story by Michael Tilley
mtilley@thecitywire.com
Health Management Associates (HMA) will operate a regional service center in Fort Smith that will employ more than 500 with average annual salaries potentially exceeding $40,000.
It’s just what the doctor ordered for a regional economy that has seen better days.
Officials with Naples, Fla.-based HMA announced the expansion Thursday (April 4) during a press conference at the Fort Smith Regional Chamber of Commerce. HMA is the parent company of Sparks Health System in Fort Smith and Summit Medical Center in Van Buren.
The almost 90,000-square-foot facility will be housed in what is now the Phoenix Expo Center in what was once a portion of Phoenix Village Mall. HMA estimates the annual payroll will be $21.5 million, with the center at full employment within 12 months. The company is also investing $4 million in furniture, fixtures and equipment for the new center. The facility is scheduled to begin operations in July.
Little Rock-based Metropolitan National Bank is the lead financier for the overall $13.5 million project, with two other financial institutions participating in the loan.
“Health Management is consistently looking for ways to improve our patient’s experience and we are proud to continue our investment in the Fort Smith region with the development of this new Regional Service Center,” Kerry Gillespie, HMA executive vice president said in a statement. “This project would not have been possible without the collaborative efforts of Governor Beebe, the Chamber of Commerce and the developer, and we applaud their vision and determination.”
LANDING THE PROJECT
Lance Beaty, a partner with mall property owner FSM Redevelopment Partners, has worked with HMA and state and local officials for more than a year.
“It’s clearly a combined effort with a lot of different people from the AEDC (Arkansas Economic Development Commission) to the Governor’s office to the chamber working to make this a reality,” Beaty said in an interview with The City Wire. “It wasn’t an easy process. It took a lot of effort to hold it together through the months and to eventually come up with a package that was attractive to Health Management.”
And because HMA is a company with many locations around the U.S., it did require much work and negotiation to land the project in Fort Smith, Beaty said.
“Obviously, any city in the country would like an operation like this. So they certainly had their options, and we knew that, and we worked to keep this an attractive site,” Beaty said. “I will tell you that this has gone through multiple iterations of size and form and structure. ... This project has been alive and dead three or four times.”
WELCOME NEWS
In addition to the almost 90,000 square feet, the deal also includes provisions for an adjacent 100,000-plus square feet for HMA if it needs to expand the center.
Tim Allen, president of the Fort Smith Regional Chamber of Commerce, said the HMA decision is much-needed news. Indeed, the HMA news comes about nine months after Whirlpool closed its refrigerator manufacturing plant in Fort Smith – a move that resulted in the loss of about 1,000 jobs.
“Health Managements’ decision to locate the Arkansas Regional Service Center in Fort Smith is a testament to our quality of place and workforce. The Fort Smith Chamber continues to promote this community as a great place to do business and it is.” said Tim Allen, President of the Fort Smith Regional Chamber of Commerce. “Fort Smith has had its fair share of setbacks over the last couple of years, but I believe our best days are yet to come. Health Management will be an outstanding corporate citizen to our city.”
The center is expected to provide back-office support to 27 hospitals within the 71 hospitals operated by HMA. Services provided by the center will include hospital billing, collections, insurance verification, scheduling and third-party billing support.
DECISION POINTS
HMA has more than 45,000 employes, more than 10,000 affiliated physicians and 71 hospitals located in 15 states.
The company provided the following points in explaining its decision to locate the center in Fort Smith.
• “As our company has added hospitals and other health care services, we evaluated several alternatives for the expansion of our central business office functions that supports 27 of Health Management’s hospitals. Health Management is delighted that we were able to expand our Regional Service Center into Fort Smith.
• “Efforts made by Governor Beebe’s office, FSM Redevelopment Partners, LLC (the developer), the Fort Smith Regional Chamber of Commerce and Arkansas Development Commission, combined with the Arkansas’s positive business climate, helped to convince us that Fort Smith is the right location for our growth.
• “This project qualified for the Create Rebate program.”
EXPO FUTURE
The HMA move does result in the loss of the Phoenix Expo space, which has been the location since early 2010 for numerous civic club meetings, gun shows, weddings, non-profit fundraisers, craft fairs, business expositions and other events.
In January 2009, FSM Redevelopment Partners LLC purchased the 35-acre former Phoenix Village Mall — bounded by Phoenix Avenue on the south, Towson Avenue on the east and Wheeler Avenue on the west. The once poorly-maintained site contained more than 10 acres of structures and was the first enclosed mall constructed in Arkansas.
Since that time, FSM Redevelopment Partners has invested more than $10.5 million in site improvements, with much of that to create the meeting and convention space at Phoenix Expo. The investment also resulted in bringing a Sykes call center to the north end of the mall property. The company, which now employs about 450, has operated its Fort Smith call center since mid-2011.
As to a future Expo location, Beaty is unsure.
“I have not yet determined if we will relocate the Expo center. We are evaluating that now. We hated to lose this, but in order to accommodate the client’s timeframe, we had to go with the space that was the most ready,” Beaty said.
JOBLESS RATE HELP
The HMA decision to bring 500 jobs to Fort Smith should help mitigate somewhat the region’s persistently high jobless rate and declining workforce numbers.
An increase of almost 1,300 in the number of unemployed in the Fort Smith metro countered sizeable increases in the workforce and number of employed to push the region’s jobless rate up to 8.7% in January. Unemployed persons in the region totaled an estimated 11,480 during January, above the 10,182 during December and above the 11,361 during January 2012.
January’s 8.7% estimate was well above the 8.1% in December, but just below the 8.9% in January 2012.
January was the 48th consecutive month the Fort Smith metro jobless rate has been at or above 7%, and was the second consecutive month the rate has been above 8%.
Potentially more telling of the recent economic woes is the job number drop in the past seven years. The number of employed in January 2013 was an estimated 120,058, down almost 10% compared to the high of 133,061 in June 2006.