Kyle Kellams: Let's get on the line with Michael Tilley from Talk Business & Politics. Happy May Day, Michael.
Michael Tilley: Thank you, sir. I could have used that airbag when I was a kid. Saved a few busted faces.
Kellams: Let's start with a story that's kind of been on our radar for the past few weeks. Baptist Health. It was a couple of weeks ago they announced one closure. This week, more bad news.
Tilley: Yeah, and let's hope this is it. But we knew more was going to come. It was a couple of months ago when we first got wind — when a Baptist Health exec spoke to a civic club in Fort Smith and had some pretty troubling things to say, which still surprises me that they think they can talk to a civic club and not get out. But that's when we first learned that there could be some significant closures. Baptist Health denied it but wouldn't say what was going on. But here we are. Like you said, a couple of weeks ago they announced they were going to close their labor and delivery services. Then on Wednesday of this week, we got more bad news. They're going to close several more services and cut around 150 jobs. That includes 10 doctors.
Baptist said it's lost $127 million at the Fort Smith operation since they acquired it in 2018. That's a stiff number. So it explains what they're cutting.
First of all, they say they're going to retain their emergency department, the operating room, their medical surgical nursing, what they call low-acuity intensive care unit, geriatric service, geriatric psychiatry services and radiology services. What they're cutting are a lot of inpatient services such as infectious diseases, nephrology, oncology — oncology was a big surprise — pulmonary. Their cardiology, pediatric neurology clinics are closing along with renal.
If there's any good news in there, they said they're not going to have any changes planned for their Van Buren hospital. They also manage that. They stressed again that the hospitals are not fully closed and that they plan to spend $20 million there over the next few years. They won't say what that $20 million is for. So we'll see.
We've got to hope this is all that they cut. But it's a lot. Mercy Fort Smith, the other hospital in town, has said it's trying to fill that void. But there will be disruption. There will be loss of services either in the interim or longer, no matter how much Mercy can do. It's just a big blow. And if you have doctors or you're used to seeing a certain system or you're in a system, it's very disruptive. As you get older, you try to change doctors, find a new facility, and you may even have to go to Tulsa or Northwest Arkansas or Little Rock now to find those services. So it's not only tough on those folks losing their jobs — and again, this is 60 days, they're going to start closing these in the next 60 days — it's really going to be a hit on those patients in the area.
Kellams: Fort Smith is a metropolitan area that probably needs more than one full hospital.
Tilley: Well, that's true. That's what I'm hearing a lot. It's been a two-hospital town for a long time. And now it's not that it's not going to be a two-hospital town, but it's more like a one-and-a-half-hospital town, I guess. I've heard some people, and you see some on social media, criticize the city of Fort Smith, criticize the Baptist leadership. I think the issue is that we've gone decades now, both at the state and federal level, not fully supporting the health care sector, either through Medicaid or Medicare reimbursements. And we've been warned that rural hospital services and some smaller urban hospitals will start to struggle. Baptist has been pretty mum about what their struggle is in Fort Smith. But you're starting to see these headlines around the country of hospitals and clinics cutting services. I think it's a bigger picture than just Fort Smith.
Kellams: You mentioned Mercy and their efforts to try to pick up some of the slack. Also this week, an announcement that they are doing well with the fundraising for their Fort Smith Cancer Center.
Tilley: Yes. They announced also on Wednesday — I can't imagine they planned it, but they announced that they've met their fundraising goal for their $41 million expansion of their cancer center. They announced this last summer. One of the things that helped put them over the top, they said, was a $2 million challenge grant from the Mayo Foundation. But last year, when they first announced this, they said part of their money came from federal ARPA funds, that American Rescue Plan Act that followed the COVID pandemic. There was $12 million that came from that. The St. Louis-based Mercy system matched that with $12 million. The Cherokee Nation gave them $8 million. That was announced in early 2025. They've been able to pull together that money in a pretty impressive time.
What they're working on is a 50,000-square-foot expansion that they hope to have complete by next summer, July 2027. When they first announced it, they talked about having four oncologists moving from four to eight, boosting their number of advanced practice registered nurse oncologists from eight to 12. But they're adding even more than that. They're going to add four more medical oncologists and another radiation oncologist and two surgical oncologists. So it's going to be a very robust cancer center, if they can get all those folks hired.
On a personal note, being a cancer survivor, Mercy Fort Smith's clinic there was where I received my services. I can tell you they are in dire need of this expansion because it's there — they're on top of each other, the waiting rooms are small. So this will be very welcome for those folks who have to depend on those services.
Kellams: Some welcome news for city and county officials this week in the River Valley. Fort Smith sales tax — a pretty good start in 2026.
Tilley: Yes. This is welcome news because we've had a couple of years where the tax numbers — it's not that they were down, it's just that they were beginning to kind of moderate. Of course, they were up against some pretty robust sales tax numbers coming out of the pandemic. But what we're seeing so far in the first quarter of 2026, the city's share of the Sebastian County 1% tax was up 5.3% in March. The revenue from the city's 1% tax was up 6.3%. Those are good numbers. It's up over the budget estimate through the first quarter. The city last year went through some pretty significant budget cuts. So this is going to help. And that 1% sales tax is on track possibly to break through the $30 million annual mark. The city's share of the 1% countywide tax — and this is a little bit of a stretch — could break above the $25 million mark. So both of those are welcome. Not only is it good for the city budget, but it reflects a good economy for consumers. We've got higher fuel costs, inflation is kind of poking its head back up again. We'll see if consumers retrench any in the rest of the year. But so far it's off to a good start.
Kellams: Finally, if you ask most people in Northwest Arkansas about the Port of Fort Smith, I think you'd get a "what?" The Port of Fort Smith is a pretty cool place. It's at the confluence of the Arkansas and the Poteau River, I believe.
Tilley: Yes, and it's a 28-acre facility there on the west side of Fort Smith. Marty Shell — he is the president of Five Rivers, it's Van Buren-based Five Rivers Distribution. He manages the Port of Fort Smith and a pretty significant port operation in Van Buren on the Van Buren side of the river. I'm starting to think Marty has some incriminating evidence on state and federal folks who make decisions about grant funding. This surprised me when I added up the total. He works with several agencies, but they've collected more than $30 million in grant funding since 2020 for work at the ports. And that's not including the matching portion.
Now, a lot of that — if you remember, the floods of 2019 just destroyed the Port of Fort Smith, so they had to build that back up. But the latest grant they received is $8.1 million, a federal grant to help them build a rail transload yard there. They've acquired 6.5 acres that they're going to build this on. They'll first have to build it up above the flood plain, but it'll increase their capacity by 40%, according to Marty and their grant application.
The other thing you mentioned — it still surprises me — a lot of the material that comes into the ports in Fort Smith and Van Buren then goes out to customers in 17 different states. A lot of that is agriculture, bulk feed, bulk fertilizer. You bring that bulk in on a barge and then you can load it onto trains, you can load it onto trucks. So that's what this yard is going to help them do more of, and get that shipped out quicker and more efficiently.
In addition to that $8.1 million, just a little reminder — they received over $15 million for the Slackwater Harbor. That's now a go. It's been greenlit. It's going to be built in Van Buren in 2025. They received $2 million from the Arkansas Waterways Commission to build a new warehouse there at the port. And before that, in 2024, they received around $6.5 million, both from the Waterways Commission and from FEMA money and insurance proceeds. So it has been a quiet — you never see Marty tooting his horn. They just do it quietly. But that has been a great rebuild story and a great new investment story, even at the Port of Van Buren, in the past five or six years.
Kellams: You can read more about that and everything we've talked about and so much more from around the state at talkbusiness.net. Michael, thank you so much. We'll continue this next week.
Tilley: Hey, I appreciate it. Appreciate the time.
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