story by Michael Tilley
mtilley@thecitywire.com
Prior to the January 2009 purchase by FSM Redevelopment Partners of the crumbling former Phoenix Village Mall, Lance Beaty simply intended to generate a modest income by converting Arkansas’ first enclosed mall into warehouse space.
But a little more than four years later, the more than $10 million invested in the property has become a “job engine” that will soon be home to more than 1,000 jobs in the about 40-acre site.
Naples, Fla.-based Health Management Associates announced plans on April 4 to operate a regional service center in Fort Smith that will employ more than 500 with average annual salaries potentially exceeding $40,000.
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.
‘DEVELOPMENT ENGINE’
Those jobs will add to the about 450 at the Sykes call center also located on the Phoenix property. Other businesses located on the Phoenix property includes the Cooper Clinic Pro Med urgent care office, a regional office for AFLAC, Sebastian County Solid Waste office and several retail stores. Beaty also said there are doctors interested in leasing space in the professional office building.
“Obviously we’re pleased to have developed a project that’s been a development engine, a job engine, and helped put a thousand people to work. That’s a significant accomplishment,” Beaty said.
The former Phoenix property is second only to Chaffee Crossing in terms of jobs created. Chaffee Crossing officials say the former military base has about 1,100 jobs. However, Chaffee Crossing has benefitted from at least $100 million in tax dollars for employment incentives and infrastructure – water and sewer systems, street work, Interstate 49 work, etc. – improvements, while FSM Redevelopment Partners has only received tax support indirectly in the form of state incentives for the jobs recruited to the site.
DEVELOPMENT CHANGES
Beaty’s warehouse plan was scrapped in early 2010 when he decided to spend $4 million and renovate a part of the facility into an 80,000-square-foot meeting and expo center. With that project complete, Beaty moved to utilized the remaining almost 400,000 square feet of enclosed space. Part of that effort resulted in recruiting Sykes.
Bolstered by his role in wooing Sykes to the property, Beaty began searching for other companies to recruit to the location. That eventually resulted in the HMA deal.
Beaty is also working on other retail possibilities, but he declined to comment on details.
HMA IMPACT
Based on a basic Implan report from Gregory Hamilton, a researcher with the Institute for Economic Advancement at the University of Arkansas at Little Rock, the Phoenix property is indeed a job engine.
Hamilton’s report suggests that the 500 HMA “office administration” jobs will result in another 250 jobs in the region and around the state. The total effect of HMA bringing a 500-employee service center to Fort Smith is 760 jobs with an annual labor income of $31.154 million. (The report is preliminary and based on computer models of impact based on the type of jobs created. It was requested by The City Wire to provide an early “ballpark” estimate of the potential impact of the new HMA jobs.)
“The 500 new jobs causes other business to increase employment by approximately 124 (indirect effect) in Fort Smith and 6 jobs in the rest of the state. The gains in payrolls to the community and local expenditures derived from those payrolls causes an additional 126 jobs (induced) in Fort Smith. Another 10 jobs (induced effects ROS) are gained in the rest of the state because of this reduction at Whirlpool. The total job creation is in the state is 760 jobs,” Hamilton noted in the report.
Beaty was surprised by the impact total.
“That’s great. I didn’t realize the impact would be that much, but that makes the deal even better for the area,” Beaty said.
In addition to the HMA impact, the average annual salary of the jobs – 500 jobs at an estimate annual payroll of $21.5 million – is $43,000, considerably higher than the Fort Smith regional per capita income of $31,782, and also higher than the Arkansas per capita income average of $33,740. (The per capita figures are the most recent provided by the St. Louis branch of the Federal Reserve Bank.)
“Obviously, I had no idea we’d be this successful, so yes, I am surprised by the development here. But there is more in the works, maybe not to this (HMA) level, but there is more property here that we can develop and lease,” Beaty said.