ArcBest set to expand, add jobs in Fort Smith

Posted: May 31, 2014 at 5:34 a.m.

NWA Media/ANTHONY REYES Judy McReynolds, CEO of ArcBest Corporation, from left, Grant Tennille, director of Arkansas Economic Development Comission, and Tim Allen, president of the Fort Smith Chamber of Commerce, during a press conference for an expansion plan for ArcBest Corporation Friday, May 30, 2014 at the Forth Smith Convention Center in Fort Smith. The company announced a land purchase agreement for a new corporate facility creating hundreds of jobs through 2021. Groundbreaking for the new property will take place in the fall.

Correction: ArcBest is using rented space on Rogers Avenue in downtown Fort Smith to house its ABF Logistics employees. The city where the logistics offices are located was incorrect in this article.

FORT SMITH -- ArcBest Corp. is spending $30 million to build a new corporate headquarters and add 975 jobs to the area over the next seven years.

As the transportation and logistics company looks to increase revenue to $3 billion by 2015, Chief Executive Officer Judy McReynolds said, more room for employees to operate is a necessity. ArcBest will build a 120,000- to 150,000-square-foot facility on at least 30 acres at Chaffee Crossing and continue to operate its nearly 200,000-square-foot headquarters in Fort Smith as the flagship for its ABF Freight trucking segment.

"We have plans for significant growth at ArcBest and all our subsidiaries. We need room to expand," McRey­nolds said. "This is a great problem to have as we put the Great Recession behind us."

ArcBest, which changed its name from Arkansas Best earlier this month, will receive tens of millions in local and state tax incentives to keep its headquarters in Fort Smith. Last year the company celebrated its 90th year of operation in Fort Smith where it was founded as a trucking company.

City officials will vote next week on a measure that would refund to the company local sales tax on materials to build the headquarters. ArcBest, once approved by the city, would be eligible for a refund on the combined 9.25 percent sales tax with no cap on what the company can spend to build the facility.

Plus, ArcBest is eligible for a refund on the 3.9 percent withholding tax for each new employee hired over the next 10 years. That incentive could yield between $16 million and $19 million for ArcBest, according to Arkansas Economic Development Commission Executive Director Grant Tennille.

"If everything goes exactly as Judy announced, it will amount to, we believe, somewhere between $16 million and $19 million over the next 10 years," Tennille said.

A memorandum of understanding between ArcBest and the Fort Chaffee Redevelopment Authority sets a price of $10,000 per acre to build a new headquarters and data center. Members of the redevelopment authority board will meet Monday to finalize an agreement for the land purchase with an option to buy an additional 10 acres.

Fort Smith city directors are to meet Tuesday to discuss an agreement with the Fort Chaffee Redevelopment Authority to split the cost of $3.8 million for design and construction on a road leading to the new ArcBest facility. ArcBest will continue to operate ABF Freight and ABF Technologies in its existing headquarters in Fort Smith. ABF Logistics employees have moved into a rented space in downtown Rogers to help with the company's expansion plans.

Walter Echols, ArcBest vice president of real estate, said the company considered multiple options in the Fort Smith area, including warehouses and other existing space, but couldn't find a suitable option to convert into its corporate headquarters. An architect, general contractor and other details for the project are under review, but a groundbreaking is scheduled for this fall with completion in late 2015 or early 2016.

Fort Smith Chamber of Commerce President Tim Allen said the announcement by ArcBest underscored the importance of economic developers putting time and resources into retaining existing businesses. No average salary for the new jobs was available, but Allen said many of them would be high-paying, professional jobs including accountants and attorneys who would be paid from $50,000 to $100,000.

"If you pay attention to your existing businesses and work with them, they'll eventually reinvest back in the community," Allen said. "Retaining jobs is just as important as bringing in new. ArcBest has made a huge investment in Fort Smith."

It was the second major jobs announcement in Fort Smith this week, an encouraging sign for a community that has struggled since 2012 when Whirlpool closed its operation and left nearly 5,000 unemployed.

Georgia-Pacific said Thursday that it's spending $40 million on new technology and equipment to make paper plates at its Dixie plant in Fort Smith. Construction is underway, and the new line is expected to begin production in 2015.

Fort Smith's employment numbers have been improving recently after the region took a hit in June 2012 with the shuttering of the city's Whirlpool Corp. plant. At its peak, Whirlpool employed 4,600 workers in Fort Smith. When the appliance-maker closed its plant, the area lost about 800 jobs that still remained.

Preliminary data on the Fort Smith metropolitan area -- which covers Sebastian, Crawford and Franklin counties in Arkansas and Le Flore and Sequoyah counties in Oklahoma -- show the region's unemployment rate at 5.9 percent for April, down from 7.5 percent from the same period a year ago. The area's workforce stood at 126,596, down from 131,065 for April 2013. The average unemployment rate for Arkansas in April was 6.1 percent, down from 7.1 percent a year ago.

The Economic Development Commission's Tennille said he anticipated a return trip to Fort Smith in the coming months, but declined to offer additional details.

"All of the things a community needs to grow and prosper are here," Tennille said. "We have seen over the last couple years that we can come back from tough times. Fort Smith's best days are certainly ahead. I'm completely confident -- I won't go into it beyond that -- I'll be back here before the end of the year."

News of the new ArcBest headquarters comes at a time the company is considering the fate of an ABF Freight distribution center in North Little Rock. ABF Freight is considering a move of that facility and 283 jobs to Memphis, aided by up to $4 million in incentives offered by the Economic Development Growth Engine of Memphis and Shelby County.

No timetable for the decision has been set, said David Humphrey, ArcBest vice president of investor relations. ABF Freight is evaluating its entire freight network and closed 30 terminals in 2013 and 2014 as part of the process.

Gov. Mike Beebe met with Teamsters Local 878 representatives on Tuesday to discuss the potential move. ABF Freight employs close to 400 Teamster members in North Little Rock.

Information for this article was contributed by John Magsam and Dave Hughes of the Arkansas Democrat-Gazette.

A Section on 05/31/2014