Finance & Banking Magazine March/April 2015 Tourism

City Spotlight: Little Rock

March/April 2015 Issue

Arkansas’ capitol city has seen reinvestment and job
creation growing in its once-forsaken downtown core.

Photography by Sara Edwards Neal

The Center Will Hold

Jerry Jones remembers downtown Little Rock, Ark., as a desolate, abandoned wasteland less than a decade ago. City streets emptied after 5 p.m., when workers left for the suburbs. Few restaurants stayed open at night. Businesses didn’t even consider locating in Little Rock’s urban center and, certainly, few people wanted to live downtown.

That’s all changed.

“It’s a great time in business in downtown Little Rock,” said Jones, the chief legal and ethics officer for Acxiom. “There are new restaurants, new hotels, things going on at the Clinton Presidential Center, and The Rep is doing great. Things are coming together. Frankly, it’s good for our business, and our associates like working in downtown Little Rock.”

This kind of growth juggernauts into an ideal climate for all businesses. The Entergy and Dassault Falcon Jet expansions, the Tech Park’s move into the Block 2 Lofts building, and an influx of innovators and small businesses are contributing to an economic boom in Little Rock. This surge, too, is in no small part thanks to the Clinton Presidential Center serving as an anchor since 1997, when former President Bill Clinton selected acreage by the river as the spot for his library.

“We are seeing renewed activity in the marketplace with companies looking to make investments both from the perspective of new markets as well as reshoring for what I call pent-up demand for investment that has simply been put off, primarily because of the economy,” said Jay Chesshir, president and CEO of the Little Rock Regional Chamber of Commerce. “We are seeing a lot of activity and that includes the entire metro region.”

Little Rock and its environs are already home to major manufacturers, such as L’Oreal USA, LM Wind Power, Caterpillar, and Southwest Power Pool Electric Energy Network, among others. Over the last year, additional companies have broken ground throughout the city. FedEx is building a $50 million distribution center in southwest Little Rock, and it’s expected to employ more than 200 people.

In November, Entergy officials broke ground on a $23 million transmission operations center. In turn, regional transmission organization Midcontinent Independent System Operator, or MISO, decided to build an operations center, costing $5 million to $8 million. It will be staffed by 35 to 50 employees with an average salary of $85,000.

Chesshir said the Little Rock economy in 2015 is a “patchwork quilt of small businesses which support far fewer larger businesses.” He cited Dassault Falcon Jet as a prime example of how a strong economy spreads.

Last year, Dassault broke ground on a $60 million expansion facility dedicated to two new models, the Falcon 5X large-body twinjet and the ultra-long range Falcon 8X trijet. The project will add 250,000 square feet of new production and completion space, bringing the total facility footprint to 1.25 million square feet. The cabinet, upholstery, and headliner shops are undergoing renovations, and older hangars are receiving upgrades.

“This undertaking demonstrates a commitment to continue our investment in Little Rock and to ensure the facility will remain at the forefront of completion technology,” said Eric Trappier, Dassault’s chief operating officer, at the groundbreaking last fall. “Little Rock is not only the company’s largest industrial plant, it is also an industry leader in digital completion techniques, which Dassault pioneered.”

In turn, Beaudet Aviation, a subsidiary of JCB Aero of Toulouse, France, decided to open a $2.5 million facility in Little Rock to serve as a key supplier to Dassault. That investment created an additional 75 jobs on a new payroll. This then drove the need for more small businesses, Chesshir said.

While major corporations contribute to the overall central Arkansas economy, tourism is also fueling businesses both large and small. According to the Little Rock Convention and Visitor’s Bureau, hotel stays and restaurant receipts were up 3.3 percent from 2013. In the 10 years since the Clinton Presidential Library opened, stays and receipts have increased 56 percent.

“The Clinton Library clearly spearheaded the revitalization and growth not just in downtown Little Rock but all of central Arkansas with new shopping, new museums and attractions, new restaurants,” said Gretchen Hall, president and CEO of the Little Rock Convention and Visitors Bureau. “It has made a huge impact.”

Tourism and hospitality appear on track to create the largest job growth in the city this year. More restaurants are opening, offering Little Rock a chance to become a food mecca, Chesshir said.

Three new hotel properties are also under construction. Another three opened in 2013, one will open this year, and two more will debut in 2016. All of this adds to more rooms for tourism and convention business, Hall said. Robinson Auditorium will reopen in 2016 after renovations, and, as a result, the adjacent Doubletree Hotel is undergoing $5 million worth of renovations.

Hotels, restaurants, and retail stores aren’t alone in enjoying the boost. Jones said all of this combines to entice new talent to companies like Acxiom.

“One of the things we have found is once we get them to step on a plane to Little Rock and get here, they fall in love with it and all of central Arkansas,” Jones said.

Jerry Jones, chief legal and ethics officer, Acxiom

Jerry Jones, chief legal and ethics officer, Acxiom

He said Acxiom encourages its corporate guests to visit the Witt Stephens Jr. Central Arkansas Wildlife Center to get a sense of the state. Jones added that while the focus often is on the River Market area of downtown, the burgeoning Southside Main Street, or SoMa neighborhood, can’t be ignored as a growing contributor to the city.

Jack Sundell and Corri Bristow Sundell own The Root Café, a funky SoMa restaurant that strives to serve cuisine using locally raised and grown food. Jack Sundell said the current economic climate in the city is ideal for a small business like theirs.

“This is obviously a very exciting time to own and operate a small business in downtown Little Rock, especially in the South Main neighborhood,” he said. “There is an enormous development initiative focused on downtown, and all of the neighborhoods in close proximity to downtown will benefit from it.”

He said SoMa is a prime location for businesses because of its easy access from the interstate and downtown, ample parking (often a problem in the congested River Market District to the north), proximity to business-lunch customers, and a supportive residential neighborhood.

Sundell said it appears that the city’s economy is “very much on an upward trajectory.”

The current environment is ripe for innovators and entrepreneurs, and that’s one reason for the creation of the Tech Park in the Block 2 Lofts building. Its goal is to create an innovation district enabling new forms of enterprise, collaboration, knowledge-sharing, and commercialization of ideas within and between Arkansas’ entrepreneurial, private, governmental, and academic sectors.

“The Little Rock Technology Park plans to play a significant role in boosting the innovation economy in central Arkansas,” Brent Birch, executive director of the park, said. “Our chief mission will be to stimulate and assist the flow of knowledge and technology coming in, out, and through our universities, companies, and entrepreneurs. Those efforts will facilitate the creation and growth of innovation-based companies, which equals more high-quality jobs and opportunities for Arkansans.”

Birch said Little Rock cannot currently compete regionally with Austin, Texas, Nashville, Tenn., or St. Louis in terms of resources or access to investment funds. He said the technology park will make Little Rock a player in the region.

“The tech park will be the aggregation point of science, data, technology, and investment funds, allowing bright, high-growth potential companies and people to stay home and flourish,” he said.

Innovators are already taking off in the city. David Allen recently created Tagless Style, a men’s curated style service that focuses on sustainability.

“We have a unique partnership with Goodwill where we take the very best donated clothing [and then] sort, clean, and press every item so it looks like new,” he said.

Little Rock is a good place to be right now, Allen said.

“While I admit, during college I made it my personal goal to get out of Arkansas as fast as I could, I have found a robust network of extremely talented people to surround myself with,” he said. “It is a very small and very supportive community here in Arkansas. From my interactions with other startup ecosystems, I have seen some of them be extremely competitive and showy. We all have a strong incentive to help each other out here because if just one startup finds a lot of success it would be really helpful for all of us in raising capital and talent.”

Chris Moses, president of Moses Tucker Real Estate, said that the technology park’s decision to locate on Main Street is “a harbinger of good things to come.”

“It will succeed and become a launching pad for emerging companies,” Moses said.

But for all the positives happening in Little Rock, there are still issues that need to be addressed. Jones said when possible hires visit the city, they inevitably ask about the school system.

“Public education has got to be addressed,” he said. “Our educational system has many strengths but also weaknesses, as seen when the state Board of Education had to take over failing schools in the system. That is the biggest impediment we face recruiting people to our company.”

Moses said that for Little Rock to successfully grow in the next decade a common agenda needs to develop among government, businesses, education leaders, and community leadership.

“At present, we are too fragmented,” Moses said. “If a common agenda can be developed, Little Rock has great potential.”

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