Michael Tilley of Talk Business & Politics discusses the gains in river tonnage, another flooding of the Peak Center with no response from the Fort Smith school administration and what he knows about the unknown "Project X" project in Fort Smith.
Kyle Kellams: We're going to start this Friday edition off as we often do with Michael Tilley from Talk Business and Politics. Michael, how are you this Friday?
Michael Tilley: Doing well, we have to hurry up. I've got some eggs cooking out on the sidewalk so…
KK: Well they're probably already fried in just the brief amount of time we've been talking. Let's start with the Arkansas River. We keep track of the tonnage that comes up the river—or I suppose goes down the river— as kind of an indicator of some economic activity. What do these indicators tell us with the latest report?
MT: Well, it tells us that the economy is doing well. And you're right, I see this—and I think a lot of economists see it—as kind of a fundamental layer of the economy. They also give you—and they can give you—an idea of where the economy is going. In the first six months of this year, the US Corps of Engineer reports just a little under 6.3 million tons were shipped along the river. That's up 19%. That's pretty healthy. Some other good numbers are the inbound traffic, which is product coming into the river, it was up 38%. Outbound shipments—this is all for the first six months—were up 11%. And internal shipments from port to port on the river were up 8%. That's pretty broad gains, pretty healthy gains. That six month period wrapped up with June being up 7.8% so it's pretty good.
I was able to talk to Marty Shell—he's president of the Van Buren-based Five Rivers, he runs the port there in Van Buren and also port of Fort Smith—he said they had a great second quarter and said third quarter’s looking good as well. They expect a lot of grain movements will start and they'll start seeing a lot of fertilizer and feed coming in, and he's kind of looking at a 7 - 12% growth for his operations for the year.
I also got a statement from Jodi Pryor—general manager of Logistic Services at the port of Little Rock—they've talked about also having a pretty healthy year. They think there'll be a little bit of slowdown, there's some development work on the Illinois River which will slow a little bit of traffic down, and they're seeing a lot of the basic commodities. For example, building and manufacturing: aluminum coils, bauxite, that kind of thing. So, it's a good healthy indicator for where the economy is.
Some of that talk of recession seems like it keeps being pushed forward, 'well it'll be next year, it’ll be be next year...' so if you're asking me to say there's going to be a recession I couldn't do it looking at these numbers.
KK: Speaking of water, there was unfortunately more than desired amount of water in the Fort Smith Peak center once again. What do we know about this latest episode of flooding?
MT: Well, we don't know a lot, unfortunately. We know that it flooded again and about the only reason we know is that someone sent us pictures of the flooding. This was on last Friday, July 14, so the rain a lot of the rain had come through and it flooded again. This was at least the 4th time—that we know of—that it's flooded. We asked the school administration for comment, which they provided us in the past, and they said, “Yes, it's flooded, here's the extent, here's what we're doing to fix it.”
Well, this time, we got nothing for three days, they ignored us. They didn't even say, “No comment,” or “We're working on it.” They just ignored our request for information. We went ahead and sent a (Freedom of Information Act request), because we had some people send us some pictures and we had confirmation. I guess the school district thought if they didn't talk to us, we wouldn't run a story, and then we got a message from the school district a few days later saying that they will only answer Freedom of Information Act requests, they won't answer any other questions. Tina Dale, who's a reporter with us here and covers a lot of Fort Smith school system—(she and I have) been in this business for decades now when you combine our experience—and we've never encountered a public organization, a public body, that is so anti-transparency, I guess is the way to say it.
I used to think the city of Fort Smith was the king of anti-transparency, but the school district makes Fort Smith look like an open book. It's unfortunate, it's a great facility, the Peak facility’s a great facility, and it's a public facility. It was built with taxpayer dollars. It's just too bad the Fort Smith public school system doesn't think it's any of the public's business.
KK: So FOI requests filed?
MT: Well, not yet. I'm trying to find the diplomatic, graceful way to encourage them to not be so difficult about it, but they're going to be difficult about it, alright, well we can work around it. It's just a very just a very poor image for the school district.
KK: Finally, I love talking about something with a cool name, and this isn't the official name of course, but it's the name as of now: “Project X” in Fort Smith. Everyone's kind of got an idea of what it is, why don't you tell us what we do know?
MT: First of all, I should say, it is property owned right off I-540, and you can see it's the old Best Buy building that was on 540 near the Rogers Avenue interchange. Bennie Westphal owns that—and he's also a co-owner of Talk Business & Politics, so I want to get that right out there. The “Project X,” it's going to be kind of a large retail by 60,000 square feet of retail and warehouse space. There's been there's all kinds of rumors as to what it is; some think it's going to be kind of like a form of a Bass Pro Shop—Bass Pro Shops are much larger than 2,000 square feet. Some think like a Trader Joe's or a Costco, I don't know. But according to what the “Project X” company has provided, they estimate annual sales for business around $28 million, hire just under 100 folks with an average salary of $53,000 a year, those are pretty good numbers. Arkansas’ constitution makes it difficult to provide incentives for service-sector type jobs that bring in good dollars and bring in good jobs. But what it does allow is that the city can spend money on infrastructure, job training, warehouse, there are certain things that they can provide.
So, the city is going to provide up to $400,000 a year for 12 years that can be used for the project, and any money that's not used in the year can be rolled over. But, you know, let's just take the $28 million. If that is true—let's say that's too high, it's just $20 million. That's still $350,000 - $450,000 in sales tax a year that the city would generate. But if it is $28 million, that's closer to $600,000. So, I don't know, it seems like a good investment.
What I would say is Arkansas’ economic development policy overall was created in the 1950s and 60s when we were trying to recruit industry. So, it's easier in Arkansas to provide incentives for a company—poultry processing or whatever—that's going to bring in low wages, probably have a negative impact on the economy. We will provide incentives for that. But we won't provide incentives for tourism or specialty retail type jobs that are clean people drop their clean dollars, there are jobs connected to it. This is kind of created some bigger conversations in Fort Smith about where maybe Arkansas’ economic development policy, where it needs to go, or the kind of the reality it should try to respond to.
KK: Is there any sort of timeline if this continues to move forward and this “Project X” comes here that we would find out what it's going to be?
MT: Oh yeah, the city’s not just going to write a check to “Project X.” It's going to have to go through planning, it's going to have to go through all the usual steps that are required to get a facility like this open, so we'll know. I'll be surprised if we don't know here in the next month or so who it is.
KK: While we're talking about this, get me up to date on this possible thing with the Acme Brick Company, the Brickyard… what could happen there?
MT: There's a lot of “what if’s” but, the old Acme Brick facility, it's been closed, but there's a lot of interesting property. I don't know how clean it is or what kind of remediation it would require, but there are folks talking about making it a park, a bike trail, a multi-purpose trail park. It's near other parks and ballfields and it's kind of right in the middle of the city. This would be a hell of a nice park, a great facility. The way the geography is, Kyle, it’s kind of hard to explain, but it's kind of tucked right in the middle of the city you almost wouldn't see it. The city is moved to kind of set this up so they could receive a donation, maybe pull it into the park system, I don't know where they’d get the money to develop it. There’s been talk about private donations stepping up. This has potential—and we’re obviously going to keep following it—to be a very cool amenity for the city of Fort Smith.
KK: You can follow that and everything else we've talked about and more at talkbusiness.net. Michael Tilley, as always thank you for your time we'll talk again next week.
MT: You're welcome, sir.
This transcript has been edited and condensed for clarity’s sake.
