CHAPTER 5

ECONOMIC DEVELOPMENT

The importance of the economic health of the city has always been recognized. Barling is interested in diverse and progressive business development and in gainful employment for its residents. One of the most important goals of the City is to attract businesses that will offer quality jobs to its residents.

For the purposes of this section Barling is considered part of the Fort Smith region. The region is defined to include the counties of Sebastian and Crawford in Arkansas and Sequoyah County in Oklahoma. These counties comprise a geographic area known as the Fort Smith AR-OK Metropolitan Statistical Area (MSA). Fort Chaffee is discussed as an individual area in many instances because of the future reuse of the land designated as surplus which has been annexed by the City of Barling.

Competitive Assets and Constraints

In order to identify industry-specific targets, it is necessary to build a conceptual understanding of the competitive assets and constraints of Barling and the region in general. These competitive attributes can then be compared to a broad array of industries to identify those groupings which would be most compatible with regional assets and least impacted by known constraints. These assets and constraints are identified below.

  1. Competitive Assets
    1. Availability of Low Cost Land for Development

      2. One of Barling's and Fort Chaffee’s attributes, from an economic development perspective, is the availability of land to meet the needs of cost sensitive companies or those with large space needs. It is estimated that between two and four thousand acres of land will be available for business related development at Fort Chaffee. The redevelopment of this site will be managed by the Public Trust, which will assist developers and companies in developing land parcels. The Executive Director of the Public Trust will also work as a facilitator between prospective companies and the City of Barling. In this regard, the development process associated with this property will be facilitated and streamlined through a single agent. This will add some predictability to the development process and should encourage private investment in the site.

    2. Small City Quality of Life and Low Cost of Living

One of the most frequently touted attributes and sales pitches from economic development organizations across the country is "quality of life." It is also one of the least quantified measurements of an area’s potential benefits to companies. Simply put, quality of life means different things to different people. The quality of life in any region may be very appealing to some companies and unappealing to others, depending upon the specific attitudes and objectives of management. The Fort Smith region’s exceptional medical facilities are quite extensive for a small metropolitan area and are an attractive resource for families and companies looking to relocate. According to the Fort Smith Chamber of Commerce, the region is home to eight hospitals and clinics that offer residents a large variety of specialized medical services. The region is also ranked as one of the most affordable places to live in the country.

The information gleaned from the comments of local persons confirm that the region’s urban/rural setting, low cost of living, temperate climate, and outdoor recreational opportunities are attributes that many individuals and corporations value. As stated in an earlier chapter, the small town feel of Barling is one of its greatest attributes according to the City's residents.

For some industries a high quality of life is critical to attracting highly skilled and educated workers. Factors such as housing, education, recreation, cultural attractions, temperate climate and a low crime rate are vitally important, particularly for some high-tech industries. Many of the young programmers, engineers, and technicians that make up the skilled work force of the nation’s high-technology companies demand cultural, intellectual, and recreational opportunities at a higher level than a more mature manufacturing work force.

  1. Local and State Economic Growth

    2. Since 1990, the West and Northwest portions of Arkansas have experienced moderate to strong economic growth that has exceeded the state as a whole, in terms of employment growth, the rate of new business formations, and annual payroll growth. Most of this growth has occurred in the retail, service, health care, and transportation services.

  2. Regional Proximity and Access to Markets

    3. Despite its somewhat distant location from other major markets, Barling is located in one of the U.S.’s largest market areas. This location provides excellent east/west access to markets via Interstate 40 which connects the southeastern states of North Carolina, Tennessee, and Arkansas, with North Texas, New Mexico, Arizona, and Southern California. Barling is located within 500 miles of eight metropolitan areas that have a population of at least one million or higher. In the future it is proposed that a new interstate highway be constructed to run parallel with U.S. Highway 71, from Kansas City to Shreveport. If this project occurs as proposed, Barling and the Fort Smith region as a whole will sit at a major crossroads in the middle of the country. Unquestionably, this would place Barling in a very desirable location for companies seeking prime transportation corridors for distribution purposes. In fact, the proposed highway corridor would pass through the Fort Chaffee site, which could enhance the visibility and value of the property.

    According to a 1997 survey of corporate manufacturing executives conducted by Area Development magazine, highway accessibility was rated the second most important site selection factor, behind labor costs. Nearness to major markets ranked ninth on the site selection list.

  3. Well Developed Transportation Services Industry

    4. According to the Fort Smith Chamber of Commerce, there are 31 motor freight companies located in Fort Smith, with a number of specialized carriers that provide services to local businesses. Common motor freight carriers can accessthe Dallas-Fort Worth, TX, Kansas City, MO, Memphis, TN, Oklahoma City, OK, Tulsa, OK, St. Louis, MO, Shreveport, LA, and New Orleans markets on an "a.m. next day" basis. In addition, there are 30 to 40 smaller MSAs within a 500 mile radius. Access to Mexican markets is available via U.S. Highway 71 and barge service to the Mississippi River is available via the Arkansas River. Rail service to major southern and also Midwest markets is also possible via the Arkansas-Missouri Railroad, Fort Smith Railroad, and Kansas City Southern Railroad.

  4. Specialized Worker Training Programs/Resources

Westark College has established itself as one of the leading institutions in the nation, particularly in the area of continuing education and workforce training. Westark’s Business and Industrial Institute (BII) provides a wide array of specialized courses and training programs for local industries such as:
bulletQuality and Productivity Technology - Classes are tailored to the needs of individual industries in the area of Total Quality Management practices. The BII also conducts classes in ISO9000 standards for companies interested in gaining certification to European standards for exporting U.S. made products.
bulletManagement and Manufacturing Technology - The Management and Manufacturing Technology element of the BII program is focused on improvements in supervisory communications and individual/team performance by hourly employees and management personnel.
bulletInformation Management Technology - Computer training from BII provides convenient, cost-effective training to speed through the computer "learning curves." Courses range from introduction to computer programming to advanced/specialized skills.
bulletWork Keys Training Needs Assessment - This program helps individuals re-enter the labor force after a long absence or allows workers, wishing to changes occupations, to establish training goals to accomplish this change.
bulletManufacturing Technology Extension Service and Arkansas Manufacturing Extension Network - The Manufacturing Extension Center bridges the "technology gap" between sources of manufacturing technology and small- to mid-sized companies that need it.
bulletCommunications for Customer Service - BII also provides programs that focus on the practical application of the arts and skills of written and spoken communications.

Since 1988, BII has conducted more than 476,000 total training hours involving more than 35,500 enrolled employees. In-plant training and customized contract training and technical assistance have been provided to 135 different companies and governmental agencies at 36 locations outside of the Fort Smith region. In addition to these programs, Westark College offers certificate programs in Workforce Leadership (problem solving and decision making), General Industrial Plant Maintenance, Computer Aided Drafting and Design (CADD), Electronics, Welding, and Mechanical (Machine Tool Technology) programs. The College’s Division of Health Occupations provides Associates Degree in Nursing Technology (AND), Paramedic Technology (PT) and Surgical Technology (ST).

Around the country, Community Colleges are playing an increasingly larger role in economic development. A current article in the February, 1998 issue of Economic Development Quarterly, stresses the importance of community colleges in providing specialized assistance to manufacturing and other industries to keep them innovative and on the cutting edge of technology. In Alabama and Massachusetts, Centers for Technical Excellence have been established to work with certain key industries such as advanced manufacturing, electronics, environmental technology, biotechnology, and telecommunications. These programs function in much the same way as Westark’s Business and Industry Institute. The article also points out the need for community colleges to network with one another and with the local manufacturing community.

  1. State Incentive Program

A tool that local officials can use in attracting firms to Arkansas is the ability to offer tax and other incentives to companies looking to relocate to the region. The State of Arkansas offers a competitive array of incentives to companies looking to invest in new plant and equipment, promote labor force stability, and create new jobs.

Direct Financial Incentives:
bulletIndustrial Development Bonds - Municipalities and counties can issue industrial development bonds for securing and developing property, providing up to 100 percent financing on land, buildings, machinery and equipment.
bulletIndustrial Development Bond Guarantees - The Arkansas Economic Development Commission (AEDC) is authorized to guarantee industrial development bonds for sound, medium-sized firms whose borrowing needs are too minimal to be attractive to the general Industrial Development Bond (IDB) investment public.
bulletNonprofit State Credit Corporation - The Arkansas Capital Corp. provides loans to small business that are unable to obtain such assistance from other sources.
bulletCustomized Industrial Training - Specialized training offered through AEDC’s Industry Training Program.
bulletInvestment Fund - The Arkansas Science and Technology Authority administers a $2.7 million investment fund to provide seed money to new and developing technology-based companies.

Basic Business Taxes:
bulletDaycare Facilities Program - Approved companies are eligible for a refund on sales and use taxes on construction materials and furnishings used in constructing daycare facilities. Companies are also eligible to receive a credit of 3.9 percent of the total annual payroll of employees working in company daycare facilities.
bulletGoods In Transit - New aircraft manufactured or substantially completed within the state and sold for use outside the state are exempt from the sales tax.
bulletManufactured Tax Credit - A credit on sales and use taxes of seven percent of total costs is available to companies that have been operating in the state for at least two years investing $5 million or more.

The State of Arkansas also offers a number of other tax concessions on machinery and equipment purchases, industrial fuels and raw materials.

  1. Right-To-Work and Anti-Violence Law State

    2. The State of Arkansas is a Right-To-Work state which makes it attractive to companies located in other parts of the country where unionized labor is more prevalent. The State’s Right to Work laws prohibit the denial of employment to any person because of membership in or affiliation with or resignation from a labor union, or because of refusal to join or affiliate with a labor union. Arkansas has also enacted the Anti-Violence Act which prohibits the use of force or violence or threats of violence to prevent any person from engaging in any lawful vocation in the state. For companies accustomed to dealing with regular union activities, work stoppages, or strikes, Arkansas is viewed as a more stable and predictable work environment. As compared to other states in the Midwest and Northeast, with 25 to 35 percent unionized labor, Arkansas has a very small unionized labor force of approximately 3.9 percent of manufacturing workers.

  2. Competitive Energy and Natural Gas Utility Rates

The Fort Smith region is fortunate to be served by one of the lowest cost energy providers, Oklahoma Gas & Electric Company (OG&E), in the country. According to a comprehensive electricity rate comparison conducted by Plants, Sites & Parks magazine (December, 1996), OG& E had a quoted rate of 3.26 cents per kilowatt hour. This ranked OG& E sixth out of the state’s 31 electric utility providers. Until electricity deregulation occurs, the Fort Smith region will enjoy a competitive advantage because of its lower electrical rates. The cost of natural gas in the region, provided by the Arkansas Oklahoma Gas Corporation, is also considered competitive when compared with other metropolitan areas.

  1. Locational and Development Constraints
  1. Limited Inventory of Quality Building Space and Affordable Lots in Industrial Park Settings

    2. One of the major constraints in attracting new business/industry to the Fort Smith region is the quality and condition of the existing building inventory. Prospective companies typically prefer to look at existing structures, particularly in less expensive markets where lease rates are low and building construction costs are not prohibitively high. Without a suitable supply of building space to meet a wide variety of company needs, the region cannot be competitive. Much of the existing building space on the Fort Smith market is classified as warehouse/manufacturing space and is generally located at stand alone sites in older industrial areas.

    The region has two primary industrial parks. Both parks, however, have significant constraints. The Walker Industrial Park, located off U.S. Highway 71 in Fort Smith, is a 900-1,000 acre industrial park served by all major utilities (i.e., water, sewer, gas, and electric), access roads, and fiber optic communication lines. The park’s tenants are primarily large industrial companies such as Planters Peanuts, Quantex,Willamette Industries, and Hiram Walker.This park has over 500 acres of land available for sale at roughly $45,000 per acre. The owner of the property readily admits that the land is priced high for the market, but the cost is necessary in order to recoup earlier infrastructure investments, which were made when the park was originally prepared for development.

    The price at the Walker Industrial Park is roughly $30,000 per acre more expensive than industrial lots at the Crawford County Industrial Park. The Crawford County Park is a lower end industrial park with an eclectic mix of users ranging from a manufacturer of bridge girders to a poultry processor, to a number of small industrial shops and contractors. The overall development theme of the park is unclear, which has attracted a number of high impact users along side corporate office space.

    Due to cost and quality reasons, neither park is well suited to serve a significant portion of the industrial market. This provides an opportunity for the Fort Chaffee property to be more responsive to the market by offering a wide range of site development options.

  2. Presently Inadequate North-South Highway Access

    3. The western portion of Arkansas is served by U.S. Highway 71, which runs north and south from Kansas City to Baton Rouge. This highway is not really suitable for high volumes of commercial truck traffic and thus is viewed as a development constraint within the region. As mentioned previously, a new north-south interstate highway is proposed to be constructed in the future, but local officials are uncertain when this project will be initiated. The Fayetteville-Fort Smith segment of the project, however, is scheduled for completion in November, 1998. This project would enhance the economic development potential of both the Fort Smith and Fayetteville metropolitan areas.

  3. High Building Disposal Costs at Fort Chaffee

    4. The current condition and reuse potential of many surplus buildings at Fort Chaffee is so poor that large-scale demolition may be necessary. Therefore, the future removal of these buildings could be a development obstacle to the Public Trust as it seeks ways to redevelop the site. Failure to remove these buildings will inevitably tie up significant land parcels and delay redevelopment. It could also negatively impact the Public Trust’s ability to market the property in the future.

  4. Limited Labor Force Size, Growth, and Capacity

The earlier analysis of the region’s labor force indicates that the western region of Arkansas has several labor force constraints that could affect future industry targeting efforts. The size of the local labor force is modest, but more importantly, the labor force has not grown very much over the past decade. In addition, the number of workers with higher end technical skills and education is not very large according to Arkansas Employment Security Department estimates. This factor could limit the region’s ability to attract certain companies with specialized or technical labor force needs. On an individual company-level, these issues could be addressed through specialized worker training programs. It will take time, however, for the region to upgrade its labor force skills.

e. Limited Labor Force Availability

Beyond today’s tight labor markets, there is the potential for repeated labor shortages in the future due to slow labor force growth. This might result in structural problems in labor availability which could cause increased competition between larger regional employers. The introduction of higher paying, semi-skilled jobs into the region could also create labor problems for companies that rely on a lower paid, lesser skilled workforce.

3. Summary and Conclusions

In summary, the competitive assets and constraints associated with marketing the Barling-Fort Smith region and Fort Chaffee are outlined below.

Competitive Assets

bulletAvailability of Low Cost Land for Development and One Stop Development Permitting
bulletSmall City Quality of Life Factors and Low Cost of Living
bulletLocal and State Economic Growth
bulletRegion's Proximity and Access to Markets
bulletWell Developed Transportation Services Industry
bulletSpecialized Worker Training Programs/Resources
bulletState Incentive Package
bulletExisting State Right-To-Work and Anti-Violence Laws
bulletCompetitive Energy and Natural Gas Rates

Locational and Development Constraints

bulletLimited Inventory of Quality Building Space and Affordable Lots in Industrial Park Setting
bulletInadequate North-South Highway Access
bulletHigh Building Disposal Costs at Fort Chaffee
bulletLimited Labor Force Size, Growth, and Capacity
bulletLimited Labor Force Availability

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

POLICIES AND STRATEGIES

Policy: Economic Development will be based on comprehensive economic planning and assisted by Federal, State, and local programs as available and cost effective.

Strategies:

1) Assess service costs and revenues associated with new developments; consider environmental costs and economic benefits such as jobs.

2) Maintain information on available or potential sites for economic development and seek to conserve suitable locations for appropriate use.

3) Maintain information on labor resources and expertise available from educational institutions.

4) Maintain information on incentives available to desired businesses such as industrial revenue bonds.

5) Consider further use of redevelopment authority to improve public facilities and to develop derelict property.

6) Consider leasing or trading city land to make business sites available where consistent with other goals.

7) Encourage local equity participation in local development in order to retain more economic benefits within the community.

 

 

 

 

 

 

 

 

 

 

 

 

Policy: The city will seek fuller employment for its residents.

Strategies:

1) Maintain better information on the types of jobs that are projected, the skills required, and available training programs.

2) Recognize the role that private training facilities have in Sebastian County and aid in finding suitable sites.

3) Encourage formation of a basic English language skills center for non English speaking residents by working closely with area schools and other appropriate agencies.

4) Encourage employers to give consideration to the residency of equally qualified job applicants and to advertise jobs locally in order to strengthen the economic and social health of the community and to reduce commuting.

5) Recognize that small businesses create most new net jobs and continue to consider their needs for site and financing.

6) Consider a farmer's market and expand other opportunities for self-employment for those with limited initial capital.

Policy: The City will monitor and seek to strengthen important commercial sectors.

Strategies:

1) Recognize and enhance Barling's strong position as a retail center for consumer durables such as automobiles; recognize need for visibility, seek consolidation of frontage into special use areas and buffer surrounding uses.

2) Identify retail sectors where Barling can enhance its market share; work with present retailers, solicit new retailers, and target city services to enhance the attractiveness of potential sales locations.

Policy: Attractive, successful commercial centers will be fostered in land use decisions.

Strategies:

1) Recognize the importance of continuous frontage to pedestrian shopping areas such as downtown and shopping malls; discourage unwarranted intrusion of other uses which weaken the attractiveness of retail areas. Encourage supporting uses, such as residential and office, to locate above retail.

2) Concentrate commercial areas into more attractive shopping areas by breaking up underutilized commercial strips with areas of higher density housing.

3) Provide new commercial centers as indicated by growth, need for special use

commercial districts, or lack of neighborhood convenience centers.

4) Consider mixed use zoning which would encourage combination of commercial frontage with new residential development; consider reduction in parking requirements if combined uses have different hours of use allowing shared parking.

 

Policy: Mixed use, restoration, and residential projects will be encouraged in the downtown area.

Strategies:

1) Encourage moderate and upper income residential development to increase market support for business and to extend the hours of downtown activity.

2) Help secure financing for desired rehabilitation and mixed-use projects, recognizing that financing for such projects is difficult to secure.

3) Develop residential amenities in the downtown including hill and creek open space and pedestrian streets with controlled traffic.

 

 

Policy: Pedestrian amenities, cultural facilities, and open space resources will be augmented and negative aspects constrained in making the City an attractive place.

Strategies:

1) Encourage pedestrian circulation with pedestrian ways that connect principal destinations.

2) Encourage sidewalk cafes, festivals and events and consider a Farmer's Market or other controlled open air events to enliven the downtown.

3) Develop cultural amenities.

4) Continue to enhance the streetscape with landscaping.

5) Prohibit, to the maximum extent permissible by law, establishment of new uses such as card parlors, pawn shops, and sexually oriented businesses that will detract from the enhancement of Barling.

6) Encourage building maintenance, enforce design standards and pursue sign standards in order to make the city more attractive.

 

Policy: The city will seek to maintain the efficiency of the Industrial Corridor with road and transit improvements and encouragement of appropriate land use.

Strategies:

1) Limit nonindustrial uses in the Industrial Corridor which would interfere with the primary use of the area as industrial land.

2) Improve traffic conditions in the Industrial Corridor by coordinating roadway and transit improvements.

3) Promote and protect the appearance of the Industrial Corridor to encourage further quality development.