The Latest Forecast:: Frugal

Arkansas Business
THE STATES BUSINESS NEWS AUTHORITY. UPDATED DAILY: ArkansasBusiness.com
UA Holds Firm: No Athletic Fee

Unlike the majority of their SEC peers, the Razorbacks see no need to charge a student athletic fee. [P17]
VOL. 28, NO. 31
AUGUST 1-7, 2011
$1.50
The Changing Consumer
The Latest Forecast:

New Look, Features Debut
In our new column, Exec Q&A, we chat with Entergy Arkansas CEO Hugh McDonald, above. [P38] Its among a variety of new features debuting today. [See Publishers Note, P34]
Retailers get ready for thrifty shift among shoppers

MFriedman@ABPG.com
FRUGAL
Cars
Buyers are in the drivers seat, keeping cars longer and demanding more efficiency. But if you want a low-mileage used car, youll have to get in line and be ready to pay more. [P11]
Heres How Arkansans Habits Are Changing If Theyre In The Market for ...
By Mark Friedman
The List [P21-22] The 70 Largest Farm Subsidy Recipients. Whispers [P3-5] Vertical Lofts and the Packet House
Years ago Eileen Sotomora of Little Rock would have spent a lot more than $700 on a mattress for her guest bedroom. Instead, she bought one on sale at Dillards for that price just a few weeks ago. I guess I was being thrifty, said Sotomora, who before the Great Recession paid about $3,000 on a mattress for her and her husband, Dr. Ricardo Sotomora. Meet the new consumer, who thinks its fashionable to be frugal. Still shaken by the recession, consumers are more likely to hold off spending money on discretionary items and trade down on essentials, according to the Oct. 27 report Forever Frugal? 2010 U.S. Consumer Survey Confirms Persistent Frugality by the management consulting firm Booz & Co. Still, consumers will open their wallets if they think the money is well spent. Marketing experts told Arkansas Business that consumers will buy products and services if they think they have a value and CONSUMER CONTINUED ON P12
[NEW PREMIUM AD OPPORTUNITY]
Buyers are no longer looking at their houses as the primary asset in their investment portfolio, says Little Rock real estate agent Jon Underhill They are recognizing that houses are an expense and not just an asset. [P13]
Homes
Value
RELATED: A new monthly column, On Consumers, debuts today, on our op-ed page. [P35]
Consumers are still willing to pay for goods and services in which they perceive value. Just check out Apples quarterly earnings and the excitement over the first Apple Store to open in Little Rock. [P12]
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Arkansas Business August 1, 2011
Seven-Digit Deals
Two Little Rock properties, a downtown condominium project and a former Affiliated Foods Southwest project, both generated $1 million deals. Ball & Farrar Properties LLP of Houston, led by Wesley Ball and Kyle Farrar, acquired eight units in the Vertical Lofts project near Victory and Second streets along with land where eight more units were planned. The new investors ponied up $1.35 million to make the deal happen. The seller is Vertical Development LLC, led by Matt Bell. Reiner Family II LLC, led by Robert Reiner, purchased the 84,450-SF warehouse at 3120 W. Roosevelt Road from First Security Bank of Searcy. The limited liability company is affiliated with Joshen Paper & Packaging Co. of Cuyahoga Heights, Ohio. The bank recovered the property a year ago at a $1.25 million foreclosure sale.
Vertical Lofts
Foreclosure Action A portfolio of rent houses and an 80-unit apartment complex attracted sevendigit foreclosure sales in Little Rock. One Bank & Trust of Little Rock recovered 25 houses from Mary Buchanan in a $1.2 million court-ordered transaction. The bank subsequently sold 23 of the properties for about $1 million. Buchanan filed Chapter 7 bankruptcy back in January, listing debts of more than $3 million and assets of nearly $2.3 million. HMF LLC, led by Hank Kelley, bought Fowler Square Apartments at 503 E. Sixth St. for $1.1 million. The previous owner, Fowler Square Ltd. of San Antonio, defaulted on a 1997 bond issue that originally totaled $2.2 million. Coming Soon Did you know a book is in the offing about the famed founder of Lee Wilson & Co., his family and their vast Mississippi County agri operation, subject of a recent story in Arkansas Business? The 250-page work, which
Whispers
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Arkansas Business
will soon go to print at LSU Press, is titled Delta Empire: Lee Wilson and the Transformation of Southern Agriculture. The book is penned by Jeannie Whayne, a history professor at the University of Arkansas at Fayetteville who grew up in Memphis, Lepanto (Poinsett County) and Beebe. Her nine-chapter offering will be published as part of the David Goldfield Series on the New South, named for the distinguished professor of history at the University of North Carolina at Charlotte. We sampled an early taste, and it promises to be an interesting read.
Buyer Background Our recent look at Lee
Wilson & Co. reported the sale of the 125-yearold enterprise to Gaylon Lawrence of Sikeston, Mo., and his son, Gaylon Jr. of Nashville, Tenn. The Lawrence family was already known for its extensive farm holdings, about 150,000 acres of rice and row-cropland in southeast Missouri, Mississippi, Illinois and Arkansas as well as 30,000 acres of Florida citrus groves. The Lawrences also own five community banks, in cluding two in Arkansas, Farmers Bank & Trust of Blytheville and Piggott State Bank (Clay County). The Lawrence Group made a run at buying U.S. WHISPERS CONTINUED ON PAGE 4
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August 1, 2011 Arkansas Business
WHISPERS
Packet House Redux Perhaps you noticed the sold sign on a Cantrell Road landmark in Little Rock, the 142-year-old Packet House. Did you know the change in ownership means the historic home at 1406 Cantrell Road will return as a dining destination? Betty Richards hopes to have renovation work started during the next four to six weeks and completed by spring to unveil Packet House Grill. Were getting the plans all finished up with the architect, she said. General plans for the 8,200-SF building include a full-service bar, restaurant on the first floor, banquet area on the second floor and office/storage space on the third floor. The additions of an elevator and a small patio with views of the Arkansas River are on the drawing board. This is the first restaurant venture for Richards, who owns Rich Logistics, a Little Rock trucking firm. The residence served as the home of the Packet Restaurant from 1982-88 under the lead ownership of Larry Carter. Ed Harvey converted the property to office use before losing it through foreclosure as did Carter before him.
WHISPERS CONTINUED FROM PAGE 3 Sugar Corp., an effort that reached $588 million three years ago but became mired in politics as USSC management battled to thwart the deal.
Twitter Talk Ever check out BNet.com, CBS interactive business network? We do, occasionally, and a July 7 post by contributor John Warrillow caught our attention. Warrillow listed the top seven people every entrepreneur should follow on Twitter, and the list included Barbara Taylor. Taylor is the co-founder of Synergy Business Services in Rogers and a regular New York Times small-business blogger. Of Taylor, or @SynergyBizNWA in the Twitterverse, Warrillow wrote: Her Twitter feed is a must-read for business owners who would like to sell their business one day. Death After Dinner A Louisiana woman has filed a complaint in U.S. District Court in Little Rock accusing the Dixie Cafe restaurant at 1301 Rebsamen Park Road in Little Rock of serving food that caused the death of her husband in 2009. The woman, Karen M. Sims,
from diarrhea and vomiting and eventually dying at the University of Arkansas for Medical Sciences hospital on Dec. 30, 2009, Sims said. According to the lawsuit filed July 22, the hospital records stated that Mr. Sims was most likely suffering from an overwhelming staphylococcus food poisoning and toxemia. Karen Sims is suing Dixie Restaurants Inc., doing business as Dixie Cafe, for damages incurred to her because of her husbands death, as well as for medical bills and funeral costs. A spokesman from Dixie Rest aurants, which has its corporate office in Little Rock, said the company was aware of the complaint but was unwilling to comment on it.
Translation: Power Up the Grid It didnt make it into the Exec Q&A on Page 38, but Hugh McDonald, president and CEO of Entergy Arkansas Inc., had a few words to say about the status of the power grid infrastructure in Arkansas and the U.S. Theyre words too good to leave on the cutting-room floor: The bulk power system has been called the largest, most complex machine ever built by man. Its truly a modern marvel, but in places it is nearing full capacity. Additional investments in this system will be required to continue to reliably and
claimed in her formal complaint that her husband, Sidney B. Sims, was an active and vibrant 66-year-old man when she traveled with him to Little Rock. Sims stated that she and her husband dined at Dixie Cafe on Dec.
26, 2009, where her husband ate chicken fried chicken, mashed potatoes, black eyed peas, and tea. Sidney Sims became violently ill within about two hours of eating dinner at Dixie Cafe, suffering
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WHISPERS
economically serve customers, as well as to integrate new generation resources into the grid. For Arkansas, the picture is similar. We routinely examine the capacity to move large amounts of power across the system or to obtain the benefits of new or more economic generation. As we integrate into a regional transmission organization in this case, [the Midwest Independent System Operator group] we will continue to invest in projects that maintain reliability or improve the economics of providing service to our customers.
Chemical Trouble FutureFuel Chemical Co. of Batesville said it undertook a $1.5 million capital improvement project in 2008 to fill the order for one of its customers. But after it developed the 1,000 metric tons of the chemical diethoxymethane, the customer, Lonza Inc. of Allendale, N.J., and Lonza Group Ltd. of Switzerland, only bought 60 tons of it in 2009, according to FutureFuels lawsuit in U.S. District Court. FutureFuel is suing Lonza for more than $3 million in damages in connection with the unsold inventory. FutureFuel said it never would
have moved forward with its capital improvement project if it hadnt had a 2008 letter of intent from Lonza saying it would buy the product. The lawsuit didnt say what Lonza was going to do with that supply. Lonza is a supplier to the pharmaceutical, health care and life science industries, according to the companys website. An attorney for Lonza, Charles Schlumberger of Little Rock, said the company would deny the allegations in its court filings. He declined to comment further on the case.
To the End The death last week of Little Rock philanthropist and Christmas light fanatic Jennings Osborne inspired tributes and expressions of sympathy from scores of his nearly 5,000 Facebook friends. His profile photo remained unchanged: Osborne and his daughter, Breezy, flanking a buxom Playboy bunny, in a photo taken in Las Vegas in 2008. n
Correction
The Daily Record, a law and information newspaper that covers Little Rock and central Arkansas, is published twice per week. Its publication frequency was reported incorrectly in the July 25 Outtakes column.
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Technology
New Acxiom Chief Plans Fierce Focus on Clients

By Luke Jones
LJones@ABPG.com
Wal-Mart Gives Museum $20M; Admission Free

to the museums new Next Generation Fund, which addresses the economic, social and cultural barriers that often Crystal Bridges Museum of American prevent people from participating in Art on Thursday announced that the arts. Wal-Mart Stores Inc. was giving the The arts should be an essenBentonville museum $20 million to tial part of every childs education, cover admission fees for all visitors. Arkansas First Lady Ginger Beebe The grant seeks to make admis- said in the museum release. When sion to the museum free in perpetu- Crystal Bridges opens on 11-11-11, it ity. A $10 admission fee for adults had will be an incredible resource, and been under consideration before the now it will be free to all who visit. The grant announcement, the museum outstanding art found there will said. encourage young people by expandThe Northwest Arkansas commu- ing their creativity, giving them an nity is so important to us its where invaluable outlet for self-expression, our associates live, work and play, and helping to develop greater artisWal-Mart President and CEO Mike tic literacy. Crystal Bridges Museum of American Art, spearheaded by Wal-Mart heiress Alice Walton and the Walton Family Foundation, is expected to display one of the finest collections of American art in the world when it opens on Nov. 11. In May, the foundation anCrystal Bridges Administration Building and the restaurant as nounced that it seen from the west side of the upper pond. [PHOTO SUBMITTED] was providing the museum an Duke said in a news release. We are endowment of $800 million. excited about the cultural opportuniIn addition to the cultural attracties Crystal Bridges is bringing to our tions of the museum, Crystal Bridges area and even more excited that our is expected to be a driver of economic families, friends and neighbors will development in northwest Arkansas, experience it at no cost. particularly downtown Bentonville. Don Bacigalupi, executive director Area economic development officials of Crystal Bridges, said, One of the expect the museum to attract about greatest challenges for museums today 250,000 visitors during its first year. is finding ways to remove barriers Free and open admission could conto community participation, includ- ceivably boost that total. ing admission charges. Walmart has The museum, designed by worldshown extraordinary vision and fore- renowned architect Moshe Safdie, sight in funding access to the muse- takes its name from a nearby natural um, providing all that Crystal Bridges spring. A series of pavilions around has to offer to all people at no cost. two creek-fed ponds will house gallerWe know that this gift will allow the ies, meeting and classroom spaces and museum to become a daily resource in a large glass-enclosed gathering hall. It also will include a caf and a store our community. The grant, which will be given dur- designed by Marlon Blackwell Architect ing a period of five years, is the first gift of Fayetteville. n
JCottingham@ABPG.com
Scott Howe, the new CEO of Acxiom Corp. of Little Rock, said last week that
By Jan Cottingham
one of his goals for the data services company is to have a maniacal focus on Acxioms clients. And by maniacal, he means a positive type of mania, he said. Its a good crazy, he said. Its a singular focus, an overriding focus on our clients. The 43-year-old, a former executive with Microsoft Advertising Business Groups in Seattle, said companies fit in one of two categories: those that listen to their clients and those that dont. When I was considering Acxiom, I asked someone who had recently been a client, What should the Acxiom strategy be? We really need to figure that out, Howe said. According to Howe, the client replied, You dont need to figure that out; Ill tell you what the strategy should be. Listen to clients like us. Were telling you all the time where were wanting to go. That was a powerful invitation, Howe said. He said that attitude of maniacal attention to clients doesnt necessarily represent an upheaval of company strategy. Its a revisitation of what this company is built on, he said. Acxioms hire of Howe on Wednes-
Scott Howe, Acxiom, CEO
[PHOTO BY JASON BURT]
day came after the company began in April looking for an executive with a solid digital media background who could negotiate a rapidly changing digital marketing world. But last week, Howe signaled a strategy of improvement and not a remake of the company. He said he doesnt plan to fix whats not broken, but he does hope to improve it. Howe succeeds John Meyer as chief executive. Meyer left Acxiom in March, the same time the company disclosed a non-cash impairment that contributed to a fourth-quarter loss and plans for its chief financial officer, Christopher Wolf, to also leave the company that summer. On Wednesday, Acxiom announced first-quarter earnings were up 12 percent from the same quarter last year. n
NORTHWEST ARKANSAS
Two Industry Veterans Head New Title Firm

By Paul Gatling
PGatling@NWABJ.com
A couple of industry veterans have officially opened the doors of their new headquarters in Fayetteville. Co-owners Blake Hanby and Jimmy Plumlee lead City Title & Closing LLC, which began operations on May 3 and moved into its permanent home a 2,402-SF boutique office at 1450 E. Zion Road in the Park Centre development on June 3. Hanby has worked in the title business since 1999 and was previously the president and chief executive of Waco Title Co. Plumlee brings more than 30 years of title and closing experience. Pam Weeks-Doffin and Dwayne
Flynt, both closing agents; Raney Forbes, closing processor; and Jessica Wooten, title agent, complete
the staff. The group, all of whom came from Waco Title, has a combined 114 years of experience. I think our personal service will make us stand out, said Hanby, the founder of the company. n
WEEKLY REPORT
NORTHEAST ARKANSAS
Craighead County Notes Record Revenue in July

By Mark Friedman
MFriedman@ABPG.com
Central Baptist College President Terry Kimbrow, left, and Vice President of Academic Affairs Gary McAllister, exhibit the virtual proctor that will be used by students enrolled in the new online degree programs at CBC in Conway. The virtual proctor seeks to prevent cheating during tests. [PHOTO SUBMITTED]
CENTRAL ARKANSAS
CBC to Offer Students Online Degree Programs

By Kate Knable
KKnable@ABPG.com
Craighead County has reported a record amount of revenue from its 1 percent sales tax it received in July. The $1.3 million the county generated from the tax is the most for a July, and so far the year-to-date total of $9.3 million is also a record, said Craighead County Treasurer Russell Patton III. The January through July 2010 sales and use tax revenue was $8.9 million. The county finished 2010 with $15.6 million in revenue from the tax. The previous year-to-date record through July had been $9.2 million in 2008, months before the Great Recession hit. The money the county received in July is from purchases made in May, Patton said. He wasnt sure what had caused the
revenue to rise. Patton said he thinks consumers have more confidence, and in May fuel prices were down. In addition, Jonesboro has had a number of restaurants open this year including, Red Lobster and LongHorn Steakhouse, Patton said. He said the new restaurants attract shoppers in surrounding counties to come to Jonesboro. Shoppers can get a nice meal and make a day of it, Patton said. n
Administrators at Central Baptist College in Conway have announced that the college will be offering two accredited, entirely online degree programs starting in the fall of 2011. Those programs are an associate degree in general education and a bachelors degree in leadership and ministry. CBC has offered online classes since 2005, but the 2011-2012 school year will be the first during which students can pursue fully online degrees. Online classes provide students who live in other states or countries or whose schedules prevent them from taking classes on campus with access to Central Baptist College. The Higher Learning Commission of the North Central Association of Colleges & Schools, a nationally rec-
1% Craighead County Sales and Use Tax Receipts For 1998 - 2010
$18 $16 $14
ognized accrediting agency, accredited CBCs online degree programs. Central Baptist College is a private, four-year liberal arts college. The Baptist Missionary Association of Arkansas owns and operates the school, which had 742 students enrolled in the fall of 2010. The college also announced last week that it had received a $750,000 grant from the J.E. & L.E. Mabee Foundation in Tulsa. The grant will be used toward construction of a 38,000SF academic building and to expand CBCs existing library facility. n
$12 Millions $10 $8 $10,805,659 $15,599,426

20 10
$14,476,072
$14,238,537
$11,438,894
$13,253,387
$6 $9,393,401 $4 $2 0
$12,600,317
$16,201,216
8 20 0
$11,168,635
$11,716,007
20 05
20 02
20 03
20 0
20 0
20 07
20 01
Source: Craighead County Treasurers Office
Unemployment Rates, Arkansas and U.S.

11 10 9
Percent U.S. Arkansas
Arkansas Unemployment
In his ArkansasEconomist. com blog, Michael Pakko provides some context for the recent announcement that the states unemployment rate had risen by 0.3 percentage points in June, increasing to 8.1 percent from 7.8 percent. Pakko, the economic forecaster for the state of Arkansas, writes: The Arkansas unemployment rate is now higher than it has been at any time during the recession and recovery. The household survey reported an increase in the number of unemployed by over 2,500 and a decline in the number of employed by approximately Michael Pakko 11,000. At 109,000, the number of unemployed in Arkansas is now at a new all-time high. Pakko adds, however, that the news isnt all bad. This is one of those occasions when the independent payroll survey provides a different picture than the household survey, he writes. According to the payroll report, employment was up by 2,100 in June (seasonally adjusted), with the May number revised upward slightly as well. Since the trough of February 2010, nonfarm payroll employment in Arkansas has increased by 27,600. That increase represents approximately 47% of the jobs lost from the start of the recession until February 2010. n
8 7 6 5 4
Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr 2007 20 08 2009 2010 2011
Source: Bureau of Labor Statistics
20 0
20 0
19 9
19 9
$15,150,177
$11,162,314
WEEKLY REPORT
SOUTH ARKANSAS
Jennings Osborne Dies

Philanthropist William Jennings Bryan Osborne Jr. died Wednesday from complications from heart surgery, said his friend and attorney, Bud Whetstone. Osborne, 67, had been in the hospital since an April 18 heart surgery. Whetstone said Osborne had been suffering complications from his surgery, Jennings including high blood Osborne pressure and kidney problems. He said the family had called him to the hospital Tuesday night knowing that Osbornes health was worsening. Jennings, of course, was a one of a kind, Whetstone said. In a statement, Osbornes daughter, Allison Breezy Osborne-Wingfield, thanked the state and others for their prayers while Osborne was in the hospital. My father was an amazing man who all my life showed what a big heart he had for everyone, young and old and regardless of background or wealth, she said. Sadly my fathers big heart finally gave out. But knowing my Dadoo, there will be fireworks at the gates of Heaven. We want to thank everyone from Arkansas and across the country for all their well wishes and prayers. I am deeply saddened by the news of my friend Jennings Osbornes passing, former President and Arkansas Gov. Bill Clinton said. Jennings had a big heart and gave so much to so many people throughout his extraordinary life. From personally providing holiday cheer through his light shows to helping families get back on their feet after natural disasters, Jennings capacity to give was truly awe-inspiring. He even took time to personally serve the hungry his signature BBQ, feeding thousands of Arkansans throughout the years. With the passing of Jennings Osborne, Arkansas has lost one of our highest-profile philanthropists, Gov. Mike Beebe said. While a largerthan-life public figure, Jennings was also a kind and soft-spoken man, who always shared his financial success with others. Osborne made his fortune in medical research, but was more famous for his Christmas light displays and his massive barbecues, where he often fed hundreds of people at a time. Osborne is survived by his wife, Mitzi, and his daughter. n
Murphy Oil Sells Wisconsin Refinery for $474 Million

By Luke Jones
LJones@ABPG.com
An oil refinery formerly owned by Murphy Oil Corp. was sold last week for $214 million plus the value of hydrocarbon inventory, estimated at $260 million, for a total of about $474 million.
Calumet Specialty Products Partners LP of Indianapolis,
a company with offices in El Dorado as well as Illinois, Pennsylvania, Texas, Alabama, Georgia, Missouri, New Jersey, South Carolina and Louisiana, purchased the Superior, Wis., well. The sale is expected to close later in the third or fourth quarter of 2011, a Murphy Oil press release said. We are pleased to announce the sale of our Superior refinery as we execute on our strategy to exit the
David Wood
refining business, David M. Wood, president and CEO of Murphy, said. The price realization for Superior represents fair market value for the assets and we look to redeploy the proceeds and working capital from the sales process into our upstream growth business. In 2010 Murphy announced it was retreating from the refinery industry to focus more on upstream and retail markets, citing that refineries contributed just 0.5 percent of its revenue, or about $4.2 million. The company still owns two refineries, one in Louisiana and one in Wales. n
RON TABOR
A Man of Service
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December 27, 1939 - July 22, 2011

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COVER STORY: THE CHANGING CONSUMER
11
In New Economy, Auto Dealers Are Changing More Than Tires

KKnable@ABPG.com
By Kate Knable
Despite a recession that killed dozens of dealerships and an economy that has not bounced back, Arkansas' surviving automobile retailers are adapting, altering how they do business and finding success. The problems for car dealers since 2008, the year many Americans realized they were facing a financial crisis, have been multifaceted. Scott Landers, general manager of Landers Toyota in Little Rock, said the seasonally adjusted annual rate of new car sales was close to $17 million in 2007 and 2008. The $11.8 million in projected sales for 2011 reflects consumers' continued reluctance to spend, he said. "People have been more diligent with their money since 2008," Landers said. Such diligence can be seen in consumers' interest in vehicles that are fuel-efficient, the extension of average car ownership length to seven or eight years rather than four to five, and a ballooning of used-car values, Landers said. Jeff Williams, chief financial officer of America's CarMart, the publicly traded used-car chain that has its headquarters in Bentonville and dealerships in eight states, said manufacturers have slowed new-car production, so the number of late-model used vehicles has shrunk dramatically in the past few years. "The used-car market is seeing some supply and demand imbalances, partly due to the financial crisis and Cash for Clunkers program," Williams said. "But mostly because new-car sales are reduced." The federal Cash for Clunkers program took many serviceable but fuelinefficient used cars permanently off the streets, he said. The recession has also influenced the way his cus-
Technician Dustin Mitrick places a new wheel on a used car at Landers Toyota in Little Rock. The dealership will sell the vehicle as a certified pre-owned car. [PHOTO BY MICHAEL PIRNIQUE]
tomers shop, Williams said. "Our customer base is certainly looking harder at that transaction. Before making that decision, they're being a little more cautious," he said. Chris Koster, general manager of Superior Mazda in Bentonville, said rental car companies have strongly influenced both new- and used-car sales. Companies such as Enterprise and Hertz are keeping their vehicles twice as long as they did before the recession, drastically reducing the number of used cars they introduce into the market. Koster said he has been unable to stock his used-car inventory as he once did. Starting in October, Koster saw used-car prices noticeably rise. Used- car sales, which were normally 55 to 60 percent of Superior Mazda's business, dropped to about 35 percent of the company's sales in the first quarter of this year because he simply didn't have as many used cars to sell, he said. At auctions, 1- to 2-yearold Mazdas of all styles now
sell within $1,000 of the price for the same car new, he said. Kenne Ketcheside, general manager of Smith Ford in Conway, said he wants to keep 100 used cars in stock every month, but the dealerships inventory has consistently been about 75 for the past 18 months. Further, Smith Ford now has buyers for more vehicles with between 80,000 and 100,000 miles on the odometer than in the past. The dealership previously tended to sell such cars to wholesalers, Ketcheside said. "Good used cars are harder to find and more expensive when you do find them. At the auctions we go to, they're going up monthly. As the auctions go up, so
does the estimated value or price of the used car. A 1-year-old [Ford] F-150 with 20,000 miles is worth more than it's ever been worth," Ketcheside said.
Not Hurting Although all the car dealers who talked to Arkansas Business have made changes to deal with the ongoing effects of the recession and sluggish recovery, not one thought his business had been hurt. For example, Landers Toyota overall is selling more cars since 2008, partially because there are now fewer dealers to compete with, Landers said. Some 55 dealerships have closed in the state during the past two and a
Good used cars are harder to find and more expensive when you do find them. At the auctions we go to, theyre going up monthly.
[KENNE KETCHESIDE, GENERAL MANAGER, SMITH FORD]
half years, according to Dennis Jungmeyer, executive director of the Arkansas Automobile Dealers Association. About half of those were forced to close by the bankruptcies of General Motors and Chrysler, he said. Landers Toyota has taken advantage of the demand for used cars and expanded that side of its business aggressively, seeking out used cars through TV and radio advertising, as well as soliciting for cars via letters to owners. The dealership sold 2,374 used cars in 2008 and only had a two-member used-car buying team. Since then, Landers has expanded its used-car team to six people. In 2010, the dealership sold 3,775 used cars, an increase of about 60 percent from 2008. "When we saw the recession in 2008, we had to make adjustments," Landers said. Even Landers Toyota's new-car sales have increased. The number of new cars sold in 2010 was up by about 7 percent from 2008, Landers said. "There's a greater demand for Toyotas because they last so long," Landers said. "I know I'm a little biased, but they're good cars." Koster, of Superior Mazda, said the changes his business has made include no longer buying used cars at auctions, stocking more new units of Mazda's value car, the Mazda3, and keeping more basic cars on the lot, with fewer extra features. America's Car-Mart typically keeps an inventory of 7- to 9-year-old cars, which Williams called good, basic, affordable transportation. The chain has had to raise prices to reflect the increased cost of used cars, making the more expensive resale prices around $11,000. Weve not had any issues finding cars. Were just paying more than wed like to pay for them, Williams said. Wed love to see some price decreases to help our customer out. n
12

and were spending the same amount on groceries out of a smaller take home paycheck. Even though the recession officially ended in September 2009, consumers remain skeptical and uncertain, Booz & Co. said in its October report. In Arkansas, groceries still account for 10 percent of all sales that are subject to the sales tax, Pakko said. Pakko said hes not sure what Arkansans are doing with their money that once was spent on other taxable items. He thinks they are putting more money into savings or paying off bills. Or it could mean that people are buying more groceries instead of going out to eat. Polly Martin, the president of the Arkansas Grocers & Retail Merchants Association, said her grocery members have noticed that families are buying more of the staple items and cooking at home instead of going out to eat. She also said members have reported that prepared food or readyto-bake items at grocery stores have been a hit with single consumers so they too dont have to go out to eat. The overall trends are that the recession and the habits that got formed during the recession are here to stay, Kasturi Rangan, a principal of Booz & Co., told Arkansas Business.
Clearance Sales Before the recession, consumers responded to retailers marketing incentives such as clearance sales or buy one, get one free offers, said Craig Douglass, a partner in InFocus LLC of Little Rock, a focus group research company. But not anymore, he said. Holding clearance sales says youre trying to get rid of products that did not previously move well, so the consumer perceives whats wrong with the product, Douglass said. The post-recession consumers arent necessarily re sponding to the lowest price either, said Jim Karrh, who writes the On Marketing column for Arkansas Business. So slashing prices shouldnt be the first reaction of a company, because the move could backfire, he said. Once you start cutting prices or doing deals, its almost impossible to reverse that, Karrh said.
Consumer: Wallets Stay Closed Unless Value Found

Continued From Page One the companies selling the products are trusted. The wild success of Apple Inc. is the textbook example of a company that has delivered products that consumers covet, said Tom Dougherty, CEO of business consulting firm Stealing Share of Greensboro, N.C. Why would anyone pay $499 for an iPhone 4? I know I did, he said. I went out and bought an iPad 2 when I had an iPad 1. So have other consumers. For the third quarter that ended June 25, Apple reported record quarterly revenue of $28.6 billion and record quarterly profits of $7.31 billion. During the third quarter, Apple sold 20.34 million iPhones, an increase of 142 percent over the same quarter in 2010. It also sold 9.25 million iPads during the quarter, a jump of 183 percent over the comparable quarter a year ago. Apple plans to open its first store in Arkansas at The Promenade at Chenal on Aug. 20.
New Consumer Arkansans and consumers around the country have become more frugal, said Michael Pakko, chief economist for the Institute for Economic Advancement at the University of Arkansas at Little Rock. Pakko said that in 2008 when gas prices were climbing to $4 a gallon, people complained but paid it. But when gas prices rose in 2011, Arkansans balked at the price, he said. More recently people are finding ways to cut back on their gasoline, Pakko said. Before the recession, Ar kansans spent about 6 percent of their income on groceries. During the recession, it increased to 10 percent, which suggests consumers were cutting back on other items, Pakko said. Or it could suggest that people had less income
value packaged and appropriately priced. Karrh said businesses should try to gain the trust of their customers by offering testimonials or guaranteeing the service or the product. That makes the company more trustworthy and sends the message that the company will take care of the customer if something goes wrong, he said.
Online Shopping The post-recession consumer also is doing more research on the Internet, especially for big-ticket purchases. The whole buying process has been turned on its head, Karrh said. When they walk into the showroom, they already have done their homework. He said consumers are turning to the Internet for price comparison and customer reviews on social network sites. Rangan, of Booz & Co., said he didnt think that the Internet would replace brick and mortar stores, though. Consumers still want to have the experience of touching, feeling, experiencing the product or service first hand, Rangan said. But online purchases are making strides, the Booz & Co. report said. The marketing experts said they think this value-conscious consumer behavior is here to stay. I dont see how the genie ever goes back in the bottle, Karrh said, which means its incumbent upon businesses to understand value from the consumers perspective. n
Eileen Sotomora of Little Rock, with daughter, Charli, said she searches the Internet to find deals on everything from plane tickets to shoes. [PHOTO BY MICHAEL PIRNIQUE]
What the Customer Wants What we have discussed with our clients is that they need to be learning and learning quickly more about which consumers have been transformed by the recession and how, Douglass said. Theres more emphasis on security and value and an appreciation of a simpler and less wasteful lifestyle. What the customer is looking for is trustworthiness and perceptions of value, Karrh said.
People will spend money if they think it will be well spent, he said. For example, bundling items together for a price of three for $3 or five for $5 has been a successful strategy for grocery stores, Douglass said. At Kroger you can buy 10 cans of lemonade for $10, he said. That is an example of the customer demanding more value where its not just based on price. Customers are looking for quality products,
LR Apple Store to Open Aug. 20

InArkansas.com, an Arkansas Business Publishing Group site, broke the news last week that Arkansas first Apple Store will open Aug. 20 at The Promenade at Chenal in west Little Rock. The Twittersphere got busy spreading word of the firm date for the long-awaited retail outlet, which is often cited as the exception that proves the rule for post-recession value-oriented consumers. Here are some of the comments from Facebook: Neal Moore: Now all the Apple geeks can line up and freak out over the stuff they can already buy at Apple. com. Brian D. Umberson: They need to promote this in Jonesboro, because everyone here has to go to Memphis for service and repair. Holly Williams: I love Apple everything!
Inside this Providence, R.I., Apple Store, consumers wait to buy or test the latest Apple products on a Saturday afternoon.
[PHOTO BY GWEN MORITZ]

Little Rock Homes for Sale*
2011 2010 2009 2008 2007 $1 million and up 40 49 58 44 30 $750,000$999,000 48 32 45 50 56 $500,000$749,999 86 112 101 111 104 $250,000$499,999 355 358 305 341 341 Up to $249,999 502 503 438 409 378 Total 1,031 1,054 947 955 909 % Under Contract 7.18% 6.45% 10.56% 8.37% 11.77%
13
*Homes listed for sale during mid-July in neighborhoods north of Interstate 630 and west of Interstate 430 from Hillcrest westward to Chenal Valley. Source: Cooperative Arkansas Realtors Multiple Listing Service.
Residential Market Gets New Financial Perspective

By George Waldon
George@ABPG.com
Not that long ago, many homeowners in Arkansas viewed their residence much like an investment that generated a healthy, predictable rate of return. However, that image of a jumbo certificate of deposit with four walls and a roof didnt always play out when it came time to sell. Appreciation on paper didnt necessarily correlate with sales value, as the meltdown of the financial markets flipped the playing field to a buyers market. Profits e e k i n g homebuyers discovered values that Jon Underhill once always seemed to climb could indeed fall. Adding to the bearish setting is a prevailing lack of confidence in the economy and job security. Thats the common mood encountered by Jon Underhill in his dealings with residential buyers and sellers these days. What the seller paid is of little consequence to buyers, said Underhill, who specializes in upscale homes through his Little Rock agency, Jon Underhill Real Estate. Theyre looking at the market. Buyers are no longer looking at their houses as the primary asset in their investment portfolio. They are recognizing that houses
Retailers Change With Customer Behavior

Wal-Mart Stores Inc. of Bentonville has been working with manufacturers since last year to introduce smaller unit sizes of products. It is selling single-servings of items, of say toilet paper, so [customers] dont have to buy an entire bundle, said companys spokesman Greg Rossiter. Wal-Mart made the move because it noticed its customers running out of money toward the end of the month. By selling the smaller unit items, customers can buy only enough and spend as little as possible until they get their paycheck on the first of the month, Rossiter said. Roger Collins, the CEO of Harps Food Stores Inc. of Springdale, said hes noticed that customers are using more coupons and buying more private-label items. Harps, which has 66 grocery stores in Arkansas, Missouri and Oklahoma, said the company has tried to respond to the new customers by running more price specials and occasionally offers 20 percent off meats. The moves are paying off for Harps. For the fiscal year that ended in August, sales were up 4 percent from the $500 million it had for its fiscal year that ended in 2009. Collins also said Harps is on track to have a 7 percent increase in sales for its current fiscal year. Mark Friedman
A 14,156-SF manor in west Little Rocks Valley Falls Estates neighborhood left bank ownership in a $2.15 million post-foreclosure sale early this year. The transaction represented a discount from the $2.5 million-plus investment by its original owner, Joe Blankenship. [PHOTO BY MICHAEL PIRNIQUE]
are an expense and not just an asset. And if youre going to have a big home, you have got to have money and not just borrowing ability. Gone are the generous loan programs and liberal underwriting standards that helped homebuyers push the borrowing envelope and stretch the boundaries of affordability. No income/no asset loans and stated income/
stated asset loans requiring low or no documentation on a borrower, sometimes known as liar loans, have given way to more traditional venues. Were seeing a large in crease in FHA loans, which is a shift from primarily conventional loans, said Keith Smith, senior vice president and regional manager for Regions Mortgage in Little Rock. Thats due primarily to the lower down payment
Arkansas Residential Activity

2011** 2010** Change Houses Sold* 11,190 12,595 -11.16% Home Sales $1.59 billion $1.81 billion -12.28%
*New and existing homes sold in a 43-county area. **January-June. Source: Arkansas Realtors Association.
requirements on an FHA loan. Chuck Quick, president and CEO of IberiaBank Mortgage Co. in Little Rock, said homes with floor plans of four bedrooms and three baths or more with 3,000 SF and up have fallen out of favor. Theres been a real drop in value on a lot of those houses, Quick said, as cost consciousness overshadows many borrowers. When it comes to new homes, energy-saving amenities such as tankless hot water heaters, two-stage heating and cooling systems, efficiency windows and upgraded insulation are the rage. There are stories of would-be buyers turning to apartments, Quick said. Personally, I dont see it in Arkansas. People still want to own a home. n
14

SPENDING LESS
Consumer Electronics Apparel and Shoes Nonalcoholic Beverages Health and Beauty Household Products Food at Home
31% 31 31% 31 25% 28% % 21% 28% 23% 28%
More Consumers Pick Private Label

Sales of retailers private-label items have taken off during the Great Recession. Private-label penetration has grown from 15 percent before the Great Recession to more than 18 percent of total sales in 2010, according to the Oct. 27 report Forever Frugal? 2010 U.S. Consumer Survey Confirms Persistent Frugality by the management consulting firm Booz & Co. And private-label items will continue to gain support, the report said. When the economy rebounds, we expect private label sales will remain strong and branded consumer packaged goods may find it difficult to regain their market share, the report said. Consumers have turned to private-label brands because it gives the perception of value while still branding the product, said Craig Douglass, a partner in InFocus LLC of Little Rock, a focus group research company. Dillards had done an excellent job of [promoting] private-label [items] in order to draw customers in and present a good product at a reasonable value, he said. Dillards Inc. of Little Rock doesnt release sales figures for its private-label items. But for the past several years, the sales penetration of Dillards private-label items has held steady between 22 and 24 percent. Dillards spokeswoman Julie Bull declined to comment on private-label sales. Mark Friedman
Over the past 12 months, I reduced m y expenditure in this categor y 1

53% 56% 53% 53%
On discretionary items, consumers reduced spending
2009
2010
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Arkansas essentially gets money only from students who are genuinely interested in supporting athletics. [PHOTO BY MARK WAGNER]
Razorbacks Hold Firm Against Athletic Fee

Bucking SEC Trend, Activity Fee Finds No Support at UA
By Chris Bahn Since arriving at the University of Arkansas, Athletic Director Jeff Long has found additional funding through avenues like ticket increases, a new seatlicensing plan and a multimillion-dollar media rights contract. The Razorbacks seek what Long calls new revenue streams to fund operations, and every little bit helps in the ultra-competitive Southeastern Conference. But there is one stream Long and the department wont be swimming up anytime soon. Unlike the majority of their SEC peers, the Revenue Streams Razorbacks dont Arkansas gets revenue for its athletic charge a studepartment from a number of places. dent athletic fee. Below is a breakdown of the top sources That isnt likely of revenue: to change soon, though athletic Source Total departments Ticket Sales $33.4 million across the counConference Distribution $17 million try rake in six Sponsorships & Licensing $6 million and seven figures Contributions $5 million annually by billConcessions/Merchandise $1.22 million ing the student body per credit Other $600,000 hour. I think Source: University of Arkansas its been a positive to not have the student fee in the past, said Clayton Hamilton, Arkansas associate athletic director for finance. Arkansas is in the enviable position of not needing those funds to keep its department running. While the Razorbacks could use an influx of extra cash, theyre among the exceptions in college athletics when it comes to charging student fees. Many schools competing in the NCAA need those funds to help the department operate. Some use the money to help balance the budget, while others charge the fee and still operate with a deficit. Outside the power conferences, the activity fees are widely used to fund operations. South Florida, for example, pulled in more than $13 million in activity fees during the 2009-10 fiscal year, according to the BusinessofCollegeSpor ts. com. A recent USA Today report found that only 22 of 228 Division I athletic programs operate with a balanced budget or have revenues that exceed expenditures. Arkansas is among the schools where athletics arent a drain on the bottom line for the university. There are also a handful of schools where the student fee is charged but has no real bearing on the athletic departments financial status. Consider: The University of Florida, which reported $106 million in revenue for 2010-11, still charges its student body. Kristi Dosh, a lawyer, author and blogger who focuses on sports business, has explored the fees charged by schools to students to help fund athletics. While some schools need the money, others seem to charge fees simply because they have in the past. Im surprised Arkansas doesnt charge a student fee because theyre not at the top of the list in revenues in the SEC, said Dosh, who runs BusinessofCollegeSpor ts. com. Thats an area where they could make a few mil-
Supportive Students
Whether they want to or not, students at nine of 12 Southeastern Conference schools are helping fund the athletic department. Activity or athletic fees are charged per credit hour to entire student bodies. Below is a breakdown of revenue generated by schools in the SEC through those charges. School Auburn University Miss. State University University of Georgia University of Florida University of So. Carolina University of Mississippi University of Tennessee University of Kentucky University of Alabama University of Arkansas Louisiana State University Vanderbilt University
Source: BusinessofCollegeSports.com
Revenue $5.2 million $4.0 million $3.2 million $2.5 million $2.1 million $1.8 million $1.0 million $738,194 $0 $0 $0 N/A
Percent of Budget 5.68 10.49 3.57 2.14 2.69 3.89 0.86 0.93 0.00 0.00 0.00 N/A
lion. Whats puzzling is there are schools that charge it, but dont need it. Why does Florida actually need that money? SEC schools that add the activity charge onto student bills are pulling in between $738,194 (Kentucky) and $5.2 million (Auburn). Nearly 10.5 percent of Mississippi States budget in 2009-10 came from per credit hour charges to students. Alabama, Arkansas and LSU are the only schools in the SEC that apparently received no money from student fees. Vanderbilts status is unknown because its a private school. With an enrollment of 20,000 students at Arkansas, establishing a fee would certainly be a nice boost to the bottom line. Those eight schools in the league that
have student athletic fees included in their budgets are bringing in an average of $2.5 million. Implementing student fees to add revenue to the budget would be a good bump, but the athletic administration doesnt seem to be interested in pursuing the matter. When many schools are taking money from the university and its students, the Razorbacks are actually giving $1 million annually to the school. Arkansas essentially gets money only from students who are genuinely interested in supporting athletics. Ticket packages were recently put on sale to the student body and for $65 they get entry to football games at Reynolds Razorback and War Memorial stadiums, plus basketball games. n
18
McCone
Carpenter
Sorensen
[PHOTOS OF MCCONE, CARPENTER BY SERENAH MCKAY; PHOTO OF SORENSEN BY BETH HALL]
ALWAYS
Millennials Bring Skills to Management

By Serenah McKay
SMckay@ABPG.com
Managing people is a skill that comes with experience, HR professionals say, and a lack of that experience poses a challenge for the 30-somethings and even 20-somethings moving into their first managerial positions. I see some of the struggles that young leaders have early on in those roles, said Brian Sorensen, president of the Northwest Arkansas Human Resources Association. After nearly seven years in recruiting and talent development at Tyson Foods Inc., Sorensen joined Saatchi & Saatchi X last month as talent director at its headquarters in Springdale. Ive been privileged to be in a leadership role for some time now, the 34-year-old said, but for many people my age, that opportunity is just now coming along. While younger workers bring a unique set of traits and skills to an organization, they often need some help to transition smoothly into a managerial role. Maxie Carpenter, an independent management consultant and adviser whose 27-year career with Wal-Mart Stores Inc. included serving as VP of the People & Training/Development Division, stresses the importance of formal mentoring programs, which most organizations lack. Thats because of the time commitment it places on the executives, but most millennials have never had mentors and blossom in that relationship, he said. Rachael McCone, director of leadership and organizational development at Tyson Foods Inc., suggests several ways HR professionals or those who
supervise these young managers can support them in their first leadership experience: Help them understand the why of their job why they are asked to do something, and why it is important to the overall cause of the company. Give them feedback on a regular basis so they understand how they are progressing. Help them understand they may need to demonstrate to their team how using technology can improve productivity. Continue to show them ways they can develop themselves to become strong leaders. They value this and expect the development focus, McCone said. Most importantly, help them understand what credibility looks like for the team members they lead, and help them modify their style when needed. Sorensen would like to see corporations put as much focus on supporting employee development as they do on the bottom line. Whats common among virtually all companies is its easier for people to review numbers than it is to talk about people issues, he said. The rub, he said, is that the financials are concrete and can be determined with a calculator. Theres a formula for them, but the formula for people isnt so clear. We see these things in staff meetings what percentage of time is looking at numbers, and what percentage of time is looking at people issues. And I think its largely weighted toward things like revenue and ROI and sales, all those kinds of things. I think we would be well served if we balanced that out, he said. n
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The List
Farm Subsidies Declining, Still Controversial

By Nathan Vandiver
NVandiver@ABPG.com
A season of high revenues for farmers and a political climate of budget cutting and deficit reduction have made predicting the future of farm subsidies about as certain as predicting the weather. Revenue in general, from the market, has been quite exceptional, Eric Wailes, an agricultural economist at the University of Arkansas, said. The U.S. Department of Agricultures Economic Research Service expects direct payments of government subsidies to agricultural producers to total about $10.6 billion in 2011. That would be a 12.7 percent decrease from $12.2 billion paid out in 2010. Thats something that has lawmakers considering various levels of cuts to farm subsidies. But it might miss the point of farm subsidies altogether. Its not that
farm subsidies arent needed; its that a farm safety net is whats needed, Wailes said. There are economic risks in nearly every part of the business of farming. If farmers revenues from various crops are up one year, they could be low for the next several years; thats what happened after the Federal Agriculture Improvement & Reform Act of 1996, Wailes said. There are several different types of subsidies available to farmers through the federal government. Price and income supports kick in when the price of a specific farm product like rice or soybeans drops below the loan rate for that product. These are the subsidies that arent being used right now because farm commodity prices are so high. Fixed direct payments, however, arent tied to a farmers level of production or to the price at which their products are selling and are
still being paid. Theyre more contentious right now because theyre being made in the face of almost record farm income, Wailes said. And, he said, theyre about the only payments being made right now in the whole price-and-income support system. This weeks Arkansas Business list ranks farm subsidy recipients in the state by totals received in 2010, including commodity subsidies, disaster subsidies and, in a few cases, conservation subsidies. The list also shows totals from 2009 for comparison. Counter-cyclical payments are made when the market price of a crop and the amount of fixed direct payments a farmer receives arent meeting a target price set for farmers to break even on their production costs. Various types of crop insurance are subsidized as well, but Wailes thinks crop insurance isnt as good of
a deal for Arkansas farmers as it is for those in other states. Most of the insurance programs, he said, are based on problems like drought or hail storms, things that ruin crops while they are in the growing stage. But most Arkansas crops are irrigated, reducing the risk of them drying out. Arkansas farmers concerns are more focused on the cost of production and crop prices. Some of these subsidies began during the Great Depression and have evolved over the years to deal with the instability associated with all the variables that go into farming. Farmers are susceptible to things like volatility in global food markets and weather conditions and OPEC pricing of energy, Wailes said Wailes compared the governments farm programs to the recent bailouts of the banking and auto industries. The size of farm subsidies pales in comparison,
he said. I think theres sort of a misperception out there that these are huge rip-offs of the public subsidizing highincome farmers.
The List The top recipient of subsidies in 2010, Ratio Farms of Helena, is actually a cooperative of almost 30 different farms with dozens of individual owners, according to the Environmental Working Groups research of USDA data. The EWG is a controversial group whose conclusions about farm subsidies have been disputed. No. 2 is the Deline Farms Partnership of Charleston, Mo., which farms in Phillips County as well as in Missouri, Tennessee and Illinois. Like Ratio, it is owned by more than a dozen individuals and agricultural companies. Arkansas ranks eighth among the 50 states in total subsidies over the past 15 years. n
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A SPECIAL SUPPLEMENT TO
VOL. 27, ISSUE 36
Largest Farm Subsidy Recipients Largest Farm Subsidy Recipients

Ranked by total commodity, disaster and conservation subsidies received from the U.S. Department of Agriculture in 2010 Company, City Total 2010 Subsidies 2010 Commodity Subsidies 2010 Disaster Subsidies 2010 Conservation Subsidies $1,374,946 $851,388 $658,579 $606,124 $597,689 $574,788 $569,202 $555,862 $547,284 $535,553 $520,364 $488,900 $468,478 $456,819 $431,159 $423,975 $407,758 $402,411 $382,229 $370,829 $367,670 $343,829 $340,564 $336,389 $330,410 $330,057 $328,825 $327,438 $325,643 $324,104 $323,875 $317,679 $316,951 $316,611 $316,429 $1,127,746 $782,071 $518,614 $525,698 $524,822 $454,088 $276,730 $523,312 $438,058 $421,208 $376,680 $372,449 $439,191 $348,984 $245,348 $300,504 $300,670 $362,415 $273,840 $301,168 $231,794 $343,829 $254,668 $239,828 $274,285 $253,115 $282,960 $264,497 $229,022 $259,718 $323,875 $228,366 $243,602 $238,923 $240,000 $239,749 $69,317 $139,965 $80,426 $72,867 $120,700 $292,472 $32,550 $109,226 $114,345 $66,631 $78,547 $29,287 $107,835 $185,811 $123,471 $107,088 $39,996 $108,389 $67,421 $135,876 $0 $85,896 $96,561 $56,125 $76,598 $45,865 $62,941 $95,503 $64,386 $0 $89,313 $73,349 $23,460 $76,429 $7,451 $0 $0 $0 $0 $0 $0 $0 $0 $0 $77,053 $37,904 $0 $0 $0 $0 $0 $0 $0 $2,240 $0 $0 $0 $0 $0 $344 $0 $0 $1,118 $0 $0 $0 $0 $54,228 $0
The List
21
Total 2009 Subsidies $874,666 $353,339 $0 $0 $410,172 $804,424 $429,424 $0 $766,818 $0 $582,699 $1,121,251 $469,444 $400,683 $288,089 $341,971 $231,200 $543,396 $286,581 $298,842 $307,457 $482,977 $336,270 $238,524 $448,972 $453,695 $282,780 $402,480 $317,502 $410,407 $0 $425,958 $224,968 $254,303 $226,858
1 Ratio Farms, Helena 2 Deline Farms Partnership, Charleston, MOB 3 May Farms II, Brickeys 4 Edward Schafer & Sons, Carlisle 5 Storey Farming, Marvell 6 DJCB Farm Partnership, Marvell 7 Wayne Wilkison Farms II, Wynne 8 Cureton Farm Partnership, Cash 9 Soudan Farming Co., Marianna 10 Bowman Farms Partnership, Newport 11 Brantley Farming Co., England 12 R.A. Pickens & Son Co., Pickens 13 Whiskey Creek Arkansas, Lawton, IAC 14 G.C. Farms Partnership, Augusta 15 Swift Ditch Farms Partnership, Jonesboro 16 Big-Mo Farm Partnership, Stuttgart 17 Carwell Farms Partnership, Harrisburg 18 Cottonwood Partnership, Brickeys 19 Hoard Farms, Marianna 20 Hyco Farms A Partnership, Wynne 21 Eagle Lake Farm Partnership, Newport 22 A. Pirani Partnership, Marion 23 Flying Farmers, Holly Grove 24 Stevens Farm Partnership, Dermott 25 Benwood Farms, Earle 26 Sampolesi Farms, Lake Village 27 Agri Ventures, Texarkana 28 BTC Farms, Helena 29 D&M Farms Partners, Newport 30 Holthouse Farms, Osceola 31 Zero Grade Farms, England 32 Gibbs Farming, Wynne 33 H&J Land Co., Newport 34 Bearskin Farms, Scott 35 Perkins Brothers, A Partnership, Carlisle
1 Farms located in Phillips County and Missouri, Tennessee and Illinois 2 Farms located in Jefferson and Miller counties
Researched by Gwen Moritz
Next Weeks List: Largest Commercial Property Management Firms To submit information for an upcoming list, email GMoritz@ABPG.com
22
Largest Farm Subsidy Recipients Largest Farm Subsidy Recipients

Ranked by total commodity, disaster and conservation subsidies received from the U.S. Department of Agriculture in 2010 Company, City Total 2010 Subsidies 2010 Commodity Subsidies 2010 Disaster Subsidies 2010 Conservation Subsidies $315,474 $311,784 $310,415 $308,597 $304,854 $304,294 $302,801 $300,357 $297,893 $297,713 $297,599 $297,259 $296,657 $292,810 $292,182 $285,359 $282,534 $281,877 $277,809 $276,353 $275,280 $274,169 $268,291 $262,676 $262,574 $262,484 $257,758 $254,448 $247,644 $241,604 $241,060 $221,565 $220,996 $216,522 $204,982 $220,125 $243,988 $242,558 $220,121 $230,243 $266,156 $258,959 $233,874 $228,841 $297,713 $235,574 $253,519 $266,183 $232,169 $261,999 $244,201 $245,888 $264,061 $211,372 $218,481 $232,912 $203,524 $211,271 $222,626 $260,969 $244,385 $215,739 $227,206 $209,760 $213,237 $203,330 $204,172 $205,861 $215,599 $202,907 $95,349 $67,796 $67,857 $88,476 $74,611 $38,138 $43,842 $62,530 $69,052 $0 $62,025 $43,740 $29,314 $60,641 $0 $41,158 $36,646 $17,816 $66,437 $57,872 $42,368 $70,645 $57,020 $40,050 $1,605 $18,099 $42,019 $27,242 $37,884 $28,367 $37,730 $17,393 $15,135 $923 $2,075 $0 $0 $0 $0 $0 $0 $0 $3,953 $0 $0 $0 $0 $1,160 $0 $30,183 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total 2009 Subsidies $256,873 $255,335 $239,072 $256,545 $239,532 $237,606 $0 $420,811 $227,012 $354,573 $235,794 $253,841 $247,825 $200,000 $191,835 $209,139 $204,152 $619,715 $246,986 $291,724 $233,753 $235,053 $205,601 $233,838 $127,062 $276,716 $371,019 $391,906 $227,829 $699,282 $184,096 $187,531 $431,840 $211,450 $368,569
The List
36 Eifling Farms, Grady 37 Pat H. Henderson Farms, Tucker 38 Red River Farms, Searcy 39 KDL Farms, Elaine 40 Bullock Farms Partnership, DeWitt 41 WGP Farms, Wilmot 42 Magnum Farms, Brinkley 43 Long Lake Plantation, Helena 44 Penndale Farms Partnership, Wynne 45 Victoria Partnership, Osceola 46 Lockley Brothers, Parkin 47 Leslie T. Brown Farms, Brinkley 48 Stephen & Brent Davis Farm, Cotton Plant 49 Stuckey Farms Partnership, Clarkedale 50 English Lake Partnership, TulsaB 51 High Road Farms, Wheatley 52 King Farms Partnership, Paragould 53 Vincent Farms, Crawfordsville 54 Wilson Farming Partnership, Holly Grove 55 Mound Bayou, Altheimer 56 Generation Three Partnership, Tuckerman 57 Morton Farms Partnership, DeWitt 58 Thomas Hess & Sons, Wynne 59 Yocum Farms, Dermott 60 R&M Farms, Snow Lake 61 Wright Planting Co., Carlisle 62 Henderson Land & Cattle Co, Altheimer 63 C&L Planting Group, Osceola 64 Cypert Farms, Marvell 65 CEM Partnership, Brickeys 66 Lawrence Agri, Elaine 67 Graham Farms, Marmaduke 68 Miles Brothers Farms, McGehee 69 Jett Family Farms Group, Success 70 Young & Co., Poplar Grove
Source: Environmental Working Group, using U.S. Department of Agriculture data 1 Farm located in Jefferson County
Researched by Gwen Moritz
Next Weeks List: Largest Commercial Property Management Firms To submit information for an upcoming list, email GMoritz@ABPG.com
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24
Barloworld Project Sells for $6.7 Million

A 23.5-acre trucking development in North Little Rock tipped the scales at $6.7 million. TRL Properties LLC, led by Todd Havens and Richard Vassar, bought the 68,213SF Barloworld Truck Center at 11700 Valentine Road. The seller is Mathias Shopping Centers Inc. of Springdale, led by Sam Mathias. The deal is financed with a 10-year loan of $6.09 million from Centennial Bank of Conway. The project previously was tied to a July 2005 mortgage of $6.5 million held by Bank of America in Charlotte, N.C. Mathias acquired the property for $6.6 million six years ago from Barloworld Truck Center Inc. of Memphis.
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Northpoint Purchase
Ownership of a 16,970-SF auto dealership in Sherwood shifted in a $2.5 million transaction.
Asbury Automotive Arkansas Dealership Holdings LLC of Duluth, Ga., purchased the Northpoint Mazda project at 6030 Landers Road from TFM Properties LLC and MHC Partnership, both led by Steve Humphries.
The deal is backed with a three-year loan of $408,000 from the seller. Pyramid Building acquired its namesake 10-story building for $1 million in March 2005 from CWR Farms LLC, led by Charles W. Richardson.
Vision Land
A 5.68-acre parcel in west Little Rock rang up a $500,000 transaction. Vision Land Partnership, led by Jaheon Koo and Joseph Park, purchased the property at 18208 Denny Road from The deal is financed with a three-year loan of $350,000 from BancorpSouth Bank of Tupelo, Miss. The property previously secured a December 2009 mortgage of $50,000 held by the bank. The church bought the land for $300,000 in February 2005 from Boyd and Edith Blythe.
Disciples Church of Arkansas Inc.
LocaLLy owned Since 1985
10307 Maumelle Blvd. | N. Little Rock, AR 72113 501.224.3906 | 800.687.4647 info@onltech.com | www.onltech.com
The 2-acre site was bought for $435,900 in March 1987 from Kamis Alley.
South Plaza Sale

A 13,200-SF retail project in Jacksonville is under new ownership after a $524,210 foreclosure sale. David Bush acquired the 4.19-acre South Plaza development at 1800 S. Highway 161. The deal is funded with a 30-month loan of $574,832 from First Arkansas Bank & Trust of Jacksonville. The sale follows a March judgment of more than $515,000 the bank landed against Toulson Properties, led by Rodney Toulson. The property secured a December 2006 mortgage of $400,000 and a September 2007 mortgage of $125,000 held by the bank and a February 1997 mortgage of $125,000 held by Jack and Betty Taylor and Bush Enterprises Inc., also known as Crooked Hook Inc. Toulson purchased the property for $555,000 in February 1997 from Crooked Hook and the Taylors.
Retail Location
The site for a Dollar General store in southwest Little Rock drew a $252,000 sale. PB General Holdings Baseline LLC, led by Scott Proctor, acquired the 0.9-acre location at the southeast corner of Baseline Road and Sunset Lane from the John A. Mattingly & Edna B. Mattingly Joint Revocable Trust, Michael Mattingly and Felton Mattingly. Construction is backed with a fiveyear loan of $864,000 from Summit Bank of Arkadelphia. The Mattingly family purchased the property for $1,350 in April 1953 from Earl and Adele Owens.
Pyramid Space
A 3,400-SF piece of downtown Little Rocks Pyramid Building sold for $510,000. TSM Properties LLC, led by Stephen Maxwell, bought the first-floor space at 221 W. Second St. The seller is Pyramid Building LLC, led by Barbara Yates.
Heritage Park Home

A 4,994-SF home in North Little Rocks Heritage Park neighborhood changed hands in a $588,000 deal. David and Heather Gerson bought the house from James and Amy Darcey. The deal is funded with a 30-year loan of
REAL DEALS
$417,000 from Centennial Bank. The residence previously was linked with a September 2004 loan of $492,000 from Pulaski Mortgage Co. of Little Rock and a January 2008 loan of $170,000 from North Little Rocks National Bank of Arkansas. The property was acquired for $615,000 nearly seven years ago from James and Janice Goodwin.
25
Seven-Digit Construction
Travel Stop $3,800,000 11700 Interstate 30, Little Rock Contractor: W.H. Bass Inc., Duluth, Ga. New Bulk Fertilizer Storage $2,427,707 9001 Lindsey Road, Little Rock Contractor: CHS Inc., Inver Grove Heights, Minn. New Child Health Management Services Facility $1,300,235 5 Remington Cove, Little Rock Contractor: EWI Inc., Russellville Remodel Benedict House $1,272,000 5323 H St., Little Rock Contractor: Flynco Inc., Little Rock Remodel office-warehouse $1,150,000 1115 W. Third St., Little Rock Contractor: Dave Grundfest Co., Little Rock
ty for $50,000 in May 1991 from Michael and Rhonda Cloyd.
Staley Funding
A contracting firm in south Little Rock landed an $8 million funding agreement. Staley Inc., led by Greg OGary, received the five-year loan from Bank of America. The 1.2-acre development at 3400 J.E. Davis Drive previously was linked with a November 2006 mortgage of $5.5 million held by the bank. The corporation bought the site for $40,000 in July 1987 from D&H Construction Co., led by Keith Jackson.
man, $450,000 in September 1985; Jimmy and Judy Heavrin, $45,000 in November 1980; Lorenz and Pegge Jo Merkel, $28,000 in February 1984; Dorothy Atchley, $25,000 in September 1991; Clara Ketcher, $18,000 in October 1985; Julia McDaniel, $15,000 in June 1981; Inez Treadway Cole, $15,000 in June 1987; and E.L. and Olarene Sowell,
Witry Court Abode

A 4,850-SF home in the Witry Court neighborhood of west Little Rocks Chenal Valley development sold for $573,000. Anjay and Cathleen Khandelwal purchased the house from Walter and Beth McReynolds. The deal is backed with a one-year loan of $541,604 from Riverside Bank of Sparkman (Dallas County). The residence previously was tied to a June 2008 mortgage of $156,960 from Wells Fargo Bank of Des Moines, Iowa. The McReynolds family bought the property for $490,000 in May 2003 from Lewis Home Builders Inc., led by Jon Lewis.
Wortman Financing
Two Little Rock enterprises are backed with a $4.6 million financial package. Kaufman Lumber Co. and MSI Holding Co., led by Steve Wortman, obtained the loan from First Security Bank of Searcy. The Kaufman Lumber facility at 5100 Asher Ave., the Arkansas Sash & Door project at 2511 W. Seventh St. and 17.5 acres zoned for residential development in west Little Rock previously were tied to a May 2009 mortgage of $4.6 million held by Centennial Bank. The 4.2-acre Kaufman property was assembled in eight buys totaling more than $605,000. The sellers were Joe and Mary Kauf-
$10,000 in December 1988. The 3.3-acre Arkansas Sash & Door development was acquired for $344,000 in August 1998 from Monarch Mill & Lumber Co., led by Darlene Carvin. The residential land near 4200 S. Shackleford Road was part of a 30-acre tract purchased for $600,000 in October 1999 from Atley and Betty Davis.
Golden Mortgage
The owner of a 14,000-SF commercial project in Maumelle picked up a $593,097 mortgage. Golden Group Inc., led by Jim and Helen Im, got the three-year loan from BancorpSouth Bank of Tupelo, Miss. The 1.05-acre Maumelle Corners development at 301 Millwood Circle previously was linked with a March 2005 mortgage of $812,000 held by Pulaski Bank & Trust of Little Rock. The property was bought for $1.05 million more than six years ago from Holcombe-Wilson Partnership, led by Robert Wilson. n
Maumelle Residence
A 6,250-SF home in the Maumelle Club Manor neighborhood rang up a $518,000 transaction.
Velimir and Min Petrovic acquired the house from David and Mary Gulley. The deal is financed with a 15-year loan of $414,000 from Bank of Little Rock Mortgage Corp.
The Gulleys purchased the proper-
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26
KARN Accused of Fraud for Weak Signal

Citadel Broadcasting Co., owner of KARN-AM 920 in Little Rock, is fac-
ing a lawsuit for alleged fraud and deceptive trade practice in Pulaski County Circuit Court for failing to tell advertisers that its broadcast area has shrunk because of damage to its transmitter. Custom Satellite Solutions Inc. of Little Rock, a satellite television service reseller, initiated the lawsuit July 14. Little Rock attorney Bruce McMath, who is representing Custom Satellite in the lawsuit, told Outtakes that KARNs transmitting tower was damaged in early October and that its transmission power had dropped from 50,000 watts to only 2,500 watts. KARN did not notify its advertisers of the drastic reduction in service, McMath said, so Custom Satellite continued to pay for advertising that it believed was being broadcast to a larger audience at 50,000 watts. A postal employee alerted Custom Satellite to the fact that, in many places, KARN was no longer on the air, McMath said.
implied and also because he wasnt informed of the fact that they went off the air. So were asking for both types of damages, lost business and recompense for lost services they didnt render, and punitive damages, McMath said. The damaged tower was not repaired to full 50,000-watt capacity until this summer, he said. Cindy Thompson, KARN manager, did not return telephone calls seeking comment.
Branding Little Rock

The Little Rock Convention & Visitors Bureau is taking steps toward developing a new brand for Little Rock as a convention, economic development and tourism destination. In June the bureau began advertising a request for qualifications for ad agencies as part of the branding initiative, and accepted sealed responses from companies through last Wednesday afternoon. According to the RFQ, the bureau was extending an invitation to professionals to submit qualification information of their expertise in the development and implementation of a results-oriented destination brand and competitive strategy for the brand. No dollar value has yet been assigned to the contract, according
Outtakes Kate Knable

KKnable@ABPG.com
McMaths client paid for advertising from October through December while getting reduced broadcasting, he said. Custom Satellite is suing for more than $75,000 in compensation for being overcharged for service, plus punitive damages and legal expenses. Our claim is for the value of the bills he paid, for which he didnt actually get the services which were
to Leisa Pulliam, chief financial officer for the LRCVB. She said the bureau is currently tackling the creative part of making a brand for the city. A committee, overseen by bureau CEO and President Gretchen Hall, will review submitted proposals and select a company with which to work. Next, a budget and timeline for the project will be determined and the initiative will be marketed and implemented, Pulliam said. Hall said feedback from Little Rock guests has shown that many visitors dont expect much from the city because they know so little about it. Weve also heard a lot from our stakeholders, saying that they dont feel like Little Rock has one unified brand that we can all buy into, she said. LRCVB is not hiring an advertising agency of record for long-term marketing work, but an agency to handle this project, she said. The goal is a brand our stakeholders can buy into, that resonates with vistors and tells Little Rocks story, Hall said. Eight agencies responded to the RFQ by the deadline and will be considered for taking on the project. They are Advantage Communications, Aristotle, Eric Rob & Isaac , GWL Advertising , Mangan Holcomb Partners, Stone Ward and Thoma Thoma, all of Little Rock, and Wanderlust of Troy, N.Y. n
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28
Lawsuits Continue Over Fort Smith Medical Center

In July 2008, a sinkhole halted a $13.3 million expansion project at the River Valley Musculoskeletal Center in Fort Smith. As of last week, the project remains uncompleted as the former owners and the engineering firm battle one another in court over liens and who was responsible for causing the sinkhole. St. Edward Mercy, which bought RVMC in February for an undisclosed price, is working with doctors and evaluating the facility to see how it can best suit physician and community needs, said St. Edward Mercy spokeswoman Laura Keep in an email response to questions from Arkansas Business. In the meantime, two separate lawsuits are moving forward over the failed construction project. In the most recent development, the former owners, Phoenix Health LLC and IPF LLC of Fort Smith, sued the engineering and construction firm Erdman Architecture & Engineering Co. of Madison, Wis., and its subcontractor, Otis Elevator Co. of Farmington, Conn., seeking damages of more than $3 million for allegedly causing the sinkhole. Erdmans attorney, Russell Atchley of Fayetteville, declined to comment on the case. Otis attorney, Andrew Vines of Little Rock, was unavailable for comment. Erdman first sued Phoenixs related entity, Phoenix Land & Acquisition LLC, in March 2010 and alleged it owed $2.7 million for the work it did on the project but was never paid. Phoenix denied that it owed Erdman the money and filed a counterclaim and alleged breach of contract and negligence. Erdman then asked that the case be moved to arbitration. A judge denied the request in July 2010, and Erdman has appealed the ruling to the U.S. Court of Appeals for the 8th Circuit, where it is pending. On April 19, Phoenix filed its own lawsuit against Erdman in U.S. District Court over the project. The construction job called for a three-floor addition to the 23,000-
Arkansas Business
Health Care Mark Friedman
MFriedman@APBG.com
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SF ambulatory surgery center at the RVMC campus. The construction contract was signed Dec. 11, 2007, and the project was supposed to be completed a year later. In July 2008, construction workers hit an abandoned mineshaft, which caused a sinkhole on the Project and which ultimately resulted in damages to significant amounts of work that had previously been completed and paid for as well as to other property of the Phoenix Group, Phoenixs lawsuit said. Phoenix said that because the project wasnt completed, a deal with an unnamed corporate partner also collapsed and no adequate financing for the project was available.
Fresh From the Farm

You can find this weeks list of the Largest Agricultural Subsidy Recipients at ArkansasBusiness.com/Lists.
Most Read Stories of the Week

ArkansasBusiness.coms most popular stories for the week ending July 27: 1. JENNINGS OSBORNE DIES AFTER HEART SURGERY Philanthropist died from complications after heart surgery. He was 67. 2. RIDGE AT CHENAL SITE BOUGHT FOR $2.6 MILLION 312-unit apartment project in west Little Rock is under construction. 3. KUM & GO TO BUILD 3 NEW CENTRAL ARKANSAS STORES Up to 25 new stores planned in next five years. Could employ 150. 4. REP. MIKE ROSS WONT SEEK RE-ELECTION Democratic congressman may have eye on 2014 governors race.
Jennings Osborne
Meet The New Boss

Acxiom Corp. of Little Rock named Scott Howe, a former Microsoft Advertising Business Groups vice president, as its new president and CEO. The 43-year-old oversaw many of Microsofts products for advertisers, including an integrated ad network unit called Microsoft Media Network. To learn more about Acxioms third CEO, go to ArkansasBusiness.com/ScottHowe and see the story on Page 6.
Scott Howe
Murfreesboro Hospital Still Cant Find Doctors

Pike County Memorial Hospital in Murfreesboro has remained closed since November 2009 because it cant find doctors willing to work there. New Directions Health System of Louisville, Ky., bought the 32-bed hospital from the county for $2 million in September 2010 and projected it would be open in about two months. But the hospital hasnt been able to attract physicians. Physicians are our biggest problem, said Karen Voan, human resources director for the hospital. She said that doctors dont want to come to a small hospital that has been closed. At least one doctor has agreed to work at the hospital, but Voan said she needs to hire one or two more to staff it. She hopes the hospital will be open in a few months. n
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Wonders Never Cease

Innovate Arkansas works with new, technology-based entrepreneurs to turn inventions and high-tech concepts into viable businesses. Learn more about how businesses are creating high-paying Arkansas jobs in the knowledge, technology, and informationbased industries. Check out the INOV8 Blog, exploring the latest in news and trends. Learn more about Innovate Arkansas at InnovateArkansas.com.
Soire People & Profiles

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River Valley Musculoskeletal Center of Fort Smith sits on a 17-acre campus and features a 50,000-SF medical office building. [PHOTO SUBMITTED]
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30
BRES Advisors Looks to Fill REO Analytics Niche

ay Ledbetter needed a product that wasnt available, so like any good entrepreneur, he went out and created it himself. In 2009, Ledbetter formed BRES Advisors in Santa Ana, Calif., in response to the real estate market collapse. The firms first product provides real estate investment analytics. Ledbetter says REOlytics is the first automated REO decision management tool that provides sophisticated analytics in a low-cost, easy-to-use, webJay Ledbetter based application. While many of us 40-somethings associate REO with the band that rocked FM radio and venues such as Little Rocks Barton Coliseum in the late 70s and early 80s, those in the real estate game know it stands for real estate owned and refers to a class of property typically owned by a bank or other lender, or perhaps even a government agency. When the housing bubble burst in 2008 or so, depending on location, Ledbetter knew the game had changed. It was apparent that the 30-year paradigm of long-term market growth and stability had given way to volatility and uncertainty for the future, he said. I was attempting to purchase REO properties, but the bid/ask spread was too wide. Ledbetter said he began to look for analytical tools based on asset market behavior to better predict how he should buy and sell properties in the new market. Unable to find what he deemed a suitable software product, Ledbetter brought together a group of former colleagues and decided to build one himself. BRES Advisors was formed, and REOlytics was born. Ledbetter boasts 30-plus years of experience
Innovate Arkansas Mark Carter

MCarter@ABPG.com
in the industry, having previously served as co-president of Mission Hills Mortgage bankers and executive vice president of production for Guaranty Residential Lending in California. I built this product with a personal investment of $2 million plus a two-year investment of time, he said. Although there are many software products on the market serving the real-estate market, REOlytics stands alone by providing predictive pricing for the residential property market. BRES plans to use industry-recognized marketing data sources and its own proprietary mathematical model to provide financial predictions for bank-owned properties down to the sub ZIP code level. Ledbetter said bank-owned properties can easily be picked off by buyers having local market knowledge of underpriced assets. A recent three-month case study for a major financial institution showed they had underpriced their REOs by at least $10 million and lost another $8 million in properties they sold which were ultimately flipped by the buyers for additional, substantial profit within the next
few months after purchase, he said. The REOlytics system can help institutional property owners effectively forecast the best way to sell their properties and determine the best selling price, he said. In todays distressed property environment, REOlytics will enable the liquidation of the bank-owned properties with minimized losses to their shareholders and taxpayers, Ledbetter said. Introducing a new product to the real estate market in the midst of a banking crisis was challenging, Ledbetter acknowledged. Defaults have risen 10-fold and the system is overwhelmed, he said. Government bailouts and failed modification programs have had potential clients coping with everchanging rules, he said. Ledbetter believes his firm is poised to fill a niche. The company is in the user-acceptance testing phase of its system with data from four institutions. Ledbetter said the firm had demonstrated substantial increases in projected income. BRES is expanding into Arkansas. Ledbetters parents were sixth-generation Arkansans, and hes excited to get back to his roots. The firm is working with Innovate Arkansas to get established in northwest Arkansas. Ledbetter wants to move BRES to a post-development sales and delivery phase, he said, and Arkansas represents a good place to do that for reasons other than family ties. Its important to be located in an environment, such as Arkansas, where the pool of talent is readily available, the business community wants to grow and support innovative ideas, and the investment community supports the contributions a startup can make to the overall economic health of the state economy. BRES recently received approval of its first funding round. Expansion plans include an Arkansas Operations Center as soon as it acquires its first client. n A monthly look at clients of Innovate Arkansas, which sponsors this feature in partnership with Arkansas Business Publishing Group.
Innovation Briefs
Whats Playing in the INOV8 Blog A peek at the latest posts Techpreneurship: The Real Shark Tank So you think building that dream company and raising that first real round of venture funding is tough? Try this gutcheck out for size: Age: 61 Task: Swim from Havana to Key West, 103 miles in 60 hours. Risks: Sharks, jellyfish, weather, hypothermia death. Experience: Tried it in 1978 and failed due to 3-foot waves. So who would be crazy enough to do such a thing? Possibly the greatest endurance swimmer of all time, Diana Nyad. At age 61, she decided unfinished business remained. Her greatest moments may well be in the endurance swimming glories of the past, but Diana refuses to give up. Her tenacity apparently has no expiration date. Gone in 60 Seconds Pitch Contest Is Thursday NWA entrepreneurs looking for a chance to network with peers and potential investors, and perhaps create a spark that leads to a deal, need to hop on board Jeff Amerines latest train. Once it pulls into the station, it could be Gone in 60 Seconds. Amerine IAs esteemed Techpreneur is teaming with the growing Northwest Arkansas Entrepreneurship Alliance to launch an elevator pitch contest for existing and aspiring local startups. The event is modeled after the pitch competition at the Donald W. Reynolds Governors Cup. IA client Sumotext will be involved in the voting-by-text. But this time, pitchmen will have just 60 seconds in which to sell their venture. The event will take place on Thursday, Aug. 4, at 6 p.m. at Buck Nekkid BBQ in Fayetteville. Check out the full posts and more at Blog.InnovateArkansas.org.
New Patents in Arkansas

Description Bra saver device Spring action paintball marker Inventor Beverly A. Riley, Gravette Steve Williams, Lowell; Cole Krebs, Tega Cay, S.C.; and Ho Bun Choi, Hong Kong System and method for motion-based Craig Pair, Central City, control of electronic devices and Michael Kaelin, Fort Smith Assignee Same Kee Action Sports LLC, Sewell, N.J. Hi-Tech Products Inc., Fort Smith Patent No. Date Awarded 7976357 12-Jul-11 7975683 12-Jul-11 7983840 19-Jul-11
See full list of Arkansas patents at Innovation.ArkansasBusiness.com/Resources/US-patents

Source: U.S. Patent and Trademark Office
Get more innovation tools, news and resources at InnovateArkansas.org, a program of the Arkansas Economic Development Commission and Winrock International in partnership with ArkansasBusiness.com. Become a client Clients get help on developing business plans, finding a market, assisting with commercialization strategies and much more. Get news on Arkansas innovation Keep up with the latest advancements. Get news articles and research papers on innovation in Arkansas. Connect Sign up for our Innovate Arkansas enewsletter.
33
Ventures
Submit story ideas to Arkansasbusiness.com/Submit_Contact.asp
Arkansas Business
New Business
4x4 Offroad Outfitters Opens in NLR, Seeing Sales Success

By Nathan Vandiver
NVandiver@ABPG.com
New Business
Business Brokerage Franchise Starts Up

By Nathan Vandiver
NVandiver@ABPG.com
Selling a business requires discretion and direction. Thats what Charles M. Barnes wanted to provide to entrepreneurs when he started his Arkansas franchise of Capital Business Solutions. Our goal is to help people find their purpose in life and fulfill their dreams, Barnes said of his recently opened franchise of Capital Business Solutions Arkansas. Capital Business Solutions Arkansas is a business broker. If you have one [a business] for sale, Im going to try to find a buyer for it, Barnes said. His business can also provide consulting for businesses that are starting from the ground up. He offers advice on federal Small Business Administration loans and creating business plans. Mostly though, Barnes company sells businesses. Its a lot like selling real estate, he said, except you cant have an open house at a business. Thats where discretion
Capital Business Solutions Arkansas LLC Owner: Charles M. Barnes Address: P.O. Box 95308, North Little Rock 72190 Phone: (501) 590-4708 Fax: (501) 353-1592 Hours: Call any time Website: CapitalBBW.com Email: CBarnes@CapitalBBW.comStartup: April 1
comes in. Barnes tries to broker the sale without alerting the companys customers or employees. There might be a time when, say, a business owner contacts us and I meet them strictly far away from their business, he said. Barnes has been consulting and advising business owners for the past 18 years, and he knows the market, he said. A business broker can get 30 to 50 percent more than if the business owner tried to sell it himself, he said. I just love seeing people start businesses; I love seeing people being passionate about fulfilling their dreams. The most frustrating thing to me is watching someone not happy doing what theyre doing, Barnes said. n
Brad Homesley is an offroad driving enthusiast who turned his hobby into a business, helping people turn their Jeeps and trucks into capable off-road vehicles. Homesley opened 4x4 Offroad Outfitters this spring in North Little Rock and, he said, business has been great so far. He hasnt done any advertising. People have learned about his business through word of mouth, seeing it as they drive by on U.S. Highway 167 and on its Facebook page. Now that 4x4 Offroad Outfitters has been open for a few months, Homesley said, hes been able to see some trends. Lift kits and leveling kits are the two most popular items and, he said, those sales have led to sales of other products. People are lifting and leveling trucks in order to get a better stance a little bit taller stance and at the same time then they want a taller tire to go along with it,
4x4 Offroad Outfitters owner Brad Homesley.
PHOTO BY STEPHANIE DUNN
and so were selling a lot of wheel and tire packages as well, he said. Homesleys new business has been a big investment, especially in time. He quit a full-time job in order to have the time to figure out what equipment he needed and set up accounts with suppliers before he opened. He has three full-time employees. One of the best things Homesley said he did before he opened his business was talk to others who had opened businesses. Definitely, if someone is opening a busi-
ness for the first time, find somebody that has gone through the process, he said. That way you wont miss any steps of the process, he said. n
4x4 Offroad Outfitters Inc. Owner: Brad Homesley Address: 5039 Warden Road, North Little Rock 72116 Phone: (501) 414-8242 Hours: Mon.-Fri., 9 a.m.-6 p.m.; Sat., 9 a.m.-1 p.m. Website: 4x4OffroadOutfitters.com Email: Brad@4x4OffroadOutfitters.com Startup: April 18
New Service
Shiloh Technologies Goes Full Service With DSR

Shiloh Technologies of Rogers is entering the fullservice software market with its flagship demand signal repository software. Demand signal repository software, or DSR, helps retailers monitor which products
are selling and when they are leaving the store. Even for a small store, the data storage requirement can be daunting, so Shiloh has introduced Shiloh-as-a-Service, a cloud computing option. Shiloh described its new
software-as-a-service product as a natural extension of its business and said it could free up valuable work time for its customers. For further information visit ShilohTech.com or call (479) 464-4598. n
Business Calendar: The Week Ahead

Tuesday
Aug. 2
MORE ON THE WEB:
For additional calendar items, or to submit items: www.ArkansasBusiness.com/calendar
Wednesday
Aug. 3
Thursday
Aug. 4
Friday
Aug. 5
Saturday
Aug. 6
Sunday
Aug. 7
Monday
Aug. 8
How to Write a Business Plan. 1-4 p.m. Reynolds Business Center, UALR, 2801 S. University Ave., Suite 251, Little Rock. $35. For more info: (501) 683-7700
Legacies & Lunch. George Lankford on Civil War. Noon. Darragh Center, CALS Main Branch, 100 S. Rock St. Free; bring lunch. For more info: (501) 913-3000 SBA Loan Programs. 1-3 p.m. Reynolds Business Center, UALR, 2801 S. University Ave., Suite 251, Little Rock. $10. For more info: (501) 683-7700
First Steps to Video Marketing. 1-4 p.m. Reynolds Business Center, UALR, 2801 S. University Ave., Suite 251, Little Rock. $40. For more info: (501) 683-7700
Step Up to Leadership: Dale Carnegie Seminar. 8:30 a.m.-5 p.m. UA Global Campus, 3300 Market St., Suite 402, Rogers. For more info: (501) 224-5000 Windstream Corp.: Earnings release before market opens, conference call at 7:30 a.m. Call: (877) 374-3977, conference ID 83896506
Have an event that should be on our calendar? Submit items: ArkansasBusiness.com/ calendar
Argenta Restaurant Week. Lunch and dinner. Argenta Arts District, North Little Rock. $8 lunch, $25 dinner (prix fixe menus). For more info: ArgentaRestaurantWeek. com
Food, Inc. screening. 6-8 p.m. William F. Laman Public Library, 2801 Orange St. North Little Rock. Free. For more info: (501) 758-1720
34
$20 Million And the Gift Of Art for All

EDITORIAL
hen we learned of WalMarts $20 million donation to Crystal Bridges Museum of American Art to provide free admission to all-comers, we experienced a reaction rare in the new business: We got goose-bumps. Other museums in the United States for example, the Smithsonian Museums offer free admission, but in our experience the practice is rare and the Smithsonian is supported by taxpayer dollars. Wal-Mart Stores Inc. and the Waltons are polarizing figures for some, even in the effort to create in Arkansas a museum of American masterworks. The very fact that the institution will be located in Bentonville flyover country has puzzled some in the art world, mostly those on the coasts. Weve about given up on being surprised by the provincialism found in the biggest of cities.
Views
Arkansas Business Opinion Page
Arkansas Business
New Look, Added Features, Same Trusted Brand
The criticism of holders of vast wealth who seek to put that wealth to public use is nothing new. But we find it difficult to fault the desire of Alice Walton, the museums champion, and the Walton Family Foundation to present to the people of Arkansas and the world whats likely to be an exceptional cultural experience enhanced by our states natural beauty. The treasures to be displayed by Crystal Bridges may, in fact, belong to the Walton-funded museum. However, by seeking to make the museum accessible to as many people as possible, the Waltons have indicated that this repository of many of the greatest American artworks belongs, in spirit, to all Americans. Time will be the best judge of the Waltons and their legacy, as it is for all of us. In between now and the hereafter, we thank them for their great and generous gift. n
STAFF DIRECTORY
President & Publisher Jeff Hankins Associate Publisher Chip Taulbee Editor Gwen Moritz Art Director Wayne DePriest EDITORIAL Managing Editor Jan Cottingham Interactive Editor Lance Turner Senior Editors SPECIAL PUBLICATIONS Consumer Publications Editors
Amanda Hoelzeman, Lindsay Irvin

Assistant Editor, Soire
Caroline Damron
Database Administrator
ADMINISTRATION Accounting Manager Hal Lammey Accounting Assistant Kim Clark Human Resources Bill Page Executive Assistant Christine Harris
Alex Graham
Senior Account Executives
Tasha Battle, Betsy Torti

Account Executives
Mark Friedman, George Waldon

Assistant Editors
Luke Jones, Kate Knable

Business Publications Editor
Michelle Brand, Luci Deere, Katie Fortenberry, Brandy Hubener, Deborah Johnson, Rachael Lukemire, Jamie Mabry, Leigh Walker
DESIGN Production Manager Tona Jolly Senior Art Director Irene Forbes Art Directors
Chairman & CEO
Bill Paddack
ArkansasSports360.com Editor
Olivia Myers Farrell

President & Publisher
Chris Bahn
InArkansas.com Editor Karen Martin Assistant Internet Editors
Jeff Hankins
Chief Operating Officer
Chuck Ballard
Chief Information Officer
Tre Baker, Mark Carter

Researcher Roxanne Jones Editorial Intern Nathan Vandiver SALES & MARKETING Vice President of Business Sales
Paula Cigainero, Amber Hatchett-Brewer, Waynette Traub

Advertising Art Directors
Brent Birch
Soire Publisher & Editor
Marcus Boyce, Tanner Huffman, Dean Wheeler

Digital Operations Specialist
Becki Moore
Associate Publishers
Bonnie Jacoby
Senior Account Executives
Rebekah Eveland
CIRCULATION Circulation Manager Dana Meyer Circulation Coordinator Cara Gieringer FLEX360 WEBSITE DEVELOPMENT Director Brent Birch Interactive Marketing Director
Rachel Bradbury, Jennifer C. Pyron, Mandy Richardson, Chip Taulbee

Interactive Editor
Lance Turner
Rosemary Bruton, Rebecca Patton

Account Executives
Greg Churan, Graham Cobb, Neil Gray

Advertising Coordinators
Bekah Caraway, Kristen Heldenbrand, Alissa Mathews

Events & Marketing Director
Susan Cohen
Events & Marketing Coordinator
Megan Knight
Interactive Creative Director Mike Ortega Senior Web Designer Lance Corder Senior Web Developers
122 E. Second St. Little Rock, AR 72201

(501) 372-1443 Fax: (501) 375-7933 ArkansasBusiness.com www.abpg.com
l
Levi Wolters
Marketing Assistant Denise Brockinton Advertising Assistant Stacy Levy
Alex Chalupka, Chris Earls, Jonathan Peoples Interactive Traffic Manager Zack Hill
Copyright 2011 Arkansas Business Limited Partnership
ny strong business reviews and updates its brand presence from time to time, and Arkansas Business is no exception. For the past 18 months, as part of our 25th anniversary celebration, we have been surveying our readers and planning changes that will enhance the ways you experience Arkansas Business. These include our logo, print edition, website and mobile products. We started with our core delivery channel: the Arkansas Business print edition. While daily newspaper circulation tumbles and television audiences become more fragmented, Im pleased to report our paid circulation remains higher than it was five years ago. We remain committed to a strong print publication full of informative, interesting and insightful content presented with modern design. This edition marks the debut of our design and content improvements. Some of the enhancements include: New editorial features: Ventures, covering not only new businesses in the state but other developments like new products, services and locations; Exec Q&A, a weekly conversation with an insightful local business executive; Weekly Report, including news, trends and analysis of the weeks most important business stories with an emphasis on providing around-the-state coverage; and more. Easier-to-read typefaces for headlines, charts and other elements, and a slightly larger font for story text. (Im finally old enough to appreciate this more.) With certain stories, quick summaries of advice from business leaders. These and other devices will make the paper more appealing and useful to busy readers in particular. Additional, innovative opportunities for advertisers, including special and exclusive positioning and creative ad formats. This includes a premium front-page ad position like many other print publications have adopted. Our survey showed that certain Arkansas Business mainstay features remain as popular as ever: Whispers, Real Deals, Movers & Shakers, statewide business lists and in-depth cover stories. These naturally remain, as will our commitment to timely, original and relevant business news reporting. This is the first overall redesign of the publication since I arrived, then as editor, in 1993, but the look has certainly evolved with the addition of multiple cover stories, use of full color throughout the publication and an upgrade in paper. We engaged the services of Ron Reason of Chicago, an internationally
Publishers Note Jeff Hankins

JHankins@ABPG.com
known design, strategy and branding consultant who has redesigned prestigious publications such as Advertising Age and Crains Chicago Business. He also was part of the team that redesigned The Wall Street Journal during its conversion to color and editorial expansion in 2002, and hes a faculty affiliate at The Poynter Institute for Media Studies in St. Petersburg, Fla. He did a masterful job helping our team understand readership trends and incorporating them in the new design. The decision to change the flag or logo was easier than we expected, but settling on what it would be proved challenging. We ultimately chose a modern typeface that more appropriately fits a progressive publication design and will also work well with our new website and marketing efforts. In the coming months, well also debut a completely new ArkansasBusiness.com interactive site, a revamped Daily Report e-newsletter, a mobile phone application and a digital edition for your tablet devices. Our goal is to make sure your experience and interaction with Arkansas Business is available through multiple delivery channels to meet your preferences. Unlike many print titles around the country, we were able to approach this initiative from a position of strength instead of desperation. Our circulation numbers, third-party media research and proprietary research tell us were doing many things right and our readership remains strong. But we are keenly aware of changing media consumption habits and reader interests, so it was important for us to re-evaluate our brand top to bottom. I hope youll enjoy phase one and look forward to much more to come. n Jeff Hankins can be reached via e-mail at JHankins@ABPG.com, followed on Twitter @JeffHankins and connected with at Facebook.com/ Jeff.Hankins and Linkedin.com/in/ JeffHankins.
VIEWS
35
ere reminded of the Chicago song Ive Been Searchin, especially this lyric: As my life goes on, I believe somehow, somethings changed Ive been searchin so long to find an answer. This song from the great 1970s rock band could very well be the anthem of todays consumer, a consumer who has been changed by the experience of doing with less during the so-called Great Recession. But how has the consumer been changed? What is he searching for? Because household consumer demand makes up 70 percent of the national economy, these are key questions to which every marketer should want to know the answers. Here are some recent observations. Consumers in todays economy have experienced a shift in perception about what constitutes value. According to Rik Paul, automotive editor of Consumer Reports, A low price doesnt necessarily make a car a good value. Although value
What Consumers Want

is still defined as the extent to which goods or services are perceived to meet wants and needs, whats changed is what those wants and needs actually are. Where a car customer would have once talked about style, prestige and speed, car buyers today want efficient performance, environmental friendliness and long-lasting reliability. Focus group research is designed to uncover those wants and needs, and has, through groups conducted locally and nationwide, discovered the emotional underpinnings of new expectations. Some of what the research has yielded is that because of the breadth and depth of the recession, consumers want a more sustainable, less wasteful lifestyle. They want simplicity and honesty; they want to have a relationship with brands they can trust. And they want to be emotionally rewarded for making wise purchasing decisions. A case in point: Two women are talking. One says to the other, I love your blouse. To which the complimented friend replies, $12 at Target! The pre-recession blousewearer could very well have responded, Thanks. I just love the way Versace fits me. Today, however, she wants others to know how smart she is, thus satisfying an emotional need. Its proof of not only a trend toward thrift, but also self-awareness. No clearance sales or 25 percent off. Just everyday value from companies that understand what is important to their customers. From banks to restaurants, the recession-buffeted consumer is exercising his collective preference, thus driving demand, pricing and packaging. For example, The New York Times reports that as Americans pay down debt, banks lending income is being reduced by a decline in mortgages, credit cards and other types of consumer loans. Consumers are adjusting lifestyles, eliminating the need to take out new loans. And although retail spend-
On Consumers
Ernie and Zoe Oakleaf, Craig Douglass
Craig@CraigDouglass.com
ing is slowly increasing, shoppers are continuing to look for value in products bundled and priced in multiples such as 3 for $3 or 5 for $5 and 10 for $10. Buy one, get one free is no longer good enough. The Wall Street Journal, too, is reporting on value strategy in the sub wars. Quiznos attempted to compete with Subways $5 Footlong by offering a smaller $4 Torpedo. However, the lower price failed to drive demand. What consumers saw with the Subway promo-
tion was a better value. Now Quiznos is offering its own $5 foot-long sandwich. The post-recession consumer also has higher expectations for corporations. Along with a desire for value, consumers are looking for values: ethical behavior, accountability and transparency. They prefer corporations that think like a global brand but act like a local retailer, operate as if they were a small business but have the resources of a worldwide enterprise. If companies will do the research necessary to learn more about what has shaped their consumers psyche, they can respond in kind, creating a consumer experience leading to brand loyalty. Consumers are searching, not for deals, but for value, not for promotional sales, but for sustainable, longterm relationships. n Craig Douglass is an advertising agency owner and a partner with Zoe and Ernie Oakleaf in InFocus LLC, a Little Rock-based focus group research company. This is the first in a new series of monthly commentary on consumer trends.
FEEDBACK
Shale Gas Absolutely Lives Up to Hype

TO THE EDITOR: News stories in Arkansas Business have reported a positive trend for natural gas in the state, showing both an abundant supply and a bright economic future. So it was surprising to read the recent editorial (Overpromised?, July 4) calling the recent New York Times article questioning the abundance of domestic natural gas Pulitzer-worthy. Here in central Arkansas, its clear to many folks that The New York Times article, which was the key source for your piece, was way off the mark. The Fayetteville Shale has brought new jobs and increased revenue, contributing nearly $50 million in severance tax receipts in the state in 2009, up from $600,000 in 2008. Numerous prominent third parties immediately noted that The New York Times didnt reflect the true picture. William Featherston, a managing director at UBS Investment Research, noted that the allegations and inferences made in the NYT article were exaggerated, and Chris Helman, a Forbes reporter, pointed out that the Times used sources from 2009 and that [a] lot has changed since then in the understanding of the shale gas resource. The U.S. Energy Information Administration and MIT have both issued statements contrary to the article since its publication. From a journalism standpoint, the article was filled with unnamed sources, emails with no known origin or context and unsubstantiated inf lammatory language. It was short on numbers and long on speculation. Journalistically, it was reckless and one sided. The New York Times itself
backed away from the story, running an editorial from the Public Editor saying the article went out on a limb, lacked an in-depth dissenting view in the text and should have made clear that shale gas had boomed. Here in Arkansas the value of natural gas to our economy is very clear, a point you noted. But to imply that shale gas has not lived up to the hype is incorrect. The value of exported Arkansas natural gas is now greater than the value of all exported Arkansas crops. Its here, its tangible and its anything but a scheme. The question you posed in your editorial was whether companies are leveling with investors, mineral rights owners and regulators. The answer is undoubtedly yes, and its helped Arkansas stay in the black during the current recession. Production has not only allowed companies to keep employing our neighbors, its also powered stable local revenues, increased charitable giving and brought new infra-
structure to the area, like the recently opened compressed natural gas (CNG) stations in Fort Smith, North Little Rock and Damascus. Until scientific data shows that production has stopped growing exponentially or our local economic numbers drop dramatically, my outlook is for a future where natural gas continues to contribute to our economic expansion and growth. Arkansas Business is the primary nexus of journalism and business in our state. We need your publication to accurately depict what is taking place in our economy, not serve as an echo chamber for someone 1,000 miles away. You are in the perfect position to offer well-sourced, insightful commentary on this phenomenon. You have done so in the past and Im optimistic you will in the future. If you do, maybe you can earn your own Pulitzer. n
Jamie Gates Senior Vice President, Conway Area Chamber of Commerce
YOUR COMMENTS FROM OUR FACEBOOK FEED

Dont Harm Medicare, Social Security (Guest Commentary) Scott McAdory: They have to be cut back in order to get our spending under control. Arkansas Unemployment Up to 8.1 Percent in June Wesley Rester: Well, Im glad our state nickname is no longer The Land of Opportunity because that would be a lie. Scott McAdory: You know its bad in Arkansas when even the state government is laying off folks. Vicky Sanders Morris: Not surprised. Wal-Mart Agrees to Share Data With Nielsen Elizabeth C. Foster: Sharing info of products bought in Wal-Mart will be misleading. I would often prefer a product that I do not buy simply because Wal-Mart doesnt stock it. Arkansas Companies Encouraged at UCA Forum to Do Business in China Wayne Willems: Do business in America first! To join the conversation, simply Like us on Facebook, follow our daily posts of breaking news, and add your comments.
36
Legal Notice
PUBLIC NOTICE
Cynthia J Carnie, OD is closing her offices at 2600 S. Shackleford Rd, Little Rock, AR 72205 and 3929 McCain Blvd, North Little Rock, AR 72116 as of August 1, 2011. Please fax records requests to 501-372-0001
Caught Read handed!
Newly released data shows Little Rock Family is the most read monthly magazine 64,694 in central Arkansas. Period.
58,408 55,396 47,298
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Savvy Kids
AY Magazine
Inviting Arkansas
At Home in Arkansas
Kids Directory
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Submit your notices to legals@abpg.com or ArkansasBusiness.com/legals. For more info contact Bonnie Jacoby at (501) 372-1443 ext. 336 or Bonnie@ABPG.com.
For AdvertisiNg iNFormAtioN, cAll JeNNiFer PyroN At 372-1443, ext. 274.
Real Estate Marketplace

10.4 Prime Commercial acres
on 1-30 and Exit 31 in Hope, AR, city limits with 675 feet of highway frontage. Perfect location for any business that requires easy access to both Eastbound & Westbound trafc off I-30. Contact: J.K. or Johnny Porter (870) 777-3774 or (870) 703-1628
For advertising information contact Bonnie Jacoby (501) 372-1443 bonnie@abpg.com
Arkansas Business
A LOCAL GUIDE TO REAL ESTATE
37
Movers+Shakers
Submit news items to ArkansasBusiness.com/People_MS_Submit.asp
Arkansas Business
Media/Marketing
Amy L. Cruse was hired as an account executive by AY Magazine at Little Rock. She was previously a sales executive for Fox 16 and CW Arkansas television stations.
Transportation
Steven L. Spinner was appointed to the board of directors of Arkansas Best Corp. Spinner is the CEO of United Natural Foods Inc. He will be on the boards audit committee. Paul Bergant, 64, president of intermodal and chief marketing officer for J.B. Hunt Transport Services at Lowell, will retire Dec. 31, 2011. Bergant has been with the company for 33 years. J.B. Hunt also announced that Bob Ralston, 64, executive vice president for maintenance who has also been with the company for 33 years, will retire at the end of the year. Don Cope, 61, senior vice president, controller and chief accounting officer, will retire Oct. 31, 2011. Cope has been with J.B. Hunt for 20 years. Judy McReynolds, CEO of Arkansas Best Corp. of Fort Smith, has been named to the board of directors of OGE Energy Corp. of Oklahoma City, the parent company of Oklahoma Gas & Electric Co., which serves 786,000 customers in Oklahoma and western Arkansas. n
Nonprofit
Alan Sims is now vice president of sales and services for the Little Rock Chamber of Commerce. Sims was previously the director of sales for the Dallas Convention & Visitors Bureau.
Agriculture
Arkansas Livestock Show Association Jerry Masters of Dover was named livestock administrator of the
at Little Rock. Masters is the executive vice president of the Arkansas Pork Producers Association.
Architecture
Arkansas State Board of Architects, Landscape Architects & Interior Designers. Jackson
the position of city president of Hot Springs for Southern Bancorp. Wooldridge was previously the banks vice president of commercial lending in Hot Springs. Carrie Price was promoted to assistant vice president for marketing for Southern Bancorp. She was previously a customer relations manager.
Real Estate
was promoted to the position of executive broker at Pulaski Heights Realty at Little Rock. He recently attained broker license status and has been with Pulaski Heights Realty since September 2007.
Bob Bushmiaer
was added to the
Brooks Jackson
Health Care
Carrie Lee was promoted to director of the Emergency Department of
Brooks Jackson
is the president of Jackson Brown King Palculict Architects at Little Rock.
Education
ate of pharmacy, is the new associate dean for development at the
Jan K. Hastings, who has a doctor-
of planned giving for the college. Hastings was most recently associate professor of pharmacy practice at the college. Landry Kamdem Kamdem, who has a doctorate in pharmacy and is an assistant professor of pharmaceutical sciences at Harding University at Searcy, received the 2011 American Society for Clinical Pharmacology & Therapeutics Young Investigator Award. The award is a one-year grant to fund research in the field of clinical pharmacology. Dr. John David Pemberton is now practicing ophthalmology at the Institute at Little Rock. Pemberton will also be an assistant professor in the UAMS College of Medicine Department of Ophthalmology.
University of Arkansas for Medical Sciences College of Pharmacy at Little Rock. She replaces Jonathan J. Wolfe, who will now be the director
marketing coordinator for NEA Baptist Clinic and NEA Baptist Charitable Foundation at Jonesboro. Trotter will graduate Aug. 5, 2011, from Arkansas State University at Jonesboro with a Danial Nicole Bachelor of Science Trotter in Marketing Management. Dr. Maher Dahdel, a specialist in pulmonary and critical care medicine, is now seeing patients at Sparks Clinic Lung Center at Fort Smith. Maher Dahdel completed his Dahdel advanced training with Cooper University Hospital at Camden, N.J.
Carrie Lee
Arkansas Childrens Hospital at Little Rock. Danial Nicole Trotter was named
Bob Bushmiaer
Super Mover
A closer look behind a prominent promotion
This week: Terry Matthews, next in line as president of intermodal, J.B. Hunt
Matthews, 52, is the current executive vice president of sales and marketing for J.B. Hunt Transport Services Inc. of Lowell. Hell be promoted to president of J.B. Hunt Intermodal effective Jan. 1, 2012.
Replacing a veteran employee: Matthews will replace Paul Bergant, the current president of intermodal and chief marketing officer, who is retiring at the end of the year. Bergant has been with J.B. Hunt for 33 years. Institutional knowledge: Matthews has been involved with J.B. Hunts intermodal strategy, pricing and customTerry Matthews will become chief of J.B. Hunt ers. He has been with J.B. Intermodal on Jan. 1. [Submitted Photo] Hunt for more than 25 years. John Roberts, president providing them with services that are reliand CEO of J.B. Hunt, called the leadership able, economical, safe and sustainable. Our change planned and said the changing Intermodal business has realized excellent of the guard would ensure the companys growth, and we expect further expansion continued success. in this segment as we continue to convert truck traffic to Intermodal. Looking to the future: We are excited about the future for our Intermodal segSeeing success: On July 14, J.B. Hunt ment, Matthews said. For more than reported that second-quarter profit rose two decades, J.B. Hunt Intermodal has led 26 percent to $65.7 million, or 53 cents per the way in engineering solutions keenly share. focused on the needs of our customers,
Insurance
was named vice president of marketing for Life & Specialty Ventures LLC at Little Rock. Reilley previously worked in marketing and operations for Aon insurance company.
Robert M. Reilley
University of Arkansas for Medical Sciences Harvey & Bernice Jones Eye
Financial Services
is now a consumer lender for Arvest Bank at Little Rock. Cheatham was previously a credit analyst for Bank of America.
LaTwan Cheatham
LaTwan Cheatham
Robert M. Reilley
Legal
Andrew Vines of Wright Lindsey & Jennings LLP at Little Rock was elected a member of the Arkansas chapter of the American Board of Trial Advocates.
was promoted to
David Wooldridge
38
Exec Q&A
To submit questions or interview suggestions, email GMoritz@ABPG.com
Arkansas Business
This Week: Hugh McDonald

President and CEO of Entergy Arkansas Inc.
The analysis clearly illustrates a greater benefit in joining MISO. MISO is twice the size of SPP and serves many utilities, large and small, in 13 U.S. states and a Canadian province. The vast majority of the benefits identified in the analysis come from the operation of the Day 2 market. MISO has a mature, operating Day 2 market, whereas SPP does not yet have a Day 2 market. However, even assuming SPP had an operating Day 2 market, the projected cost savings to customers are 25 percent greater in MISO than they would be in SPP. What incentives do investorowned utilities like Entergy Arkansas have to encourage conservation? Its often said that the cheapest kilowatt-hour of electricity is the one thats not used. Recently, many forward-thinking states across the country have been changing the regulatory framework to align customer interests with the interests of both conservation and utilities. Kudos to the Arkansas Public Service Commission for ruling in July to do the same when it approved new programs that will encourage utilities to promote conservation at levels never experienced in Arkansas while at the same time not financially penalizing the utilities for doing so.
Bio: Hugh McDonald

Current position: President and chief executive officer of Entergy Arkansas since 2000. Originally hired in 1982 at Entergys Waterford 3 nuclear plant near New Orleans. Education: B.S. in construction management from North Dakota State University, MBA from the University of New Orleans. Civic: Past board member of the United States Chamber of Commerce and past chair of the Arkansas State Chamber of Commerce. Chair of the Arkansas Research Alliance Board and the Little Rock Regional Chamber of Commerce. Member of the boards of Fifty for the Future, the University of Arkansas Sam Walton College of Business Advisory Board, the UALR College of Business Advisory Council and the UAMS BioVentures Advisory Board. Are there technological developments on the horizon that will change the average Americans relationship with his electric utility? Absolutely. Through the use of Smart Grid technology we will be able to have a much more collaborative relationship with our customers, giving them unprecedented influence over their utility costs. For example, we are operating for the third summer an irrigation load control program where farmers receive discounts in exchange for allowing Entergy to control usage during certain periods of the day and providing them realtime updates via email and text messaging. We plan a similar program for residential customers. n
Hugh McDonald has been Entergys highest ranking executive in Arkansas for more than a decade, and hes currently managing the breakup of the companys longstanding system agreement that left Arkansas ratepayers vulnerable to decisions in other states. Entergy is, after years of waiting, leaving its system agreement and has chosen to join the Midwest Independent System Operator group. Whats in it for Entergy and whats in it for Entergy Arkansas ratepayers? The decision to exit the system agreement was made immediately following the Federal Energy Regulatory Commissions 2005 order on rehearing that required Entergy Arkansas to begin making production cost equalization payments to Entergys other operating companies. Following its exit from the System Agreement in 2013, those payments will go away and will no longer be collected from customers on Entergy Arkansas bills. That will be a huge relief to our customers. The decision to join MISO is a result of a comprehensive analysis to determine which alternative would best meet Entergys needs and those of its customers. Conservative estimates show a projected savings of $200 million over a 10-year period for Entergy Arkansas customers. Much of the benefits will come from having a single entity optimizing transmission and generation within the entire Entergy region. MISO has what is known as a Day 2 market. The Day 2 market operates based on market-driven principles with market participants establishing a price for electricity by matching supply and demand. Southwest Power Pool, headquartered in Little Rock, argues that Entergys ratepayers would be better off if Entergy joined SPP rather than MISO. Why do you disagree?
Pressing Forward
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