News Analysis: Industry recruitment and expansion

This photo is of the Southwest Steel Processing major forge press completed in 2019. The press more than doubled the company’s capacity and added about 75 new jobs to the area.

As the date for the Special Election approaches, the voters of Newport have a choice to pass the part of the sales tax which supports the Newport Economic Development Commission. Over the next three weeks, the Newport Independent will focus on the role of the NEDC and the accomplishments since its creation in 2002. As I spent time with NEDC Director Jon Chadwell and the members of Moving Jackson County Forward, it became apparent that the roles and accomplishments of the commission would need to be divided into three parts; Industry Recruitment and Expansion, Job Creation and Workforce Development, and Retail Development. This week’s article will focus on industry recruitment. The goal of the articles is to allow the voters to make informed decisions on July 13. Early voting begins July 6 at the Village Mall.

In 2002, the NEDC was part of a team, which recruited Southwest Steel Processing to spend $27 million to locate their industrial plant in Newport with an agreement to create 54 new jobs. In addition to the 54 jobs, SSP in conjunction with the NEDC, the Arkansas Economic Development Commission (AEDC), the Arkansas Development Finance Authority (ADFA) and others, has expanded and is currently expanding a second time to increase job contribution to 225 jobs and spent more than $40 million in the plant since locating here.

In 2003, Medallion Foods was a small company and great community partner. The company wanted to expand. Medallion worked with the NEDC and state partners to expand, spent almost $8 million in the facility and added 140 jobs. By 2011, Medallion expanded further, spent $9 million and created another 80 to 100 jobs. The NEDC worked with Medallion to make the expansions possible. Ralcorp bought Medallion and by 2014, the wastewater treatment plant that served the facility needed upgrades. The NEDC assisted by providing a grant for a portion of the cost. Later the same year, Ralcorp decided to expand and spent close to $10 million on the facility, which created an additional 30 jobs. The facility is now owned by Shearer’s Foods and has continued to grow with over 450 jobs. As recently as 2019, the NEDC worked with the City of Newport to improve the road behind Shearer’s that had experienced a significant amount of wear and tear over the last decade.

One of the longest industrial partners for Newport and Jackson County is Arkansas Steel Associates. The NEDC has assisted ASA with infrastructure projects that have benefited the company and allowed them to grow in Newport. The NEDC worked with city and county officials to clean out ditches on Van Dyke Road to create better drainage. In addition, the NEDC worked with White River Planning and Development District to receive a major Economic Development Administration Grant. The grant allowed for construction of a new industrial access road to the plant, as well as a connecting road between Arkansas Steel and Southwest Steel, one of their larger customers. Infrastructure is an essential part of efficient operations for industry. When the City of Diaz wastewater plant, which serves several industries in the Jackson County Industrial Development Complex, needed upgrades, the NEDC assisted Diaz with a grant and a low-interest loan. These infrastructure projects helped Arkansas Steel grow to just under 300 jobs and remain a stable industrial force in the county.

Newport is home to two prisons of the Arkansas Department of Corrections. NEDC recruited Actronix, now Semah Tronix, as part of the Private Industry in Prison (PIP) program. The company employed 47 people in the McPherson Unit making wiring harnesses for electronics applications. Five of the jobs are “free-world” jobs. One of the main benefits of this program is that the inmates learn an industrial skill, which will give them employable skills upon release. The program has proven that participants are 75 percent less likely to become a repeat offender and have a much better experience reentering society after their sentence is complete.

In the area of small business, the NEDC takes a role in smaller manufacturers like What’s This Spice with seven employees and Bottomland Naturals with 16 employees. What’s This Spice was a staple of Newport and contributed to a large number of events until the passing of its owner. The smaller manufacturers are very important to job diversity in the area.

A new rail spur was constructed through a major Economic Development Administration grant for Southwest Steel Processing. An additional benefit of the construction was that the spur crossed 17 acres of land available for development. Rocky Mountain Hot Shot worked with the NEDC to construct a rail loading facility on that 17-acres which allowed them to load and ship frac sand across the United States. The facility has since sold to Newport Rail Loading Facility and continues to employ people on site and truck drivers to deliver materials from mining locations in Independence County to the facility.

In 2010, the NEDC worked with Mr. Ed Ward to help him obtain a distillery license – the first to be awarded in the state in decades. The Old Ed Ward Distillery was established and operated as a legal moonshine distillery until Mr. Ward’s passing. The license has since been purchased and is now the operation license for Postmaster Spirits, which sells their flavored vodkas across the state of Arkansas. In addition to being a small manufacturing operation, Postmaster Spirts has become a significant tourism attraction that brings numbers of people to town each week, making it one of the few businesses that operates in both of those sectors.

Unity Health purchased Harris Hospital in 2015 and had issues with stormwater drainage near the emergency room. The NEDC provided Unity a grant to allow for improvements that gave the emergency department easier access during storms. Unity Health has become a great community partner and has added a number of new jobs as well as making a huge investment in Newport’s healthcare infrastructure since acquiring the facility.

Delta Manufacturing expanded in 2015 adding 35 new employees and spending $1.4 million. The NEDC assisted Delta with local job creation grant funding and helped the company qualify for the federal New Market Tax Credit program, which made the expansion possible. Delta added jobs and increased the size of their facility becoming a stronger company in the process.

When the voters approved the measure allowing medical marijuana for Arkansas, the NEDC realized that the cultivation facilities would be job creators. The NEDC worked with 14 companies vying for a license and in the end succeeded having two of the five facilities located in Jackson County. The NEDC did not give any direct financial aid to these projects, but the staff spent a considerable amount of time working to gain these jobs. Delta Medical Cannabis company is growing in Newport and has more than 40 new high paying jobs in the community. The other company has since relocated, however, the NEDC, along with other plaintiffs, has filed a lawsuit against them for breach of promise to the community.

Newport and other towns across the United States faced a new reality when Norandal went through corporate bankruptcy. Plants across the country closed and people were laid-off. By 2018, Gränges Americas acquired Norandal’s assets. The NEDC began to work to convince Gränges that the Newport facility needed to be kept open. Newport was in a competition with a community in North Carolina to get the rolling mill facility. With the efforts of the NEDC, the Arkansas Economic Development Commission and others, Newport was successful. Newport won the project. The result was an investment of $26 million and over 100 new jobs at an average wage of $26 per hour. This created great high-paying jobs and kept the community from having an abandoned industrial facility in the area.

The NEDC just recently approved incentives to assist a new technology company in locating in Newport. The facility will initially hire 22 information technology workers and bring a $250,000 investment. These jobs will be filled by people being trained at Newport’s own Tech Depot IT Apprenticeship Center. The facility should be formally announced by August 1.

No person or organization is 100 percent successful on all of their investments. The NEDC has worked with a few companies that did not fulfill their obligations to the community. Perhaps the most well-known is America’s Choice Products, known locally as the shoe factory. While America’s Choice operated for three years in the community, they defaulted on their incentive agreement and the NEDC sued the company and won a judgement against them. Other projects have included working with some local companies, trying to assist them through difficult times. Sometimes these projects work, and the company can be saved, and sometimes, despite the best efforts of the company and the NEDC, they cannot survive. The NEDC takes the public trust placed in them very seriously. They enter contracts with every company they assist. And when a company defrauds the community, the NEDC files a lawsuit and seeks to recoup as much of the community’s investment as possible.

A number of additional companies have been recruited to Newport like MATB, which created 40 jobs and was later absorbed into Southwest Steel Processing, Specialty Sands, which worked during the height of fracking to supply sand for the natural gas industry, and White River Medical Center, which located an urgent care complex in the former Kroger building in Newport. The recruitment of new businesses and the support of our existing industries has significantly improved the quality-of-life for people in the community and allowed many to find good paying jobs with great benefits close to home, right here in Jackson County.

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