introduced.

The City Wire contacted John Leverett, procurement specialist for the Arkansas Department of Finance, who said any time the specifications are too narrow that they exclude other manufacturers the bid is out of compliance.

Snow said his main objective is to see that the city get the best deal and follow state guidelines since they are using taxpayer dollars He said Benton County had a similar situation where they attempted to purchase dump trucks using bid specifications that only Kenworth could meet.

“The Benton County Attorney reviewed the matter and advised they should rebid based on competitive specs. Bids were received from six manufacturers with Kenworth being the high bidder. There was $30,000.00 difference in the bids from International and Kenworth,” Snow said.

He said there is no guarantee Bella Vista would get six different bids, but he wants to see the “true competive bidding” process work.

Harry Newby, a retired resident of Bella Vista and a former city attorney in another state, said there are lots of questions dating back to the purchases a year ago that should be investigated before more taxpayer money is spent. He said advertising for bids in the local newspaper does not likely meet the standard requirement for published notice. He said waiving competitive bidding is only allowed when there is a natural disaster and the need is too great to wait on the formal bid process to take place.

Little Rock-based Bank of the Ozarks second quarter net income rose 6.8% to $20.4 million.

For the six months ended June 30, 2013, net income totaled $40.4 million, an 8.9% increase from net income of $37.1 million for the first six months of 2012.
Bank of the Ozarks CEO George Gleason attributed the gains to success in its loan and lease business.

“Our capabilities to generate loan and lease growth were evident in our second quarter results,” Gleason said. “Our balance of loans and leases outstanding, excluding covered loans and purchased non-covered loans, increased $286 million in the quarter just ended. Our unfunded balance of closed loans increased $146 million during the second quarter, growing from $789 million at March 31, 2013 to $935 million at June 30, 2013. These are noteworthy results given current economic and competitive conditions.”

The bank’s loans and leases stood at $2.96 billion at the end of June, a 9.7% increase from $2.69 billion one year ago.

Other financial highlights from the quarter included:
• Deposits were $2.98 billion at June 30, 2013, a 6.3% increase compared to $2.81 billion at June 30, 2012.

• Total assets were $4.04 billion at June 30, 2013, a 7.4% increase compared to $3.76 billion at June 30, 2012.

• Net interest income for the second quarter of 2013 increased 2.8% to $43.5 million compared to $42.3 million for the second quarter of 2012.

• Non-interest income for the second quarter of 2013 increased 20.9% to $19.0 million compared to $15.7 million for the second quarter of 2012.

Bank of the Ozarks (NASDAQ: OZRK) stock closed trading on Thursday at $45.29 per share, near the high end of its 52-week range of $29.60 – $46.85 per share.

AT&T said last week it plans to acquire Leap Wireless, parent company of the Cricket brand, with an offer of $15 per share in cash (about $1.2 billion). Under the proposal, AT&T will also assume Leap’s $2.8 billion of net debt. 


In a release, AT&T said it would maintain the Cricket brand name, and look to expand its presence into additional U.S. cities. Leap’s network covers about 96 million people in 25 states.

The company said the acquisition would be “increased competition, better device choices, improved customer care and a significantly enhanced mobile Internet experience” for pre-paid wireless customers.
 

The local real estate market has picked up steam this year rallying to the best results since the 2008 recession, according to local agents.

June was no exception with agents selling 620 homes in Benton and Washington counties, according to MountData.com. There were another 676 pending sales as of July 1. Pending sales are a leading indicator of future transactions, according to Paul Bynum, market analyst with MountData.com.

Unit sales in Benton County rose 7.7% in June from a year ago and sales volume jumped 11% to $78 million. Through the first half of 2013 this local market has been hot with 2,125 sales valued in excess of $392.685 million. Agents sold 275 more homes this year than last and total sales volume is up by more the $72 million through the first half of the year in Benton County.

In June, Washington County units sales were down 2% at 244 properties. But total sales volume rose 3.2% to $43.107 million, according to MountData.com.

Through the first half of this year, agents sold 1,267 homes in Washington County, units rose 12.8%. Total volume was more than $218.598 million, up 22% from the same period last year.

The local Coldwell Banker franchise reports its sales volume rose 13% in June and is up 25% through the first half the year, compared to the same periods in 2012, according to CEO George Faucette.

“Our new written business continues to keep pace with the closed business,” Faucette said. A sign the engines propelling the local market continue to run at steady speeds.

SELLER’S MARKET
The term “seller’s market” has not been said for several years across Northwest Arkansas amid record inventory levels left over from the market peak in 2006.

But 2013 is a different story as inventory levels remain low with 3,596 homes listed for sale as of July 1. Roughly 290 of those listings are new properties and about 300 more are bank-owned foreclosures.

Bynum said there is a shortage of homes – less than a four-month supply – priced below $100,000, in the Northwest market. He considers that a seller’s market. Jim Long, agent with Crye Leike Real Estate in Bentonville, agreed there isn’t enough quality property listings below $100,000, or even $125,000.

“We could all use more listings in these lower price categories because there are plenty of buyers looking,” Long said.

FIRST-TIME BUYER
Brianna Manning, a senior at the University of Arkansas, spent the past three months looking for her first home.

“We must have looked at 30 or more houses within my budget of $85,000. And most were in poor shape or would require too much money to get them up to my liking,” Manning said.

But she did recently purchase a foreclosure in south Springdale, near the Fayetteville line for $75,500, a great deal at roughly $58 per square foot.

“I got a three bedroom, two bath home with a large backyard for my Labrador, Barkey, and it came with all the appliances, except the washer and dryer,” Manning said.

At 20, Manning said she really didn’t want to throw money away renting if she could get a home of her own. With a little help from family, Manning said she qualified for an FHA loan and her total payment is $500 per month, which is $200 less than just about any three bedroom home she could have rented.

“The location is perfect for me for it’s not too far from the stable where I keep my horse and it’s just a short drive to the university with easy access to I-540.” Manning said.

LOCATION VALUE
Vickie Briolat, agent with Crye-Leike Real Estate, said location is important to seller’s getting the prices they want.

“While prices are better in many areas, there is still a gap in the outlying areas such as Pea Ridge,” Briolat said. “I have a beautiful listing in Pea Ridge, 1,700 square-feet, granite countertops, pristine condition home built in 2006. We have gotten three offers, but no where near the $144,000 listing price. Two were so low, we couldn’t even counter.”

She has another listing in Pea Ridge at $108,000 and the top offer received has been $90,000.

“While the market is much busier, there is still the mindset among some buyers that they can steal the property. While that may be true when bidding on foreclosures, that is not the case across the board,” Briolat said.

She said homes in the larger cities are selling much better than in the outlying areas, which have not caught up with broader market trends.

PRICE APPRECIATION
Median home prices in Benton County have risen $11,000 this year, up 7.9% from the same period in 2012. The median price per-square-foot was $81.80 among the 2,125 homes sold in Benton County this year. That compared to $75.10 last year, and $66.8 in 2011.

Agents said the better pricing is tied directly to the lower inventory levels and steady demand from buyers across Benton County, one of the fastest growing areas in the state and nation.

In Washington County, the median home price for the first half of 2013 was $146,300, that is up 9.1% from a year ago. 
The price per-square-foot of $85.2 increased from $79.8 a year ago. In 2011, the median price per-square-foot was $69.60.

As long as inventory levels stay low and buyers feel compelled to act there is still room for price appreciation in the back half of this year. However, agents don’t expect prices to escalate as quickly as there are more foreclosures moving back into the market.

Long said there were 44 new foreclosure listing to hit the MLS between July 1 and July 10.

Northwest Arkansas Home Sales (January-June)
(Benton and Washington Counties)

Total Sales Volume
2013: $611.543 million
2012: $498.931 million

Unit Sales
2013: 3,393
2012: 2,971

Median Price
2013: $148,750
2012: $135,500

Source: MountData.com

Ryan Dagley has returned to Fayetteville-based Signature Bank as a senior vice president and loan manager for the Bentonville bank.

Bank officials also on Monday (July 15) announced promotions of Jake Helton to senior vice president loan manager, Fayetteville; Alex Gladden to senior vice president loan manager, Springdale; Brant Ward to senior vice president funding officer; and Sam Johnson to vice president lending.

Dagley, an 11 year veteran banker, has rejoined Signature Bentonville Bank with responsibility for supervising and providing guidance to the lenders in that market. Dagley earned a bachelor’s degree in political science from the University of Arkansas and a master’s degree in business administration from John Brown University.

Dagley is a graduate of Leadership Benton County; a member of the Bentonville/Bella Vista Chamber’s Government Relations Committee; an Ambassador for the Bentonville/Bella Vista Chamber and; Treasurer/Board Member for NWA Fitness and Health Foundation.

Helton joined Signature Bank in 2006 and has been, most recently, serving as a lender in the Fayetteville Bank. Helton holds degrees in finance and information systems from the University of Arkansas. He is a graduate of Leadership Fayetteville and is serving on the Leadership Link Committee at the Fayetteville Chamber of Commerce.

Gladden joined Signature Bank in 2005 and was recently a private banker/lender in the Springdale Bank. She holds a bachelor’s degree in business finance from the University of Arkansas and is also a graduate of the Arkansas Bankers’ Basic Lending School. Gladden is an original member of Fayetteville Future Fund, a nonprofit organized to bring young people together to give back to their community. She is also an active fund raiser for Big Brothers Big Sister.

As loan managers, Helton and Gladden have the responsibility for supervising and providing guidance to the lenders in their market locations.

Ward joined Signature Bank in 2005 and is responsible for coordinating the bank’s funding position to include tracking and timing of loan funding requirements, monitoring bond portfolio and bank deposits’ maturities and other duties assisting the bank’s CFO. Ward earned a bachelor’s degree in business accounting and business management from Henderson State University, a master’s degree in business finance and entrepreneurship from the University of Arkansas with International studies to include a British Studies Program in London and an Italy Study Program in Asolo, Italy. He is also a graduate of the University of South Carolina’s Graduate School of Bank Investments and Financial Management. Ward is a graduate of Leadership Fayetteville and past board member of Ducks Unlimited, Fayetteville Chapter.

Johnson, an eight-year banker, joined Signature Bank in 2007 and, after leaving for a few years, returned to Signature in 2011 as a mortgage loan officer. Johnson earned a bachelor’s degree in organizational management from John Brown University.
     
Signature Bank operates several banking offices in the area: Signature Plaza in Fayetteville, Har-Ber Meadows in Springdale, Fountain Plaza in Bentonville as well as two locations in Brinkley.  The bank has more than $500 million in assets and has more than 100 employees.

J.B. Hunt Transport Services posted solid financial results for its second quarter ending June 30, though it slightly missed the guidance set by Wall Street Analysts.

The Lowell-based transport company earned $87.69 million, up 6.3% from the same period a year ago. Net income equaled 73 cents per share, up from the 67 cents earned last year.

Wall Street expected J.B.Hunt to post net earnings of 74 cents a share on sales of $1.4 billion. The company also fell short on the revenue mark with $1.382 billion in sales reported in the quarter. The estimate was $1.4 billion.

Investors weren’t concerned with the miss as shares of J.B. Hunt traded higher on Monday (July 15). Shares traded at $76.37, up 64 cents in the afternoon session in heavy volume. The increase also was up against concerns of slowing GDP and disappointing retail sales which were also reported on Monday.

Part of the reason Hunt missed expectations is because the cost of doing business has increased as it continues to ramp up hiring in its Dedicated Contract Services division. The company said it’s preparing to convert two private fleet contracts which resulted in $2.5 million in additional spending. Those expenses are front-end loaded but will be mitigated in the coming quarters.

The firm also took a $2.4 million write-off from technology which it has abandoned as well as a $1.5 million loss relating to two train derailments. Higher driver costs and recruitment wages also rose in the quarter.

Total operating income in the quarter was $147.4 million, up from $137.2 million a year ago.

INTERMODAL
The intermodal – truck via rail – division of J.B. Hunt continues to be the catalyst for strong earnings again this quarter. Hunt’s intermodal segment posted revenue of $854.74 million in the second quarter, up 12% from a year ago. This segment was responsible for 75% of the company's total sales in the quarter.

Operating income totaled $110.67 million, rising 19%, year-over-year. Overall volumes and revenue each increased 12% over the same period in 2012 in an environment of moderating fuel prices and less seasonally volatile freight demand, the company noted.

The firm grew its Eastern network 14% and transcontinental growth was 11% over the second quarter 2012.

Hunt reports steady demand and lower insurance costs which helped to buoy revenue higher.

The period ended with 61,911 units of trailing capacity and 3,952 power units available to the dray fleet, according to Hunt.

DEDICATED CONTRACT SERVICES
Hunt’s DCS division posted $302.62 million in revenue for the quarter, up 13% from a year ago. DSC sales totaled 22% of the company's total revenue in the quarter.

Operating income was $29.7 million, down 11% because of the previously mentioned expansion costs.

The company said new accounts provided a net additional 863 revenue-producing trucks by the end of the quarter compared to prior year. The additional trucks are needed as the firm ramps up for two large private fleet conversions which will be completed by September. The total cost of these conversions is estimated to be in excess of $3.5 million.

INTEGRATED CAPACITY SOLUTIONS
Hunt’s non-asset based brokerage division posted segment revenue of $131.82 million in the quarter, up 20% from a year ago. This segment comprised 10% of the company total revenue in the quarter.

The ICS segment benefited from a 29% increases in load volume, related to a boost in less-than-truckload business. Contractual business was approximately 60% of total load volume in the current period and comparable to second quarter 2012.

Operating income  of $4.16 million increased 113% over the same period 2012 primarily due to increased revenue and improvement in gross profit margin. Gross profit margin increased to 11.8% in the current quarter versus 10.6% last year.

The segment also had added personnel costs with the opening of two new branch locations in the quarter.

ICS’s carrier base increased 10% and the employee count increased 8% over the second quarter 2012.

TRUCK LOSSES
Hunt’s truckload division posted revenue of $101 million in the quarter, down 20% from a year ago as the firm moves more freight to intermodal.

Second quarter operating income tumbled 67% to $2.95 million as the segment reduced its fleet size by 16% also ran 10% shorter routes which also hindered revenue.
Hunt reports rates from consistent shippers decreased 0.6% from a year ago.

At the end of the quarter the segment has 2,018 tractors, down from 2,396 a year ago. The trucking segment revenue was just 7% of the company's total sales in the quarter.

Employees needing to file compensation claims may have a longer commute to do so starting next summer.

According to a letter to Fort Smith Mayor Sandy Sanders, the Arkansas Workers' Compensation Commission is considering closing either its Fort Smith or Springdale offices as a result of a $135 million unfunded liability.

"This decision, unfortunately, was made necessary by the fact that the AWCCs' Death and Permanent Disability Trust Fund is faced with an approximate $135 million unfunded liability," wrote AWCC Chairman Watson Bell. "Although they Governor has kept management and labor apprised of this status for some time now, they have failed to agree on any of the proposed resolutions put forth, leaving no option to address this issue other than these closings."

Watson said the General Assembly's failure to address the $135 million liability contributed to the closings, as well.

"Because the issue of the shortfall was not addressed in the 2013 General Session of the Arkansas Legislature, we have been forced to adopt a strategic financial plan that includes closing one of the offices in Northwest Arkansas as a first step. Additional steps could include a reduction in force."

The Fort Smith office employees six people while the Springdale office employees three, according to AWCC Assistant CEO James Daniel. He said plans to do not call for layoffs at this time.

"We would not lay anyone off. I am not clear on (where they would work should one of the offices close). I would presume they would work out of whichever office is kept open," he said. "I would have to research that."

Daniel said of the 6,672 claims filed with the commission during fiscal year ending June 30, Sebastian County had 322 claims filed versus 419 filed in Washington County.

The determination on which office to close will not only be made based on the number of claims in the offices' respective counties, he said, adding that a lot of filings come in from other counties and the majority of filings are done by mail or computer.

The reason for the shortfall was due to the increase in claims and the amount paid in weekly benefits while the tax percentage on workers' compensation insurance plans has remained at 3% for the last 40 years, Daniel said.

He also pointed to a study he wrote in 2011, titled “The Case for a Premium Tax Increase” that explained how insurance companies have not had their maximum liabilities increased since 1987.

"The maximum weekly benefit had been increased to $154 in 1987, and at that time Act 1015 of 1987 tied the maximum weekly benefit to the state average weekly wage. Subsequently, although the maximum liability of the employer stayed at $75,000, the maximum weekly benefit increased each year as the state eaverage weekly increased each year. By 2007, the maximum weekly benefit had increased to $504. That meant that the employer or carrier, still at the $75,000 maximum liability, would only pay the disabled worker for less than 3 years before the Trust Fund took over."

Daniel said the only funding the commission receives is the 3% from the premium tax.

"We don't get sales tax revenue. Everything we get is when a worker's compensation policy is issued. Three percent of that policy is forwarded by the insurance company to us. We have to make a decision as to how much will go to run agency and how much to the trust fund. There were years where we didn't put any in the trust fund and years in the past when we didn't charge the entire 3% because we didn't need it."

He said now about 1.5% of the tax revenue goes to running the commission, while the rest of the money, 98.5% of the funds taken in, go to the trust fund.

"We've done about all we can do," he said, adding that the commission has reduced its employee number from 140 individuals to 105.

"We did that all by attrition, not laying off. We just didn't re-hire when people quit or retired."

Fort Smith City Administrator Ray Gosack said his office would work with the commission to highlight the city's need a continued presence by the commission.

"Having an office 45 miles away makes it much more difficult for citizens who need service to attend hearings or get service," he said, adding that once the decision is made, it would be final.

"I don't have an idea on when they'll make a decision and to my knowledge there is no appeals process. The commission will make the final decision."

Consumer spending and retail sales ended the second quarter on a soft note, indicating that economic growth and acceleration has weakened, according to the National Retail Federation.

June retail sales, released Monday (July 15)  by the U.S. Department of Commerce and U.S. Census Bureau, showed that total retail and food services sales (which include non-general merchandise categories such as automobiles, gasoline stations and restaurants) increased 0.4% seasonally adjusted month-to-month.

Sale rose 5.7% adjusted year-over-year. June sales fell short of the 0.8% consensus estimate.

“Consumers remain wary,” NRF President and CEO Matthew Shay said.

NRF Chief Economist Jack Kleinhenz said while the economy is improving, growth rates and retail sales remain reserved for the foreseeable future. The June retail sales data were the first disappointment (relative to published expectations) in the last three months, but remained in positive territory, notes Budd Bugatch, analyst with Raymond James & Associates.

Bugatch said the softer sales did not keep retail stocks at bay as they outperformed the broader markets modestly in June. The S&P Retail Index (RLX) was flat for the month, while the S&P 500 Index (SPX) decreased 1%.

Other findings from the year-over-year June unadjusted sales report include:  
•  Building material, garden equipment and supply dealers’ sales rose 6.1%.
•  Clothing and apparel accessories stores' sales increased 3.4%.
•  Electronics and appliance stores’ sales fell 2.3%
•  Furniture and home furnishing stores’ sales increased 1.6%.
•  General merchandise stores’ sales increased 0.7%.
•  Health and personal care stores’ sales increased 0.7%.
•  Online retailers’ sales increased increased 11.5%.
•  Sporting goods, hobby, book and music stores’ sales increased 0.2%.

Getting product into a Sam’s Club is no easy feat for most small volume suppliers, but those who do make a connection say it has launched other successes.

Blake Pointer, CEO of Rogers-based My Brothers Salsa, and Ron Embree, president of Fort Smith-based River Bend Industries, said Sam’s Club connections gave them new possibilities.

A typical Sam’s Club has less than 10,000 stock keeping units or SKUs. This compares to 100,000 or more SKUs inside a big box retailer like Wal-Mart Stores Inc.  

Finding the right product mix is key to the success of club economics as members do pay for the privilege of shopping, according to Salah Khalaf, Sam’s Club senior manager for supplier diversity.

Khalaf conducts numerous workshops around the country each year trying to attract and educate smaller and women-owned businesses into the fold of Sam’s Club. He works with Showcase Events and Shopper Events, third-party service providers who carry out product tastings and other in-club events on behalf of potential suppliers.

Khalaf said this is just one way smaller suppliers can test their product inside a Sam’s Club.

SHOWCASE EVENTS
Using Showcase Events, formerly known as “Road Shows.” was the perfect way Blake Pointer and partner Helen Lampkin got their My Brothers Salsa product into Sam’s Club and later on the shelf at more than 100 Walmart Stores and Neighborhood Markets across Arkansas and Oklahoma.

Pointer said a few years ago Lampkin – also his mother-in-law – was making salsa in her Bentonville kitchen and giving it away to friends and family. In 2003, she launched the company My Brothers Salsa and began distributing the product to small local retailers like Richard’s Meat Market and specialty grocers like Whole Foods in Little Rock and Tulsa.

But three years ago the company ramped up production after it partnered with Shopper Events with taste demos in the Sam’s Clubs in Fayetteville and Bentonville.

“We did very well with the product, conducting about 10 or 12 weekend ‘Road Shows’ that first year,” Pointer said. “It’s important that the demo weekends are done in areas where consumers can buy the product elsewhere after you are gone. For that reason we stuck to areas where we had product for sale in Whole Foods and later Fresh Markets to get the maximum benefit from the Road Show.”

He explained the Shopper Events or Road Show was a partnership done on a consignment basis, where they set up in a Sam’s Club on a Thursday evening and offered the product all weekend and then split the sales.

Pointer said Shopper Events provided their firm with real sales data that caught the eye of a Sam’s Club buyer and led to inline club space for one of their products.

“We worked with our product manufacturers, one in Rogers and one in Alma, to make a larger jar that fit the Sam’s Club packaging criteria,” he said.

SAM’S & MORE
The connections Pointer made doing business with Sam’s Club proved to be invaluable for getting broader distribution.

He said between the sales at Sam’s Club and the Shopper Events’ data he was able to get a meeting with a Wal-Mart buyer and got 84 stores to start, or all the Wal-Mart and Neighborhood Markets in Arkansas.

“It was important for us to start fairly small. We outsource our manufacturing and had them to consider and the one thing we never want to do is compromise the quality of our product. We are true foodies,” Pointer said.

Khalaf said My Brothers Salsa is a good example of a local company that started small, learned their business inside and out and then connected with Sam’s Club through Shopper Events for the added exposure they needed to become a supplier. He said the worse mistake a potential supplier can make is take on too many stores or clubs and then fail to meet the requirements.

Pointer said during their last meeting with Wal-Mart they got all the stores in Missouri and Oklahoma added to their business. He said Wal-Mart saying, “no” is not a cause for worry. It’s when they say “yes” that the worry level rises.

Since My Brothers Salsa has performed well at Sam’s Club and Wal-Mart, Pointer said the firm was recently contacted by Costco for a meeting. They also just signed a deal to expand the product into Fresh Markets on a national scale. He credits much of the company’s emerging success to the partners they made during the early Showcase Events that first year he joined the company.

Khalaf stressed the importance for potential suppliers to do their homework before they ask for a meeting with Sam’s Club or Wal-Mart.

Pointer said his background in marketing at Saatchi and Saatchi X and his work on the Proctor & Gamble account gave him a solid background for his role at My Brothers Salsa.

“We did our homework long before we sought out a meeting with a buyer and it paid off,” he said.

SAM’S TRIAL
River Bend Industries turned to producing a retail product when it became clear that Whirlpool would close its Fort Smith manufacturing operation. River Bend is a plastics molding company.

President Ron Embree learned of a cooler variant from Northwest Arkansas entrepreneurs Tim Mika and Stephen Bowman. It’s a unique and simple design that places a cooler on the top of an adjustable tripod leg configuration that raises the cooler above the floor/ground for more convenient use. The tripod legs fold into the sides of the cooler.

The “Kosmo Cooler” was born, and by 2011 a few pallets of the coolers were being sold at a few Sam’s Club locations.

Embree did not have the usual struggle to get a Sam’s Club buyer to see the product and begin the process to get it in a store. One of the people affiliated with the Kosmo had a connection within Sam’s Club.

“Fortunately, one of the guys working with us on this, he knew someone already selling to Sam’s. ... He knew the people to contact and to go see.  He already had that relationship with them,” Embree said.

It took about six weeks to get the product tested, and about two months before it was sold in a Sam’s Club store. The cooler sold for about a year. Sam’s Club did not renew sales.

“Sam’s is about sales dollars per square foot and I think there were other products that they could sell better per square foot,” Embree explained. “This (Kosmo) unit has to be displayed and set up so people can tell the difference between it and the competition. In six of the 10 stores I went to, it was not set up.”

However, Embree is grateful for the experience with Sam’s. He learned, for example, that the coolers sold best in Sam’s Club stores near the border with Mexico. With that knowledge, he is trying to get the cooler sold in Wal-Mart’s Mexico division.

VALUED BLUEPRINT
Embree said the experience at Sam’s Club gave him a blueprint of how to work with Wal-Mart and other large retailers.

“The first thing you have to have a contact and a way to get in front of the right people. Everybody’s got the next best thing, the next best deal, and so those guys (buyers for retailers) are swamped,” Embree said.

Selling to large retailers also requires a vendor to be flexible and understand the retailer’s process. One of Embree’s initial lessons in working with Sam’s Club is the speed at which retail moves.

“It’s not difficult for someone who comes from the retail world, but for me it was difficult to grasp that (quick turnaround),” Embree said, adding that he missed a deadline on a few early Sam’s Club orders.

And when dealing with Wal-Mart or any of the retailer’s divisions, knowledge of Retail Link is a must, according to Embree. Retail Link is Wal-Mart’s proprietary computer network that connects Wal-Mart suppliers to sales and other data about the product or products they provide to the retailer.

“You have to know the computer system, and their system is Retail Link. You want to take advantage of that. There is a lot of information there, but you have to know how use it,” Embree said.

RIVER BEND PRODUCTS
In early 2011, Embree employed about 120 at his Fort Smith operation when Whirlpool was still a large part of his business. Today, he employs about 85 in Fort Smith. River Bend also has plastics molding plans in Iowa, and the company has about 365 employees.

Embree has developed variants – three-spicket cooler, camo cooler, etc. – of the Kosmo, and is selling them at Sutherland’s, CV’s and Marvin’s IGA. River Bend recently hired a marketing company that specializes in the hunting-shooting-fishing retail segment.

“They are trying to stir up an interest, so that my online sales pick up and the other big box guys will want to sell them,” Embree said.

River Bend is also producing 12-gallon and 18-gallon “survival storage containers.” The containers, which have to be cut open once they are locked down, are included in the 2014 Grainger Supply catalog.

Northwest Heath System announced the appointment of Pamela German Hill as its new market chief financial officer, joining the hospital on July 1.
 
Hill has more than 15 years of leadership experience, most recently serving as vice president and chief financial officer at Vista Health System in Waukegan, Ill., and previously in key leadership financial roles over the last 10 years in Dyersburg, Lexington and Jackson, Tenn.     

Hill has a bachelor’s degree in accounting from Union University in Jackson, Tenn., and a master’s degree in health administration from the University of Memphis.
 
"Pamela has an extensive background in healthcare finance, and we're pleased that she has joined our team," said Dan McKay, CEO of Northwest Health System. “As we expand Northwest's reach throughout Northwest Arkansas, Pamela's range of financial expertise will be helpful in our growth process."
 
Hill points to the fiscal stability of Northwest Health System as a key strength in providing high quality medical care. 

"I am pleased to join a team that values fiscal responsibility," she said.  "Our patients will benefit from the knowledgeable, comprehensive and sound financial decisions that we make."
 

Dr. Carlos F. Rodriquez also recently joined Northwest Health System clinic in Springdale as a family medical physician.

Fluent in English and Spanish, Rodriguez completed his medical degree at Juan N. Corpas School of Medicine in Colombia, South America. He then moved to Fort Smith to complete his residency at the University of Arkansas for Medical Sciences Area Health Education Center West.

Rodriquez said practicing medicine in both Colombia and the U.S. made him better at practicing medicine. 

“I bring not only the experience I got during my three years of residency training in the U.S., but close to five years of experience as physician in Colombia,” he said. “Medicine is my passion, and that makes me a better physician because I love so much what I do.”

According to the 2010 census, approximately 35% of households in Springdale speak Spanish as their first language. Rodriquez’s ability to speak both Spanish and English fluently may help bridge a medical communication gap many Northwest Arkansas’ families face.

CEO of Northwest Health System, Dan McKay, said having another bilingual physician in the community is an asset.

“For people whose first language is Spanish, they often find having a physician that is fluent in both English and Spanish comforting,” he added.
 

You’ve got 60 seconds to pitch your business idea to a few hundred audience members. If they like yours more than others, you’ll get a cash prize. You’ll get a surge of validation that might encourage you to pursue your idea. Most importantly, you might be introduced to people who can help make your dream a reality.

That’s the concept behind “Gone in 60 Seconds,” which is one of numerous entrepreneur-friendly efforts in the state that didn’t exist a few years ago.

Born in August 2011 and held about 10 times across the state so far, “Gone in 60 Seconds” gives 20 participants a chance to pitch their ideas before a voting audience. The winner typically wins up to $1,000. As the event’s creator, Jeff Amerine, describes it as “a mating, if you will, of ‘Shark Tank’ and ‘American Idol.’”

According to David Moody, an entrepreneur who volunteers with the event, the real goal is to get a lot of ideas into the big end of an economic funnel so that startups – new, scalable companies – flow out the other side. “Gone in 60 Seconds” is one of numerous efforts that are part of what he calls an “entrepreneurial ecosystem.”

Other parts of that ecosystem include:
• The Donald W. Reynolds Governor’s Cup, sponsored by Arkansas Capital Corporation, a business plan competition for college and graduate students;

• The Ark Challenge, a business accelerator program for technology startups;

• Startup Arkansas, which connects entrepreneurs with each other and is part of the Startup America Partnership;

• Innovate Arkansas, a joint venture of the Arkansas Economic Development Commission and Winrock International that encourages tech-based jobs in Arkansas.

An entrepreneur himself, Amerine’s job is helping the University of Arkansas commercialize intellectual property created by its research. He says the push for tech-based entrepreneurship really began picking up steam in 2004 with the release of a report by the Milken Institute ranking Arkansas 49th regarding its position in the knowledge-based economy.

In response, business leaders along with the Arkansas Economic Development Commission created Accelerate Arkansas with the goal of helping Arkansas achieve per capita income parity with the national average by 2020. A number of bills were passed in the 2005 and 2007 sessions designed to improve the state’s knowledge-based climate.

Amerine said other economic factors came into play to encourage the growth of entrepreneurship during this time period. A number of the state’s flagship employers reached maturity, so they no longer were adding jobs at a rapid pace. The real estate market boom ended, which meant investors had to look elsewhere to make money. The tougher economy meant good jobs were not always available with established employers.

Amerine said there’s no better place to start certain businesses – in retail and supply chain technology or university spinoffs, for example – than Northwest Arkansas.

“We’ve gone in the last five years from wilderness to civilization in every sense, locally. It’s remarkable the difference. … Five years ago, 10 years ago, there was nothing like that that was even in the realm of possibility,” Amerine said.

Lee Watson, 28, of Conway is a young entrepreneur seeing the power of connection as the key to success. Matthews started Clarovista, a consulting company that helps companies with branding and data analytics.

Watson is working with other entrepreneurs. He’s volunteering with Startup Arkansas, which held its Startup Weekend in April when entrepreneurs met, formed teams and pitched ideas.

“The goal there is to kind of connect the dots in Arkansas. … It’s really a network of entrepreneurs helping other entrepreneurs,” he said.

If the recession encouraged entrepreneurs, what will happen as the economy improves? According to the annual Kauffman Index of Entrepreneurial Activity, the nation’s business creation rate declined in 2012 – from 0.32% of adults to 0.30% – at the same time the unemployment rate dropped. The reason, Kauffman said, was that as more jobs became available, fewer people felt the need to start businesses.

Could better times lead to fewer entrepreneurs in Arkansas? Maybe, but when it comes to startup companies, quality is more important than quantity. At one point, Wal-Mart might loosely have been called a startup. Today, it employs 2.2 million people. True, Sam Walton accomplished that without winning a contest, but could the next great Arkansas company be built with help from an entrepreneurial ecosystem? It can’t hurt.

“Two or three years ago, I only knew of a handful of startups in the state,” Watson said. “I mean, you could count them on your fingers. Now there’s a ton. So it’s exciting to see that happen.”

The Porcine Epidemic Diarrhea Virus, also known as PED, that has infected swine farms in Arkansas and 13 other states is not expected to have a major impact on hog supplies or pork prices in the coming months, according to several swine experts who spoke with The City Wire this week.

Tyson Foods, one the nation’s largest pork processors, purchases hogs from about 2,700 independent suppliers. The Springdale-based meat giant processes roughly 403,000 head of swine each week in its nine pork facilities located throughout the central and Midwest part of the U.S.

“So far, we’ve received very few reports of our hog suppliers’ animals being affected by this disease,” said Gary Mickelson, Tyson spokesman.

Dr. Mike Tokach, extension swine specialist with Kansas State University, said PED was formerly believed to be contained in Europe and China, until the disease was first detected on U.S. soil around April 19. Since early May hundreds of piglets have died across 15 states, but the extent of the spread is difficult to determine because outbreaks are not required to be reported to federal officials.

The American Association of Swine Veterinarians said PED has been found in the following states: Arkansas, Iowa, Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, North Carolina, New York, Ohio, Oklahoma, Pennsylvania and South Dakota.

Tokach said the virus is serious for hog farmers because baby pigs can rarely fend it off as it often wipes out the intestines with a fairly high mortality rate. He said it’s hard to determine just how many piglets have died. Tokach said PED is complicated by the fact it breeds in heat and bright sunlight, unlike other related swine viruses.

“There has been some tracking from the different diagnostic labs. The American Association of Swine has a tracking how many cases ... of the known farms that have experienced the disease. The number is 69 or 70 farms to date, but the number is going up," Tokach said.

Dr. Jeremy Powell, veterinarian with the University of Arkansas Department of Animal Science, doesn’t see any major concerns in the Natural State.

"I don't think we have that many pork producers left in the state. That's something that's been leaving the state for several years now," he said.

Powell and other experts stressed that PED poses no risk to humans who consume pork, or raise swine.

CONSUMER PRICES
Despite some reports of higher pork prices on the horizon, the experts who spoke with The City Wire don’t see much of a threat given the timing of outbreak.

Piglets born in the spring and early summer would be going to market in the late fall to early winter months, which is also typically the weakest cycle for pork prices throughout the year.

Steve Kay, publisher of Cattle Buyers Weekly, said in recent months there have been too many hogs slaughtered relative to demand, which kept packer margins in the red, and pork prices quite low.

“Packer margins for fresh pork did turn back into black in later June, but I suspect packers have been making money most of this year on their valued-added products.” Kay said.

Tokach agreed, saying any supply chain issues probably have not impacted enough pigs to drive up pork prices in the coming months. That said, hog futures have rallied the past week or so on speculation of tighter supplies after reduced slaughter numbers were reported out of Iowa, the nation’s top pork producing state.

Carcass weights also dropped slightly at the same time grocers increased orders in hopes of more summer grilling by consumers.

Wholesale pork cutout prices were $1.03 per pound last week, up 15% from a year ago. Even with that increase, pork is $2 cheaper per pound than the all beef wholesale price of $3.14 as reported by the U.S. Department of Agriculture.

Fidelity National Information Services appears poised to add 150 new jobs and invest $3 million at its campus in west Little Rock.

A resolution on the city of Little Rock board of directors agenda indicates that Jacksonville, Fla.-based Fidelity will seek to utilize the state’s Arkansas Tax Back program for a partial sales tax rebate on new technology equipment, HVAC, office equipment and work stations.

The Tax Back program provides a refund of sales and use taxes for building materials and taxable machinery and equipment associated with an approved project that exceeds $100,000.

“The project will result in 150 new jobs and a total investment of Three Million Dollars ($3,000,000.00),” the resolution says.

Fidelity is a technology company that handles payment processing and banking solutions for a broad array of clients in the financial, mortgage, and automotive industries. A Fortune 500 company, Fidelity bought the former Alltel Information Services (Systematics) in 2003 and at one time employed several hundred white-collar workers in Little Rock.

Little Rock Mayor Mark Stodola confirmed the Fidelity expansion and added that it could be closer to 200 new job hires for the company’s call center operations. He said that an effort is being made to possibly hire recently laid-off Hewlett Packard workers for the new jobs.

HP announced last week that it would lay off 500 workers at its Conway facility.

“Fidelity is doing a joint job fair with HP to try to hire as many of those people as they can,” Stodola said.