story by Roby Brock, with Talk Business & Politics, a content partner with The City Wire
roby@talkbusiness.net
Within the next month, Arkansas economic officials may declare an end of the week announcement as either Good Friday or Black Friday.
Arkansas Economic Development Commission Executive Director Mike Preston said Thursday (Aug. 20) that his agency has been told by Pentagon officials that an award of the JLTV superproject will be announced on either Friday, August 28, September 4, or September 11.
“The latest that we understand is that an announcement is going to be coming in the next few weeks either on August 28th, September 4th or September 11th – all of which happen to be Fridays,” said Preston, who delivered a speech at the Bean Hamilton Corporate Benefits 2015 Executive Forum at the Clinton Presidential Library Thursday morning.
At the request of Gov. Asa Hutchinson (R) in late May, state lawmakers passed an $87 million bond package to support Arkansas’ effort to land the $30 billion Joint Light Tactical Vehicle (JLTV) project, which would be located at Lockheed Martin’s Camden facilities. Two other defense contractors – Oshkosh Corp. and AM General – are also competing for the bid.
The JLTV will replace the Humvee, which has been used by the military since 1985. Should Lockheed Martin win the contract, the company plans to invest more than $125 million in its South Arkansas facility. Approximately 600 new full-time positions will be created at the facility and as many as 655 indirect jobs will be created across the region as a result of the project, according to officials.
At an average wage of $57,000, the direct jobs will result in an added payroll in the South Arkansas economy of nearly $34.2 million annually, or $855 million over the next 25 years.
CHALLENGES
In addition to discussing the potential Camden superproject, Preston also spent a portion of his 30-minute speech recounting his first four months on the job at AEDC. He highlighted challenges that he felt the state needed to address ranging from workforce development to rural job creation to marketing the state globally. Preston said Arkansas has about a $1 million marketing budget compared to states like New York that are spending $100 million annually to tell the world it’s a great place to do business.
“It’s not important to me for people to know who AEDC is, it’s important to me that people know who Arkansas is, where Arkansas is, and that it’s a great destination to do business,” he said.
Preston also said the state’s tax structure has Arkansas at a competitive disadvantage with its regional peers.
“We don’t stack up well against our southeastern competitor states when it comes to tax structure. When you stack us against a Florida or Texas that doesn’t have a state income tax, they’re going to use that against us. Believe me, I’ve been in economic development in Florida and I’ve used that against states with state income tax.”
Preston also said Arkansas’ corporate and business taxes are not competitive with other states and are being used against the state with economic prospects.
STILL AHEAD
While Preston defined challenges, he also said there were more positives working in the state’s favor from his observations. For starters, he said Arkansas is the headquarters for seven home-grown Fortune 500 companies, which is more than Florida, where he previously worked, could boast.
He said leadership from Gov. Hutchinson and the state legislature has made his job easier, noting that the governor has taken appointments from prospects on short notice and job creation of all sizes.
“I can have a client or prospect in my office as small as 5 or 10 jobs, I can pick up the phone and call or text and say, ‘Governor, I have a client. Do you have 10 minutes to sit with him?’ He’ll say, ‘Sure, Mike. Bring him on over.’ He’s always willing to open his door.”
Preston also said Arkansas being a small state is an advantage as leaders “can act and react much more quickly” in the decision-making process.
The relatively new AEDC director said he has several goals established, and in particular, he wants more measurement of his team’s efforts. Since Gov. Hutchinson took office, Preston said AEDC has closed on 58 projects creating 1,903 new jobs and securing $1.33 billion in capital investment. The new jobs are averaging $43,000 a year. Overall, Arkansas has seen roughly 25,000 net new jobs added to the labor force since January.
Other short-term and long-term goals for Preston include:
• Having Arkansas recognized as a “global place to do business”;
• Garnering more support from the business community for economic development;
• Rural boot camps to help less populated areas of the state create teams to drive job creation; and
• An increase in the marketing budget to promote Arkansas as a place to do business.