REX NELSON: An untapped resource

It's a humid Friday afternoon, but that doesn't discourage visitors from drinking hot beverages inside Kollective, the hip Hot Springs coffee shop on Central Avenue in the shadow of the eyesore that once was the Majestic Hotel. While the soon-to-be-demolished Majestic represents Hot Springs' past, shops like Kollective represent its future, the kind of place that not only can attract tourists but also retirees who live in the area along with the young, talented people the city's leaders are trying to recruit.

Sitting in a seat facing Central Avenue is Jim Harlow, a Fordyce native who received his undergraduate degree at Henderson State University in Arkadelphia before beginning graduate studies at the University of Arkansas in Fayetteville. Following graduate school, Harlow left the state in 1974 for a career in the chemical business that took him around the world. He retired as the director of human resources for Dow Chemical's international joint venture projects and made the decision to return to Arkansas, buying a home at Hot Springs Village. Harlow is a strong advocate for Arkansas, but doesn't believe it is doing enough to attract retirees.

Arkansas once was the pacesetter in the retirement industry thanks to businessman John Cooper of West Memphis, who developed Cherokee Village, Bella Vista and finally Hot Springs Village. Cooper formed the Cherokee Village Development Co. in 1954, which was reorganized as Cooper Communities Inc. in 1971. He served as president and chairman until 1968, when son John Cooper Jr. took over. Born in Earle in 1906, the elder Cooper received a law degree in 1927 from what was then Cumberland School of Law in Lebanon, Tenn.

The Great Flood of 1927 was followed by the Great Depression. Arkansas was hit especially hard and didn't recover for decades, losing a higher percentage of population than any other state from 1940-60. While the state's leaders were focused on attracting manufacturers to stem the outflow of residents, Cooper saw retirement villages as a way to bring people from colder states. With the initial success of Cherokee Village, non-Cooper developments such as Horseshoe Bend in Izard County and Holiday Island in Carroll County followed.

Harlow, a member of the governmental affairs committee at Hot Springs Village, says that Arkansas, the early leader in the industry, is behind the curve in the 21st century.

"We've been lobbying the state to consider retirement and relocation as an economic development strategy, just as attracting a steel mill or an automobile assembly plant would be," he says. "What we have to realize is that there are 79 million baby boomers who have reached or will soon reach retirement age. Almost 10,000 people retire each day. Arkansas attracts only about 10,000 of these people each year. Not only are there the retirees, there are the relocators who are highly mobile and looking for great places to live. There are the people of any age who want to relocate but still plan to work. A lot of these people are entrepreneurs. They can live anywhere they wish as long as they have a broadband connection. They can make money working from home. Each retiree or relocator spends an average of $30,000 a year purchasing goods and services. Two hundred of these households relocating to Arkansas is the equivalent of attracting a major manufacturing facility. And you don't have to worry about a tax incentive package."

Harlow refers to retirement and relocation as a "clean, green, renewable industry for Arkansas." He says that almost 80 percent of the property tax revenue that goes to the school districts at Jessieville and Fountain Lake comes from Hot Springs Village even though less than 50 percent of Jessieville students and less than 20 percent of Fountain Lake students live in the development. Tourism can get people to Arkansas, but there must also be a sustained effort to convince them to move here permanently. Studies have shown that people visit an area an average of five times as a tourist before deciding to relocate there. Harlow says they're looking for affordable housing, scenic beauty, cultural activities, a good climate and access to major highways, airports and medical facilities.

"Places like Arkansas are asleep at the wheel when it comes to recognizing the impact that this massive retirement-age population could have on their economies," Harlow says. "We have the natural resources, the quality of life and a cost of living that's attractive to this population. Our neighboring states all have aggressive retirement-relocation marketing programs. There's too much myopic thinking on the part of economic developers in Arkansas that the only development strategy is one that's centered around industry."

He points out that retirees are the only population segment paying more in taxes than they cost in services. When retirees come to a new place, they build or buy homes and begin paying local taxes. They bring their financial assets such as savings and pensions with them. New Social Security and Medicare dollars flow into the state. They have important skills and like to volunteer in their communities. They like to eat out, go to concerts, attend sports events and shop.

The good news is that Mike Preston, director of the Arkansas Economic Development Commission, and Kane Webb, director of the Arkansas Department of Parks & Tourism, get it. Now, Preston and Webb must convince 135 legislators to invest more money in retirement and relocation programs. The return on investment likely will be impressive.

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Freelance columnist Rex Nelson is the director of corporate community relations for Simmons First National Corp. He's also the author of the Southern Fried blog at rexnelsonsouthernfried.com.

Editorial on 06/22/2016

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