< Previous38 A R K A N S A S : T H E S T A T E T H A T R U N S L I K E A B U S I N E S SRE G I O N P R O F I L E S : SO U T H A RK A N S ASTexarkanaEl DoradoPine BluffArkadelphiaTimber South ArkansasGood for Growthby S AVA N N A H K I N GSBoom Town sculpture, El Dorado, ArkansasPhoto courtesy Arkansas Department of Parks and Tourismouthern Arkansas is continually growing. Literally. e region’s tremendous timber assets make it a prime location for paper and timber producers. Arkansas is the second leading lumber producing state in the South and the fourth in the country with million acres of timberland—nearly half the state. e forestry industry is a major driver of the state’s economy and directly employs nearly , people, which is higher than the national average. Several companies have chosen to locate in the southern part of the state to take advantage of the Natural State’s assets. Conifex Timber Inc. announced in February , that it would modernize a shuttered sawmill complex in El Dorado. e forestry and sawmilling company will invest approximately $ million into the state-of-the-art facility where it will create new jobs. In Pine Bluff , Highland Pellets LLC opened its new wood pellet facility in . e $-million plant produces more than , tons of pellets each year for the European market, where industrial utilities use the pellets to lower their carbon footprint and provide a sustainable base load power. Union Pacifi c transports the pellets to Louisiana for export. China-based pulp and paper producer, Sun Paper, chose to locate its fi rst North American facility in the heart of Arkansas’ timber country when it settled on Arkadelphia for its $. billion bio-refi nery.“ e fact that Sun Paper is investing more than $ billion in south Arkansas speaks volumes of their confi dence in our workforce and pro-business environment,” said Gov. Asa Hutchinson. “ is is among the largest private investments in the state’s history, and the impact will be felt for generations. anks to Sun Paper for choosing Arkansas as the location for its fi rst North American facility.” A R K A N S A S : T H E S T A T E T H A T R U N S L I K E A B U S I N E S S 39Arkansas is blessed with stunning natural scenery, a rich heritage and historical locations around the state.According to the Arkansas Historic Preservation Program, historic preservation adds $ million and , jobs to the state’s economy each year. roughout the state, local communities are making strides to improve the quality of life and economic health of their areas through various developments. Little Rock’s RiseOver the last two decades, the Downtown Little Rock Partnership (DLRP) has made several improvements to the state’s capital city. Since , some $ billion in investments have been made in the downtown area’s revitalization eff orts. e River Market district is the heart of the city’s downtown and is located on the south shore of the Arkansas River. Prior to its $-million development in the early s, the district was a desolate stretch of buildings in disrepair. Today, the -block district is a lively community that attracts tourists and residents to its many restaurants, shops and cultural destinations. Some of the area’s most popular attractions include the ,-square-foot Ottenheimer Market Hall, which is full of a diverse array of eateries and food vendors; the Arkansas Studies Institute; the Ron Robinson eatre; the Witt Stephens Jr. Central Arkansas Nature Center; and the nearby Clinton Presidential Library. Just outside of Little Rock, the city of Conway has made several investments in its historic downtown revitalization by improving connectivity and through various new developments. Several of the by SAVANNAH KINGSO U T H ER ND O W NT O W N R E V IT ALI Z A TI O NAbove: Downtown LIttle RockImage: Getty ImagesArkansas communities are revitalizing their downtowns,preserving history and fueling future growth.42 AR K AN S AS : TH E S T A TE TH A T R U N S LI K E A B U S I N E S Scity’s historic buildings were redeveloped through state and federal historic tax credits. More than $5 million in infrastructure improvements have been made since the Conway Downtown Partnership began spearheading revitalization in 2001. Built by GiantsNorthwest Arkansas has a reputation for building businesses. After all, it is where corporate giants Walmart, Sam’s Club, Tyson Foods, Simmons Foods and J.B. Hunt got their starts. The area’s cultural amenities are also fueled by the presence of these titans of industry. One of the area’s biggest attractions, the Crystal Bridges Museum of American Art located in Bentonville, was founded by the Walton Family Foundation in 2005 and opened in 2011. Walmart sponsors general admission to the museum, so the public can enjoy the art for free. The museum gets its name from a nearby spring and the building’s architectural design. Since opening, more than 3 million people have visited the museum, which boasts renowned artworks including Norman Rockwell’s Rosie the Riveter, Andy Warhol’s Coca-Cola and Asher B. Durand’s Kindred Spirits. Nearby Downtown Bentonville is a hub for retail, restaurants and recreation.Another lively destination in Northwest Arkansas is Fayetteville, home to the University of Arkansas. The city is nestled in the Ozark mountains and is loved for its scenery, hiking and biking trails and more than 50 public parks and natural areas. Craft beer lovers flock to this city to hit the craft breweries and pubs on the Fayetteville Ale Trail. Blues, Bikes and BBQLocated about two miles from Arkansas State University, Downtown Jonesboro is a vibrant historic district with 13 restaurants, more than 20 shops and 12 cultural arts organizations. In 2017, the city received a grant that allowed for the construction of a pedestrian and bicycle path that connects downtown and the university. Many historic buildings in the city have been redeveloped, several of which have been turned into mixed residential and retail space. West Memphis is a music and barbecue lover’s dream come true. In fact, blues legend B.B. King got his start at a local radio station. The area has made significant changes to the 15-block downtown district over the last 20 years through landscaping, historic preservation, public art and public events. The New BoomtownEl Dorado, once an oil boomtown, is now a thriving arts and cultural center in South Arkansas. The Murphy Arts District, opened in 2017, features six venues spread over three city blocks downtown including: a two-acre children’s Playscape, an outdoor amphitheater that seats 7,500, a 1930s-era gas station turned 250-person cabaret and farm-to-table restaurant, a farmer’s market, an 8,000-square-foot art gallery, and a 1920s-era renovated theater. The arts district will soon begin the second phase of its plan with the renovation of the historic Rialto Theater. El Dorado’s unique renaissance is just getting started, and more developments are expected to continue to improve the city’s historic downtown and cultural attractions for years to come. Couple at the Empress Building (below) in LIttle Rock.Photo Courtesy Arkansas Department of Parks and TourismLevelingLevelingLevelingLevelingLevelingLevelingLevelingLevelingLevelingLevelingLevelingTHEA R K A N S A S : T H E S T A T E T H A T R U N S L I K E A B U S I N E S S 43When Arkansas awards incentives to a qualifying company, it does so with an eye on improving the long-term growth prospects of that employer.If the recipient fi rm is incentivized to create gainful employment and invest substantial sums of capital in Arkansas, then the state considers that a win for all.“We like to look at our incentives as something that puts us over the edge in competition with other states,” says Bentley Story, director of business development at the Arkansas Economic Development Commission. How Arkansas uses incentive programs to help firms gain a competitive advantage.by RON STARNERI N C E N T IVE SImage: Getty Images44 AR K AN S AS : TH E S T A TE TH A T R U N S LI K E A B U S I N E S S“Our pro-business climate makes us competitive for business locations and expansions; our incentives tip the favor in Arkansas’ direction.”Case in point: the ArkPlus program enabled the Bank of the Ozarks to pursue a corporate headquarters expansion in e Ranch in West Little Rock. ArkPlus is a discretionary incentive that provides state income tax credits of percent of the total investment in a new location or expansion project. e income tax credits may be used to off set percent of the Arkansas income tax liability in the tax year the credit is earned. Any unused credits may be carried forward for nine years beyond the tax year in which the credit was fi rst earned.“ is win was signifi cant because the majority of the bank’s offi ces are not in Arkansas, so they could have located anywhere,” says Story. “ ey chose Arkansas because of our pro-business climate, workforce, and the ArkPlus program and the Create Rebate program.”Create Rebate incentives are negotiated and off ered at the discretion of the Executive Director of the Arkansas Economic Development Commission. Create Rebate provides annual cash payments based on a company’s annual payroll for new, full-time, permanent employees. To qualify, the company must create a minimum of $ million annually in new payroll. e minimum payroll must be met within months of the eff ective date of the fi nancial incentive agreement.Bank of the Ozarks is building a new facility of , sq. ft. and will hire about new workers as part of the deal, Story notes. “ ey will have around employees in our state capital area largely because of our aggressive incentives.”And that’s not all, he adds. “We’ve seen a lot of steel production move here, and our incentives have played a big role in securing these investments.”Nucor Steel announced $ million in capital expenditures and the creation of new jobs in Mississippi County, says Story, adding that Silgan Holdings selected Fort Smith for their new plant of , sq. ft. and new workers.“We worked with site consultants on that project and ensured they located here instead of a competing state just north of us,” Story says. “Simmons Foods announced they’re locating a poultry plant creating , new jobs in a new $-million facility in Benton County. None of these deals would have happened without our creative incentives.”It’s not all big business in Arkansas, however. Targeted Business Incentives work to give early stage companies a competitive edge, Story notes. “ ese are for early stage fi rms that have between $, and $ million in payroll. It includes R&D and technology and pharmaceutical fi rms that create higher-wage jobs. ey all must pay a minimum of percent of the state average wage to qualify to receive this incentive.” e Equity Investment Tax Credit program targets small fi rms too. “It “Over the past several years we have made signifi cant changes to our tax structure such as phasing out sales taxes on repair and replacement parts.”— Bentley Story, Director of Business Development, AEDCtargets early stage companies that are looking to raise capital in the form of equity,” says Story. “It encourages investment of any kind of equity capital into early stage companies. It provides investors with an income tax credit that can be monetized. It’s designed for higher-wage companies.” e Digital Production/Film incentive program pays dividends too. “It authorizes a rebate on qualifi ed expenditures for motion pictures or any fi lm shot in Arkansas,” Story says. “ e third installment of the HBO series True Detective is being shot in Northwest Arkansas; we would not have secured the series without our incentives.”Arkansas is not done fi ne-tuning its tax structure either, Story adds. “We’re phasing out our sales and use tax on equipment purchased for repair or replacement parts,” he says. “It does away with it completely over fi ve years. is was enacted in .”Moreover, “the governor has made a substantial income tax cut, and he’s looking to do another,” Story adds.Meanwhile, the Advantage Arkansas Income Tax Credit remains the gold standard. It off ers a state income tax credit for job creation based on the payroll of new, full-time, permanent employees hired because of the project. To qualify, fi rms must pay a wage equal to or greater than the lowest county average hourly wage. e Advantage Arkansas Income Tax Credit is earned each tax year for a period of fi ve years. e income tax credit cannot off set more than percent of a business’ income tax liability in any one year and may be carried forward for nine years beyond the tax year in which the credit was fi rst earned.For more information on incentive programs, contact the Arkansas Economic Development Commission at --ARKANSAS. 46 A R K A N S A S : T H E S T A T E T H A T R U N S L I K E A B U S I N E S SF O R E I G N DIR E C T IN V E S T ME N Tby M A R K A R E N DArkansas to the World:‘Make Yourself at Home’assault-Falcon Jet Corp. (business jets), Safran (aerospace and defense components), bioMérieux (diagnostics for health sciences) and L’Oréal (cosmetics) have two things in common. They are headquartered in France, and they have operations in Arkansas. Other French companies have facilities in the state, too, which combined have created 3,306 jobs. That’s just France. Arkansas is home to nearly 470 global employers that support more than 34,104 jobs including: Unilever and Tate & Lyle (United Kingdom); Hino Manufacturing USA, Kagome USA and Nidec (Japan); Infosys Technologies Ltd. (India); Syngenta (China); and ABB and Nestlé (Switzerland). But it’s not just European companies and Japanese car makers and electronics giants. Wipro and Tata Group, based in India, have Arkansas operations. (See the map on page 47 for nations with companies in the state as of 2017.)“The greatest advantage Arkansas has for attracting international companies is its customer service,” said Mark Hamer, International Business Development Director at the Arkansas Economic Development Commission (AEDC). “We have had success with companies from Europe and Asia due to our responsiveness to the needs of companies.” Among other things, that means uncomplicated access to state and other officials for project discussions.“European companies, in particular, require lots of details (about taxes, incentives, labor shed, wages and so forth) in order to assess a location as a potential site for a manufacturing facility and to feel comfortable making an informed decision,” Hamer added. “Asian companies tend to feel comfortable making an investment decision when they have built a strong relationship with people they can trust to be there to help them long term.”Recent FDI from Sweden, ChinaStockholm, Sweden-based Gränges is a global leader in aluminum engineering, manufacturing and innovation. In May 2018, it announced plans to restart production at its Newport, Arkansas, facility, which produces light-gauge aluminum foil for various consumer applications. The investment amounts to $26 million. “This is a good opportunity for us to upgrade and use the assets we already own and address an attractive market niche which has been mainly served through imports,” said CEO Johan Menckel. The facility produced aluminum foil for consumer applications until 2015 and has subsequently been idle. The facility was part of Noranda’s rolled aluminum business, which Gränges acquired in 2016.Hefei Risever Machinery Co. Ltd., based in China, is building a new manufacturing plant in Jonesboro, in the Craighead Technology Park. It is Risever’s first to be built in the United States. Risever makes machine parts for DA R K A N S A S : T H E S T A T E T H A T R U N S L I K E A B U S I N E S S 47heavy equipment for manufacturers like Caterpillar, Volvo and Komatsu. The company spent more than a year investigating possible sites, beginning with 70 cities in five states before choosing Jonesboro. In the next five years, Risever plans to invest $20 million to create 130 new jobs in Jonesboro. The facility will target an annual production capacity of 18,000 tons of steel.In May 2017, Shandong Ruyi Technology Group (Ruyi) announced a $410-million investment in the former Sanyo manufacturing facility in Forrest City. Ruyi, headquartered in Shandong Province, China, will create up to 800 new jobs at the facility, where Arkansas cotton will be spun into yarn for textile use. This is Ruyi’s first facility to locate in North America.“Ruyi Group, as the largest textile manufacturer in China, has been expanding globally,” said Chairman Yafu Qiu. “Our manufacturing facility in Arkansas will become the first milestone of Ruyi’s steps into the United States. We are dedicated to provide the product with cutting edge technology and superior quality.”Ruyi’s renovations on the former Sanyo building began in late 2017. The Sanyo facility had been vacant since late 2007 when the company shut down production in Forrest City. Ruyi plans on processing more than 200,000 tons of Arkansas cotton annually at the Forrest City facility. Arkansas is the fifth largest cotton producer among all states, producing more than 1.1 million bales in 2017. “When looking to expand into North America, world-class international companies continue to choose Arkansas,” said AEDC Executive Director Mike Preston. “The hundreds of jobs to be created by Ruyi will have an economic impact beyond eastern Arkansas into the entire state. Their commitment is further proof of Arkansas’ international momentum.” AustraliaAustriaBelgiumBrazilCanadaChileChinaColombiaCuraçaoDenmarkFinlandFranceGermanyHong KongIndiaIrelandItalyLuxembourgJapanMexicoNetherlandsNew ZealandNorwayRussiaSingaporeSouth KoreaSpainSwedenSwitzerlandTaiwanTurkeyUnited KingdomVietnamEach unique flag in a county represents one or more companies from the same parent country according to 2017 data.Foreign Investments in ArkansasNext >