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story.lead_photo.caption Doug McMillon, Wal-Mart president and chief exeuctive officer, speaks during the Wal-Mart Shareholders Meeting Friday, June 2, 2017, at Bud Walton Arena in Fayetteville - Photo by Jason Ivester

Wal-Mart Stores Inc. is moving forward with plans to build a new home office in Bentonville, replacing a building that has been the hub of the retailer's operations since 1971.

The new headquarters will be located on 350 acres on the east side of J Street between Central Avenue and Arkansas 102 near downtown Bentonville, according to the company. It will replace the current home office, which is less than 2 miles away on the corner of Southwest Eighth Street and Walton Boulevard.

A spokesman said Wal-Mart is in the early phases of planning and designing the project and estimates a five- to seven-year timeline for completion. An estimated cost has not yet been established, according to the retailer.

"We've been here in Northwest Arkansas for over 50 years and we're preparing now to cement the roots for the next 50-plus years," Wal-Mart spokesman Randy Hargrove said.

Wal-Mart's current home office operations consist of more than 20 buildings spread throughout Bentonville. The company said one of the primary purposes for building a new headquarters is to consolidate more of those operations to a centralized campus to improve collaboration and efficiency.

When announcing the plan to employees Friday morning, Wal-Mart Chief Executive Officer Doug McMillon described the current setup as a "patchwork" of buildings.

"Many of these facilities, including the current Home Office, are significantly beyond their shelf life," McMillon wrote in a memo to employees. "They are expensive and inefficient to maintain, costing millions of dollars of accelerating upkeep every year. And because they are so dispersed, they literally encourage us to work in silos and cause us to waste time and energy traveling between locations, many of which have inadequate parking options."

Wal-Mart intends to shift most of its home office workers onto the central campus. Sam's Club will retain its current headquarters, which is farther south in Bentonville off Moberly Lane near Interstate 49.

Analysts believe that the new headquarters will help the company remain competitive in attracting workers in a retail environment changing rapidly because of technology.

"Wal-Mart realizes that working environment is an important draw or turn-off, particularly when it comes to recruiting tech talent, and that these candidates aren't just needed in California," said Carol Spieckerman, a retail consultant and president of Spieckerman Retail in an email. "The promise of a new building may even help Walmart retain existing talent, but it will also draw a stark contrast to the legacy buildings."

Mervin Jebaraj, interim director of the Center for Business and Economic Research at the University of Arkansas, Fayetteville, said tech companies like Amazon, Apple, Google and Facebook all have impressive campuses. Amazon announced earlier this month that it plans to build a second headquarters, leading several cities -- including Little Rock -- to announce their intentions to submit proposals.

Jebaraj said Wal-Mart will benefit from a new home office as well.

"To be able to hire the best workers you also need to provide them with more than just money, like a really nice office space to work in. A modern office building to work in," Jebaraj said. "If you combine that with everything else Wal-Mart and the Walton Family Foundation is doing in the region to improve the quality of life, those things go hand in hand in recruiting the best and the brightest to work here."

While Wal-Mart publicly revealed its intentions Friday, Hargrove said the company has been contemplating a new home office for "a number of years."

County property records and the city's geographic information system show that Wal-Mart owns nearly 400 acres south of East Central Avenue, north of Southeast 14th Street, east of Southeast J Street and west of Interstate 49, an area that is roughly 720 acres.

Much of that land already has Wal-Mart buildings on it, including the David Glass Technology Center, the Sam M. Walton Development Complex, the Walton Life Fitness Center and a distribution center.

The company bought several nearby residential properties and a few commercial properties nearby over the past few years.

A couple of the most recent are undeveloped properties along Phyllis Street north of Southeast 14th Street and just west of Interstate 49. Wal-Mart bought two tracts of land, one 1.99 acres and the other 5.22 acres, for $1.55 million each from HCB LLLP at the end of March, according to county property records.

A couple neighborhoods create a peninsula from Southeast 14th Street north into the Wal-Mart-owned land. Several neighborhoods sit northeast between Wal-Mart's land and Interstate 49.

"This is the kind of news that remakes a community in a sense," said Brian Bahr, the city of Bentonville's interim community and economic development director. "You think about Amazon with their [second headquarters], wherever they locate that, that's going to be a game changer for that community. It's no different than Wal-Mart announcing a new headquarters in Bentonville. It's a game changer for us."

A groundbreaking date has not been set, but construction will be completed in phases. Hargrove said the costs associated with the project will be part of the company's annual budgeting process.

The campus will include features like improved parking, meal services, natural lighting, a new fitness center and close proximity to the community trail system.

A new fitness center will be one of the first phases of the project, Hargrove said.

Wal-Mart already has several buildings located on the tracts of land designated for the campus, but many of those will need to be removed, according to the company. Wal-Mart said it will address those details as plans are finalized and will make sure the new home office "integrates well with our surrounding neighbors."

Any decisions regarding the future use for the current home office also will be determined.

It's not clear whether Wal-Mart intends to sell the property and surrounding buildings or use them for another purpose within the company. But Wal-Mart said it will "work with Northwest Arkansas leaders to ensure there is a focused dialogue on the future of the properties as we move the region forward."

"Bentonville is a unique community in that, for the most part, the warehouse space that's available has become vendor space in a lot of instances," Bahr said. "Wal-Mart has done a very good job of reusing buildings throughout the community. ... They've utilized those for numerous opportunities."

Wal-Mart first moved to its current home office in 1971, when founder Sam Walton recognized the company had outgrown its space in downtown Bentonville.

McMillon said in his note to employees that as the company continued to grow over the years, the home office footprint followed as well. But it did so without a "holistic long-term plan."

Wal-Mart said it will work closely with state and local officials as it cement plans for its next move.

"We know how important it is to engage from a public affairs standpoint," Wal-Mart spokesman Greg Hitt said. "[Friday's] announcement really kicks off that coordination process for us. We'll be working and in dialogue with city and state officials and with other stakeholders across the state and Northwest Arkansas."

The Greater Bentonville Chamber of Commerce said in a statement Friday that the announcement shows Wal-Mart will remain "the backbone of our economy and help make the area a great place to live and work." The Arkansas Economic Development Commission also applauded Wal-Mart's announcement and said it will support the company.

"We have pledged our commitment to Wal-Mart and our support for the planned development of their new facility, and we are very proud to share in this amazing announcement," commission Executive Director Mike Preston said in a statement. "However, due to the active nature of this project, and our ongoing discussions with Wal-Mart leadership, we are unable to comment on incentives or further discuss the details of our involvement."

Photo by Arkansas Democrat-Gazette
Map showing the Location of Wal-Mart’s new home office
Photo by David Gottschalk
Mervin Jebaraj, interim director for the University of Arkansas' Center for Business and Economic Research, speaks Tuesday, May 23, 2017, at the Hilton Garden Inn during the Quarterly Business Analysis luncheon in Fayetteville. Jebaraj presented the region’s employment and business activity during the first quarter of the year.

Information for this article was contributed by Melissa Gute of the Northwest Arkansas Democrat-Gazette.

A Section on 09/16/2017

Print Headline: Wal-Mart to build new headquarters; Site set near downtown Bentonville

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