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Venture Center, Bear State Bank Partner on FinTech Accelerator

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The Venture Center of Little Rock on Thursday announced its partnership with Bear State Bank for the 2017 VC FinTech Accelerator, which is sponsored by global technology services provider FIS and held at the Little Rock Technology Park.

The accelerator is a 12-week program designed to help early stage startups grow. Ten startups will be selected from a pool of 295 applicants to participate.

Lee Watson, CEO and president of the Venture Center, said in a news release, "It is our strong relationships within the banking community that makes our accelerator program globally competitive."

The Venture Center said financial institutions that partner with it will gain early access to the latest innovation in the industry.

Yurik Paroubek, chief technology officer at the bank, said in the release, "People interact with money in every aspect of their lives and we need to find ways to make those interactions simple, mobile and effective for our customers."

Partnering with the accelerator will help the bank provide customers with a better experience, he said.


US Home Sales Slowed in February After January Surge

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WASHINGTON — Americans retreated from buying existing homes in February, a pullback after sales in January had surged to the fastest pace in a decade. But over the past 12 months, sales are up solidly.

Sales of existing homes fell 3.7 percent last month to a seasonally adjusted annual rate of 5.48 million, the National Association of Realtors said Wednesday. The decline may represent just a temporary slump after the sharp sales increase in January.

Stable hiring and a recovering economy have fueled greater demand among homebuyers. Over the past year, purchases have risen 5.4 percent. At the same time, sales growth has been restricted by a shortage of homes on the market.

"The underlying story is still very positive for the housing market," said Jennifer Lee, a senior economist at BMO Capital Markets. "The February drop is just a blip in the overall trend."

The limited inventory and risks of rising mortgage rates may actually cause the spring home-buying season to begin with a sprint this month. Unlike last year when average 30-year mortgage rates held below 4 percent, buyers may this year feel forced to act swiftly before even higher loan rates and prices make home ownership less affordable.

The number of listings for sale has tumbled 6.4 percent over the past year to 1.75 million homes, a figure only slightly higher than in January when listings declined to the lowest level since the Realtors began tracking the data in 1999.

The supply of homes for sale has fallen on an annual basis for the past 21 months. With inventories squeezed, home values have been rising at levels that are putting greater financial pressure on would-be buyers.

The median sales price has risen 7.7 percent from a year ago to $228,400, more than double the pace of average wage gains.

Lower mortgage rates had eased some of that pressure last year. But the average 30-year fixed rate mortgage carried an interest rate of 4.3 percent last week, up from an average of 3.65 percent last year, according to mortgage buyer Freddie Mac.

In February, sales of existing homes slumped in the Northeast, Midwest and West, while the South eked out a slight gain.

(Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

SPONSORED: Smart Uses for Your Tax Return

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What's not to love about receiving money? It's why millions and millions of people play the lottery each year. And while most won't be lucky enough to win the jackpot, they may very well receive money in a far more common way — getting a tax refund.

For some Americans, tax time is a time of excitement as they wait for a check in the mail or an electronic bank account deposit from Uncle Sam due to overpayment of taxes. Because this money is often considered extra money, many people will use the funds to splurge — maybe take a vacation or install a big screen TV. But while those may be considered fun purchases, the excitement of having them often wears off pretty quickly.

If, however, you use your refund wisely, you can take advantage of long-lasting benefits. Here are some great suggestions for putting your tax refund to work all year long:

  • Build an emergency fund. Many people live paycheck to paycheck. That makes managing unexpected expenses, such as car or home repairs difficult to manage. One way to protect yourself from unexpected expenses or losses in income is to have an emergency fund in a liquid savings account.
  • Reduce debt. Do you have higher-interest credit card, auto loan or other debt? Consider using your tax return to pay down your debt. It's always wise to pay off the highest-interest debt first.
  • Make home improvements. Does your home need new windows or a new roof? Consider using your tax return money to finance these important home improvements which can add value to your home.
  • Make an energy-efficient purchase. Use your refund to purchase energy-efficient appliances, such as a dishwasher, dryer or refrigerator, which can save you money all year long.
  • Start a college savings plan. If you have children, consider using the funds to open an Education IRA or 529 college savings plan. Once you open the plan, arrange to invest in the fund on an ongoing a basis. Even a small amount of money each month will add up over time.
  • Save for retirement. If you don't have a retirement plan through your employer, consider opening an Individual Retirement Account (IRA) with your refund check. Be sure to check with your tax advisor first.
  • Pre-pay your mortgage. If you want to reduce the term of your loan and the amount of interest you will pay over the life of the loan, consider putting the funds from your tax return down on the principal of your mortgage.

The decision on how to best use your tax return depends on your unique financial situation. However, if you choose any of the options above, you're sure to win.

US New Home Sales Rise Despite Higher Mortgage Rates

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WASHINGTON — Americans responded to higher mortgage rates by snapping up new homes in February at the fastest pace since July.

New-home sales rose 6.1 percent month-over-month to a seasonally adjusted annual rate of 592,000, the Commerce Department said Thursday. That sales pace is nearly 13 percent higher than February of last year, a positive sign for the housing market that demand is robust at the start of the spring home-buying season.

Healthy job growth and a recovering economy have pushed up interest in new homes, while the prospect of rising mortgage rates since the November presidential election may have pulled some sales forward.

Builders have ramped up the construction of new homes, which helps meet strong demand and boosts sales. That could provide a slight lift to the broader economy through construction jobs and the consumer spending linked to home purchases.

But demand for homes is still outpacing the construction gains. There were 266,000 new homes for sale last month, the most since July 2009 — a month after the recession ended — and up nearly 10 percent from a year earlier.

The median sales price in February of a new home was $296,200, a decline that might reflect that much of the sales last month were in the cheaper Southern markets.

Construction firms are bullish that sales will keep improving, even though they remain well below the heights of the housing boom seen more than a decade ago.

The National Association of Home Builders/Wells Fargo builder sentiment index climbed to 71 this month, the highest reading since June 2005.

Some buyers may be looking to lock-in their purchases out of concern that mortgage rates will rise, possibly hurting affordability.

Mortgage buyer Freddie Mac said Thursday the average rate on 30-year, fixed-rate home loans this week was 4.23 percent. That represents a slight decline from the prior week, but it's significantly higher than the 3.65 percent average last year.

(Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

First Security Bank Muscles Into Russellville

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Two Arkansas banks have added to their inventory of brick-and-mortar locations during the first quarter and two more have new branches in the works.

First Security Bank of Searcy expanded its Arkansas-only network to Russellville. The full-service branch is No. 74 for the $5.2 billion-asset lender and its first in Pope County.

Piggott State Bank opened its first branch outside of its hometown in an intracounty move. The Rector office, 13 miles away, is the $80.9 million-asset lender’s second full-service branch.

Diamond Bank of Murfreesboro is going to Texas in its latest move. The Texarkana branch would transform the $528.7 million-asset lender into an interstate bank.

Cornerstone Bank of Eureka Springs intends to open a full-service branch in neighboring Boone County. The Harrison location represents the sixth location for the $215.4 million lender.

Southern Bancorp Plans To Raise $20M

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The ownership of Southern Bancorp Inc. recently underwent change to simplify its stock structure and create a more market-friendly organization.

The parent company of Arkadelphia’s Southern Bancorp Bank now has one class of voting common stock and one class of nonvoting common stock.

Previously, Southern had five different classes of common stock. The new structure makes it easier for private place-ment investment as Southern Bancorp embarks on its 2017 capital campaign.

“We would love to have $20 million to $25 million,” said Darrin Williams, CEO of Southern Bancorp Inc. “We plan to close the capital campaign by the end of the year.”

Both classes of common stock have dividend rights, and nonvoting shareholders have the right to convert their holdings to voting shares. The new structure will allow the bank to declare its first ever dividend for all common shareholders in the second quarter: $85,188.

During 2016, the bank declared dividends totaling $22.5 million. The money was used by Southern Bancorp Inc. to help pay off its remaining TARP debt.

The holding company initially participated in TARP’s capital purchase program to the tune of $11 million.

Southern exchanged the CPP funding in 2010 for more favorable terms and expanded the government investment to $33.8 million under TARP’s Community Development Capital Initiative program.

The funds helped Southern Bancorp expand its footprint with acquisitions of the $135 million-asset Timberland Bank of El Dorado and First Delta Bankshares Inc., the $309 million-asset holding company for First National Bank of Blytheville and the Bank of Trumann.

The stock restructuring will give Southern more flexibility to use shares in future acquisitions as well.

The purchase of the $42 million-asset Farmers Bank of Hamburg marked the first time Southern struck a deal that wasn’t all cash. The $4.5 million transaction is a 60-40 mix of stock and cash.

Southern Bancorp Bank, Arkadelphia
Staff: 320          Full-Service Locations: 36 in Arkansas and Mississippi
(All dollars in thousands)

  Total Assets Equity Capital Noncurrent Loans Net Income
2016 $1,149,088 $129,981 $17,334 $10,143
2015 $1,185,130 $142,755 $9,760 $9,818
2014 $1,172,557 $136,033 $5,957 $11,524
2013 $1,150,854 $119,566 $7,676 $9,513
2012 $1,117,585 $122,551 $7,070 $10,822
2011 $1,147,058 $119,129 $9,745 $7,983
2010* $1,078,662 $111,098 $14,174 $9,061
2009** $709,743 $62,287 $8,191 $4,750
2008 $201,285 $18,689 $985 $1,966

*Reflects the acquisition of the $210 million-asset First National Bank of Blytheville and $99 million-asset Bank of Trumann
**Reflects the purchase of the $135 million-asset Timberland Bank of El Dorado and the charter consolidations with Southern Bancorp Bank of Helena and Southern Bancorp Bank of Mississippi
Source: Federal Deposit Insurance Corp.

Majestic Fire Prompts Splash of Hot Springs Development

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The fire that destroyed the historic Majestic Hotel in Hot Springs three years ago helped prompt a wave of development in the downtown district.

After the fire that burned much of the vacant Majestic, which had anchored the north end of Central Avenue, a pile of bricks littered the sidewalk. Getting the site cleaned up was difficult because some asbestos-containing building materials were among the debris.

City officials, civic groups and others gathered and developed a plan to improve downtown. The meetings resulted in several recommendations, including strengthening building codes and creating a downtown development director position.

“The Majestic fire struck an emotional chord with a lot of investors and developers who were either on the fence about downtown or weren’t even considering downtown,” said Cole McCaskill, downtown development director for the Hot Springs Metro Partnership.

Since McCaskill was hired in the summer of 2014, downtown development has seen a flurry of activity, including more than $22.3 million worth of commercial property purchased. The most expensive transaction occurred in October 2015 when GRGCBHS LLC, led by Gary R. Gibbs of Brentwood, Tennessee, bought the Austin Hotel at 305 Malvern from Spa Lodging Inc. for $10.15 million. It was renovated and renamed The Hotel Hot Springs & Spa.

“There’s been a new energy in the city,” said Steve Arrison, CEO of the Hot Springs Convention & Visitors Bureau. “Hot Springs has been a resort community and the No. 1 tourism destination in Arkansas forever. And it just continues to recreate itself. The old is still there, but we’re adding some great new to it.”

The city of Hot Springs also stepped in. It bought the Majestic Hotel in August 2015 for $673,000 from Gary Hassenflu of Park Properties LLC in Kansas City, after he failed to clean up the property. The site has been cleared and is awaiting final environmental approval before the location is redeveloped.

The city will ask for recommendations for what to put at the site, McCaskill said.

Some are pushing for the site to showcase the thermal water at the location. The Majestic had thermal water pumped in from Hot Springs National Park two blocks away, McCaskill said. “That would probably be the best use of that site, … so people could experience it,” he said.

A decision is expected by the end of the year.

Meanwhile, Hot Springs developer Jason Taylor has several projects under development in downtown. He said he was motivated to invest in the area to improve entertainment options. “People come down here, they walk Bathhouse Row, they spend some time here,” he said, “and then they leave.”

He wants to change that. Next month in his seven-story Citizens Building at 723 Central, a restaurant will open on the first floor and a jazz club will be on the second. The remaining floors will be condominiums.

“Downtown is hopping,” Taylor said. “Downtown is starting to really, really come back and be re-energized.”

The following are some of the top projects in downtown Hot Springs:


The Hotel Hot Springs & Spa
305 Malvern Ave.

Price: $10.15 million
Size: 134,230 SF, 14 floors
Date Purchased: October 2015

Shortly after Gary R. Gibbs bought the Austin Hotel at 305 Malvern Ave. for $10.15 million in October 2015, it was closed for renovation. Built in 1986, the 14-story building was “100 percent” renovated at a cost of about $10 million, said Carlos Sibole, the general manager of the hotel, which was renamed The Hotel Hot Springs & Spa.

The 200-room hotel reopened on April 1, 2016. The hotel, which is connected to the Hot Springs Convention Center, is adding a 5,000-SF spa with thermal waters, pool and fitness facilities, Sibole said. It is expected to be completed by the end of the year.

The rooms feature vinyl plank flooring instead of carpets and 49-inch television sets. The architect on the project was Douglas A. Arnold & Associates PLC of Hot Springs, and the construction was handled by CPI Construction LLC, which also is owned by Gibbs.


The Waters
340 Central Ave.

Price: $1.25 million
Size: 60,000 SF, five floors
Date Purchased: June 2014

Built in 1913 and formerly known as the Thompson Building, The Waters has a facade that “creatively blends classic elements with a bold, storefront design echoing the rhythms of the 1920s,” according to a February news release from the hotel that announced its opening.

One of its owners, Bob Kempkes, a founder of the firm Taylor/Kempkes Architects of Hot Springs, said he and the other owners, Anthony Taylor, who is also a founder of the firm, and Robert Zunick, a financial adviser in Hot Springs, had always been interested in the building, which once was home to doctors’ offices. When it became available for sale, the three men were interested. They studied the hotel market in Hot Springs and found more hotels were needed, especially those that had a “higher level of service that you see in a boutique property,” Kempkes said.

He said a complete renovation was done to the building, bringing the total cost of the project to about $7 million. It now has 62 rooms. It also has a Southern artisan-style restaurant on the ground floor, called The Avenue.


Bank of America Building
528 Central Ave.

Price: $1.25 million
Size: 43,000 SF, six floors
Date Purchased: April 2016

Rustic Development LLC, led by Hot Springs developer Jason Taylor, bought the building because it’s one of only a few places downtown that has a patio for customers to sit and eat or drink, Taylor said. The space also can be used for live music “and things of that nature,” he said.

The craft brewery, Bubba Brew’s Brewing Co. of Bonnerdale (Hot Spring County), has signed a lease and is expected to move into the building by the middle of the summer, Taylor said. The restaurant will be done in “an old English, library style,” he said.

The building was built in 1972 and was modeled after the Federal Bureau of Investigation Headquarters in Washington. The Bank of America building “has got big concrete pillars and columns going up all the way to the top,” Taylor said.

Taylor said he doesn’t have plans for what will go on the remaining floors. “But we’re open for discussion,” he said. The architect on the project was Twin Rivers Architecture PA of Arkadelphia. Taylor is the general contractor.


Citizens Building
723 Central Ave.

Price: $1.1 Million
Size: 24,700 SF, seven floors
Date Purchased: July 2015

The building at Central Avenue and Bridge Street has been empty since 1978, said Taylor, who is an owner and developer of the project.

Taylor was attracted to the building, built in 1909, because of its proximity to the Hot Springs Convention Center. “It’s kind of the gateway to downtown as you come around the corner there on Central Avenue,” he said.

On the first floor of the seven-story building will be a restaurant named the Vault, featuring a wood-fired grill. On the second floor will be a jazz club, Lagoria Rhythm & Rock’s Jazz Bistro. Both are expected to open in April, Taylor said.

The remaining floors will be condominiums, ranging in price from $200,000 to $1 million. The sizes of the units are 840 SF to 2,400 SF. In October, a unit on the fourth floor sold for $275,000 to Dal and Chris Strawn.

The architect on the project was Harris Architecture Co. of Hot Springs. Taylor said he was the general contractor for the project.


812 Central Ave.

Price: $575,000
Size: 16,700 SF, two floors
Date Purchased: February 2016

Taylor, whose Rustic Development bought the building, said he plans to put a sports bar type of restaurant on the first floor of the building, which was built in 1903 and features 18-foot ceilings and interior brick. It also has about 4,500 SF of mezzanine space.

Twin Rivers Architecture was the architect. Taylor is the general contractor.

Taylor said he didn’t have a timeline for when that project will be completed. “We want to bring a lot of energy to downtown Hot Springs,” he said.

Zombies Beware: Pine Bluff Is Rising

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Highland Pellets founder Tom Reilley’s first impression of downtown Pine Bluff three years ago was an indelible sight: a tree growing through the roof of a dilapidated grand hotel.

The tree was a pine; the building was the Hotel Pines.

“It made a big impression on me, coming into the area with fresh eyes,” Reilley said in a telephone interview last week. ”

In a different apocalyptic vision, economic developer Lou Ann Nisbett suggested that some buildings downtown could be scenes for “The Walking Dead,” AMC’s zombie series. She enlisted Christopher Crane, film commissioner of the Arkansas Economic Development Commission, to offer up 19 structurally unsound Pine Bluff buildings as possible locations for filming thrillers. If the script called for an explosion, the filmmakers could blow up the buildings.

“Chris actually visited, took some pictures and did some inventory,” Nisbett said. “I was trying to come up with creative ways to get buildings down without heavy costs to the owners or the city.”

Such is the state of economically battered Pine Bluff, but Nisbett and Reilley are anything but despairing.

Nisbett, the president and CEO of Jefferson County’s Economic Development Alliance, and Reilley, the New Hampshire resident who decided to put a $230 million wood pellet plant in Pine Bluff, have joined a growing army on a mission of revitalization.

Reilley’s zeal goes beyond providing jobs and economic stimulus through his new plant, which will deliver wood pellets to fuel European power plants as a substitute for coal. The facility, in Jefferson Industrial Park, has one production line running and three more are under construction.

Reilley is determined to inspire people to build up residents, property values and the tax base of Pine Bluff, a manufacturing city that once had close to 60,000 residents but had dwindled to about 45,000 by 2015, according to the U.S. Census Bureau.

So he joined the board of a tax-exempt 501(c)(3) nonprofit group to investigate restoring the Hotel Pines as it works to revamp downtown and all of Pine Bluff, which he sees as poised for a rebound.

The nonprofit, Pine Bluff Rising, bought the six-story, 100,000-SF hotel for one dollar on Jan. 17 and has committed $300,000 to shoring it up, drying it out and seeing if it can be saved. The seller, Elvin Moon, who worked at the storied hotel as an elevator operator as a teenager, bought the property in 2003 from another nonprofit group, Citizens to Save the Pines, which had acquired it after it was condemned by the city in 1986.

Moon was among a number of property speculators who snapped up unused Pine Bluff buildings at depressed prices starting in the recessions of the 1980s and ’90s.

“Individuals bought buildings, I guess from a speculation standpoint since they were so cheap, hoping to sell them for a profit someday,” said Caleb McMahon, economic development director for the Jefferson County Alliance and a Pine Bluff Rising board member. “But with no repairs, the buildings became decrepit and started falling. The property speculation only decreased property values downtown.”

The purchase of the Hotel Pines, opened in 1913 and designed by Arkansas State Capitol architect George R. Mann, is part of a larger revitalization plan devised by Go Forward Pine Bluff. Go Forward, a 100-volunteer group financed by one of Pine Bluff’s most successful businesses, Simmons First National Corp., and led by former CEO Tommy May and Simmons First Foundation board member Mary Pringos, has announced an ambitious plan of 27 proposals.

The plan hinges on a public vote for a five-eighths-cent city sales tax that would raise some $32 million before lapsing after seven years. About $20 million more is planned via private fundraising. If the Pine Bluff City Council gives its approval on April 3, the election will be held June 13.

Jefferson County already has a three-eighths-cent tax for economic development, money that has paid dividends in recent years with groundbreakings and expansions at the industrial park, including Highland Pellets and the recruitment of industries from South Korea, Austria and Argentina.

Carla Martin, vice chancellor for finance and administration at the University of Arkansas at Pine Bluff and a Go Forward leader, said the new tax could burden some residents, but she noted that the levy is temporary and that it is expected to have a household impact of $15 a month, or $180 a year.

“I am confident that the citizens of Pine Bluff want a better tomorrow,” she said. “I am confident that we must have some skin in the game.”

Pringos said that if the tax vote succeeds, all of the spending would require City Council approval and would be “pay as you go, with no bond issue.” Pine Bluff Mayor Shirley Washington, she said, has “overwhelmingly endorsed” the program and was one of its 100 volunteers.

Several attempts to reach Washington for this article were unsuccessful.

The Hotel Pines
One of Go Forward’s recommendations, along with a complete overhaul of city codes and enforcement, is to repurpose or demolish the Hotel Pines.

Opened in the golden age of passenger rail just a few blocks from Pine Bluff’s Union Station, it attracted travelers seeking the elegance of one of Arkansas’ premier hotels. When passenger rail service ended in 1968, the death knell sounded for the hotel, which closed in 1970.

The now-crumbling two-story lobby and second-floor balcony were built with a grand curved ceiling of stained glass, a treasure long feared lost. McMahon recently discovered otherwise.

“Mr. Moon told us that he still had all the stained glass; he took us to where he had it warehoused, and we have it now.”

The first step is testing the building and getting a cost assessment.

A $35 million renovation might be workable, through use of state and federal historic tax credits, bank lending and “equity contributions from various sources,” Reilley said. However, if the price tag balloons to more than $35 million, demolition is likely.

Pine Bluff Rising has engaged WER Architects/Planners of Little Rock; East Harding Construction, which is using local contractors; and interior designer Kaki Hockersmith. Hockersmith, of Little Rock, redid the White House for the Clinton administration.

Engineers are making a complete assessment expected in about 60 days. “It’s due diligence, but also an emotional issue,” Reilley said. “If it can be saved, we want to save it.”

Reilley, a Bear Stearns senior managing director in London before his own international projects gave him a glimpse of impoverished areas worldwide, has been brainstorming on the hotel’s future. Many of the ideas are nascent.

“A leading and respected Arkansas hotel operator would love to do a joint venture on Hotel Pines,” he said, adding that UAPB might be “incredibly synergistic” with the project.

UAPB Chancellor Laurence Alexander called talk of any link with the hotel premature. “But if it rises above a whisper, I’ll have some thoughts for sure.”

McMahon said restoring the hotel, which was added to the National Register of Historic Places in 1979, to its former glory wouldn’t mean forgoing new uses. It was conceived as “a 110-room hotel. But we would like retail downstairs, banquet galleries and the like.”

The work includes pumping out the basement, shoring up four columns, boarding up broken windows and fixing the leaky roof. “We have to do all that just to dry it out,” Reilley said. “Soon we’ll know if the hotel can be saved or if it has to go.”

Reversing the Deterioration
Either option beats simply letting it deteriorate, officials said.

That was the case a few blocks away at 620 Main St., where the former Sahara Temple building, owned by Garland Trice, has suffered multiple collapses. In July 2014, risks of falling debris led the city to shut down Main Street between Sixth and Eighth avenues. The stretch is still closed, much to the inconvenience of neighboring businesses like Pine Bluff Title Co. and Davis Auto Parts.

“The proof is in the pudding out there,” parts store owner Bobby Davis told the Pine Bluff Commercial in January. “People can’t come in. They get to the barricade on either end, and they turn around and go somewhere else.”

A free-standing wall of the condemned building toppled that month onto the building next door, an accounting business owned by Lloyd F. Lee.

“It’s distressing,” McMahon said. “Main Street is shut off because we have bricks falling in the street. That being said, we want to save all the buildings we can.”

That’s where Pine Bluff Rising and Go Forward come in.

“When the directors and I started talking about funding Pine Bluff Rising, I said let’s contribute our capital and time in a meaningful way, and work on some of the most intractable problems in the area,” said Reilley, whose fellow nonprofit board members are William Carpenter, McMahon and UAPB professor Ryan Watley.

One problem is the image and reality of downtown.

“On this part of Main Street [near the Hotel Pines], I’d say 90 percent of the buildings are unoccupied,” McMahon said. “That’s why one major goal is to grow downtown.” Reilley and McMahon said a well-known Arkansas business may soon announce plans for a downtown destination, part of a project that is also wooing a Little Rock restaurateur. “We could have an announcement in two or three weeks,” Reilley said.

Reilley has partnered with Win Trafford, a City Council member and real estate broker, to acquire the historic Greystone residence near Jefferson Regional Medical Center with the goal of turning it into a high-end bed-and-breakfast.

“It’s a beautiful building that has fallen into disrepair,” Reilley said. “We hired Kaki Hockersmith to do all the interior design work, and it should be ready to open in six to nine months.”

Go Forward’s main priority is “increasing the tax base for the city of Pine Bluff,” Pringos told Arkansas Business. “Declines in population and businesses have left the city in a difficult position even providing basic services. We have to attack certain issues to reverse that trend.”

‘Starving at the Banquet’
Reilley hopes that Pine Bluff Rising can improve the city’s image through a social media campaign, but he says the area has the essentials to bounce back.

“The town is really starving at the banquet,” Reilley said. “I understand problems like the mechanization of the Delta and job losses associated with that, but Pine Bluff has a good two-year school in SEARK [Southeast Arkansas College], a four-year university in UAPB, a good airport, a great industrial park and an excellent river port. All it’s missing is a transactional plan.

“Mayor Washington has shown great leadership, and courageous work is being done by Tommy May and Go Forward. Community leaders like George Makris at Simmons Bank, Chancellor Alexander at UAPB and Lou Ann Nisbett, to name a few, are leading by example.” But like a team on a losing streak, Pine Bluff “needs some wins” to get people off the bench, he said.

A couple of victories are already in the books. Pine Bluff passed a property tax increase in November to finance a new $14 million library. The 35,000-SF building is expected to rise soon at Main Street and Sixth Avenue.

Funding for a $6.3 million aquatic center was also secured when Stephens Inc. accountants found a way to fully finance the project by restructuring existing city bonds. More than $4 million for the center had been raised through a sales tax levy, but the Stephens tactic overcame a $2 million shortfall. The site is 10th Avenue and Convention Center Drive, opposite the Pine Bluff Civic Center complex.

If voters approve the Go Forward levy, Pine Bluff residents will face a steep 11 percent sales tax on retail purchases other than groceries, but officials say local businesses and workers will benefit when the $52 million fund it contributes to starts flowing. Pine Bluff Rising, for example, is establishing an alliance of Jefferson County subcontractors to compete for millions of dollars in building and demolition work.

Watley is working with East Harding CEO Van Tilbury and Michael Smith, vice president of preconstruction and project management at Con-Real Construction, to urge “minority businesses and contractors who need additional skill, capital, bonding ability or general bidding skills to come together in advance of all the work that Go Forward and Pine Bluff Rising will generate,” Reilley said.

Go Forward’s blueprint calls for creating a downtown square with “city-purposed programs,” the creation of a Delta Festival, Delta sports tournaments and “one or more nice restaurants.”

Restoration efforts would focus on buildings like the Masonic Temple, the Train Depot Museum and the Saenger Theatre, where Harry Houdini and Roy Rogers performed.

Education plans from Go Forward include an Educational Alliance among the city’s three school districts to focus on joint teaching arrangements for science, technology, engineering and mathematics courses, as well as an Innovation Hub in the Arts & Science Center Annex, envisioned as a partnership between SEARK and UAPB.

Go Forward’s efforts are divided into four pillars, each served by committees. They are economic development, chaired by Nick Makris; education, led by Scott Patillo; infrastructure and government, headed by Rosalind Mouser; and quality of life, chaired by Kaleybra Morehead.

“Bringing jobs, addressing blight, bringing in more things to do, all of those issues were seen in our surveys and focus groups,” Pringos said.

Martin boiled down the goals. “Clean up the city, grow the economy, create a more-skilled workforce, offer safer neighborhoods. Make this a place people want to live, work and raise a family. Ultimately we want to make Pine Bluff a city its residents are proud to call home.”


Roles Shift in Golden Bankruptcy

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The early stages of the Chapter 7 bankruptcy of Lex and Ellen Golden have had a revolving door quality.

U.S. Bankruptcy Judge Phyllis Jones stepped down as the presiding judge in the Little Rock couple’s case, which listed debts of $7.7 million and assets of $1.9 million. She was replaced by Ben Barry on March 20.

You might recall Barry oversaw the Chapter-11-turned-Chapter-7 bankruptcy of a Golden enterprise: Acme Holding Co., parent company of the now-defunct Allied Bank of Mulberry.

Tripp Wetzel initially was listed as bankruptcy trustee for the case. However, his Little Rock law firm also is listed among the Goldens’ creditors: $4,872 owed for unpaid legal services.

Wetzel officially left the bankruptcy case on March 8. His would-be successor, James Dowden, declined the appointment the next day when Randy Rice was named trustee.

Wetzel’s firm defended the Goldens in a loan guarantee lawsuit brought by Chambers Bank of Danville that ended in a $2 million judgment in favor of the bank.

In related news:

The Goldens’ bankruptcy attorney, Kevin Keech of Little Rock, accepted a combination of $6,250 and household goods valued at $6,850 as payment for his services.

According to their bankruptcy petition, the Goldens are upside down on their Little Rock residence. The 4,600-SF house near the Country Club of Little Rock is encumbered by two mortgages totaling $928,647 while the property is valued at only $862,500.

U.S. Bank of Cincinnati holds a first mortgage claim of $719,933 on an original $825,000 loan in December 2010. Riverside Bank of Sparkman holds a second mortgage claim of $208,714 from a January 2015 loan of $200,875.

Despite the negative math, the Goldens claim an exemption on the house indicating they intend to stay put.

Conway Booms, Setting Retail Records

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Commercial development is thriving in Conway, evidenced by the nearly complete $65 million Lewis Crossing shopping center and plans for a startup space the city hopes will attract new and existing companies.

Both are part of the city’s continuing transformation into a commercial hub distinct from Little Rock, though they share a metropolitan statistical area.

“In spite of a difficult national retail climate, Conway has continued to show growth with record retail sales of $1.45 billion for 2016,” Brad Lacy, CEO of the Conway Area Chamber of Commerce, said in an email to Arkansas Business. “With the opening of Sam’s Club in January, we anticipate that number to grow as we solidify our place as a regional shopping destination.”

Lacy also lauded Conway’s success in retail development. Sam’s Club, at 136,580 SF, is the main anchor of Lewis Crossing.

“This growth will only build the case for other retailers to invest in our market,” Lacy said. “With a great mix of locally owned, specialty stores and restaurants and well-known national brands, we consistently hear that our residents are not traveling out of town to shop and more visitors are choosing Conway.”

The 441,871-SF Lewis Crossing is at the southeast corner of Interstate 40 and Dave Ward Drive; just south of another top development, Lewis Ranch. Shoppes at Central Landing is north of both and on the other side of Interstate 40.

Lewis Ranch LLC moved dirt last week for a new road it is building to connect its 50-acre development to Lewis Crossing and Conway Commons, said Operations Analyst Audie Alumbaugh. Conway Commons is the 600,000-SF shopping center near I-40 off of Exit 127.

“Our goal is to have a defined retail corridor starting around Conway Farm & Home on Amity and going all the way through the Sam’s development, through Lewis Ranch and up through Conway Commons, where the Target, the Home Depot, all that is,” she said.

The property owner, Bill Lewis of Conway, is investing $5 million in the road and other infrastructure features, Alumbaugh said. The new Amity Road will go north of Crain Buick GMC, then through Lewis Ranch to the second roundabout on Dave Ward Drive. Crain Buick GMC and Crain Kia of Conway have already bought property at Lewis Ranch.

Alumbaugh wouldn’t disclose the project’s total cost, saying several pieces will be built to the future tenants’ specifications, altering estimates.

Sage Partners Real Estate Solutions of Fayetteville is the leasing agent for the property. The Tyler Group of Conway is managing the project, and Centennial Bank is financing it.

Alumbaugh said the owner has been working on the development for two years and has letters of intent as well as written offers. She also mentioned talks with three big-box stores but declined to name them.

She expects Lewis Ranch construction to take two years, but the road is set to be finished by the end of this year.

Lewis Crossing
Much further along is its neighbor, Lewis Crossing.

All of its anchor stores are open, said Roger Cole with Elrod Real Estate of Little Rock, the local leasing agent.

Open now are Academy Sports, Bed Bath & Beyond, On the Border, Kay Jewelers, Books-A-Million, Dollar Tree, Michael’s, Petco, Ross Dress for Less, Ulta, Aspen Dental, AT&T and Mattress Firm.

Hideaway Pizza and Red Robin near starting construction of their standalone buildings, while Success Vision, T-Mobile and Rita’s Italian Ice are set for finish-out work. David’s Burgers, another standalone building does not yet have a construction start date, he said.

Developer Ryan Mosser of Collett & Associates of Charlotte, North Carolina, said, “Everybody that we’ve talked to out there that’s open says it’s going really well with sales. A few of the tenants are above projections … It’s a great town and all retailers do really well.”

C.R. Crawford of Fayetteville was the contractor; Garrett Excavating of Hot Springs did the site work, Construction started in August 2015.

Shoppes at Central Landing
Another big retail development in planning is the Shoppes at Central Landing, a 302,708-SF center featuring Dillard’s, retail shops, restaurants, apartments, a hotel and outparcels, according to the website of developer Jim Wilson & Associates of Montgomery, Alabama. The company’s president, Will Wilson, did not return calls from Arkansas Business.

The center is being built at the 151-acre former municipal airport on Corporate Drive. A new overpass is also underway to connect Central Landing with Conway Commons.

Bryan Patrick, director of the city’s Planning & Development Department, said the city is building the overpass and people will be using it by the end of the summer or early fall.

He said all of the city’s infrastructure improvements connected to the Central Landing project, including the overpass, cost about $28 million.

Projects With UCA Ties
The Conway Area Chamber announced earlier this month Conway Corp. will pay for a new space for startups called the Arnold Innovation Center. The utility has not pledged an exact amount yet because the center’s downtown location has not been finalized, CEO Lacy said.

A site may be known by May.

The Conductor, a public-private partnership of the University of Central Arkansas and Startup Junkie Consulting of Fayetteville, will offer programming to Arnold Innovation Center, named for retiring Conway Corp. CEO Richie Arnold.UCA will pay Startup Junkie $1.3 million to run the Conductor through September 2019.

The chamber is also studying the feasibility of renovating the historic chamber-owned Grand Theatre into a new arts venue.

UCA’s other commercial development was the $16.3 million, 67,500-SF Donaghey Hall. Students moved in in August and businesses followed.

The second, third and fourth floors are residential, but the first floor is home to Uncle T’s Deli/Market, Marble Slab Creamery, Great American Cookies, Blue Sail Coffee and Mosaique Bistro & Grill.

Trek Bikes of Conway plans to join them in mid-April, a UCA spokeswoman said.

On five-year leases, tenants pay $1,888 to $4,652 in rent, $15 per square foot. The building will also house a 1,000-SF “maker space” called The Cave that will give entrepreneurs access to advanced tools and technology. The university partnered with the Arkansas Regional Innovation Hub to operate the maker space, which will yield no rent.

Office Buildings
A smaller project, three multi-tenant office buildings at 605, 635 and 655 Dave Ward Drive, have been developed by George Covington Sr. of Covington Cos. in Conway for $3.7 million. The buildings are complete, but tenants are being sought, Covington said.

Covington constructed the building at 635, while the others were remodeled. The three combined offer tenants 46,697 SF.

Home BancShares Nabs Florida's Stonegate Bank in $778.4M Deal

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Home BancShares Inc. of Conway, the parent company of Centennial Bank, said Monday that it will acquire Stonegate Bank of Pompano Beach, Florida, a $778.4 million deal that expands Centennial's presence in the Sunshine State and will propel the bank farther beyond the $10 billion-asset mark.

Once the deal is done, the combined company will have about $13.5 billion in total assets.

During an announcement at the Little Rock Regional Chamber on Monday, Home BancShares Chairman Johnny Allison said the merger will make Florida the largest franchise in the company's four-state footprint.  

"The acquisition of Stonegate is a game-changer for Home in the Florida market," Allison said in a news release. "Stonegate is a top-tier franchise with high profitability and has the perfect footprint to enhance Home's presence in Florida.

"This is another 'Triple A' transaction for Home: accretive to earnings per share, accretive to book value and accretive to tangible book value. Our shareholders will benefit on day one as we will be stronger together."

The merger is Home BancShares' (Nasdaq: HOMB) biggest ever — even bigger than its $230 million deal to buy Liberty Bancshares Inc. of Jonesboro, which was announced in 2013.

The purchase is Home BancShares' 22nd and the latest of many in Florida, where it just wrapped up a deal to buy Giant Holdings Inc. of Fort Lauderdale, Florida, in an $88.5 million transaction that pushed Home BancShares beyond the $10 billion-asset mark.

Dave Seleski, Stonegate's CEO, said the two companies "are two very high performing franchises with a similar operating philosophy and customer focus.

"This is a great combination for our shareholders, customers and communities," Seleski said.

Under the terms of the agreement, Stonegate (Nasdaq: SGBK) will merge into Centennial and shareholders of Stonegate will receive proceeds from the transaction of about $749.8 million — consisting of $50 million in cash and $699.8 million of Home BancShares common stock. 

Stonegate shareholders will get about $28.6 million in cash in cancellation of their options immediately before the merger, for a total transaction value of about $778.4 million.

The acquisition is expected to close in the fourth quarter and is subject to shareholder approval by both companies, regulatory approval and other closing conditions.

Stonegate operates 25 branch locations in Florida with significant presence in Broward and Sarasota counties. As of Dec. 31, 2016, Stonegate had about $3.1 billion in total assets, $2.5 billion in total loans and $2.7 billion in deposits. 

At the chamber, Allison presented Seleski with a Hog Hat and Red Wolves football jersey bearing the No. 22, denoting Stonegate as Home BancShares' 22nd acquisition. 

Allison said the two organizations would mesh well and work well together because of their similar cultures.

"We will gee and haw fine," said Allison, referring to voice commands to turn a team left or right while plowing a field.

(With reporting by George Waldon.)

Bank of Star City Fined for Flood Insurance Violations

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The Bank of Star City has agreed to pay an $11,000 civil penalty for violations of the National Flood Insurance Act, the Federal Reserve System disclosed Tuesday.

In the order entered on Monday, the bank agreed to pay the penalty to the National Flood Insurance Program and to comply with the flood insurance law, which requires forbids banks from making loans secured by property in a designated flood zone unless the property is covered by flood insurance.

The order includes no details of the Bank of Star City's violations, and President R. Mark Owen was out of the bank on Tuesday and could not be reached for comment.

Bank of Star City is the 79th largest of the 100 banks chartered in Arkansas with 91.4 million in assets as of Dec. 31. It reported net income of $1.3 million last year.

Contracts to Buy US Homes Hit Highest Level Since April

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WASHINGTON — More people signed contracts to buy U.S. homes last month as warm weather and rising confidence appeared to encourage consumers to look for houses.

The National Association of Realtors said Wednesday that its pending home sales index climbed 5.5 percent in February to 112.3, its highest point since April and its second-highest point since 2006.

Lawrence Yun, the Realtors' chief economist, suggested that a rising stock market had helped bolster confidence. "Last month being the warmest February in decades also played a role in kick-starting prospective buyers' house hunt," Yun said.

In addition, rising prices may have nudged some people into making offers for homes now out of fear of having to pay more if they wait.

The NAR's index of pending home sales rose 11.4 percent in the Midwest, 4.3 percent in the South, 3.4 percent in the Northeast and 3.1 percent in the West.

The U.S. housing market is looking strong despite a sharp rise in mortgage rates since the presidential election. The average on a benchmark 30-year fixed rate loan was 4.23 percent last week, up from 3.54 percent the week before the Nov. 8 vote.

Investors bid up rates in part out of expectation that President Donald Trump's plans to cut taxes and increase spending on defense and infrastructure would raise economic growth and inflation.

The Realtors reported last week that sales of existing homes fell in February after having surged in January to the fastest pace in a decade. Sales were still up solidly from a year earlier.

The supply of homes for sale is tight and is helping to drive prices up and affordability down. The number of listings for sale has tumbled 6.4 percent over the past year to 1.75 million homes last month, up only slightly from a record low in January.

The supply of homes for sale has fallen on an annual basis for the past 21 months.

(Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

US Economy Grew at 2.1 Percent Rate in 4Q

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WASHINGTON — The U.S. economy grew at a slightly faster rate in the fourth quarter than earlier estimates, as consumers powered economic momentum heading into 2017.

The gross domestic product, the economy's total output of goods and services, expanded at an annual rate of 2.1 percent in the October-December period, the Commerce Department reported Thursday. That is an improvement from the previous estimate of 1.9 percent. The added strength stemmed from stronger consumer spending, which offset an increased drag from trade.

The small change to the fourth quarter did not alter growth for the entire year, which came in at an anemic 1.6 percent. It was the worst showing in five years. President Donald Trump has pledged to boost GDP growth to 4 percent or better, though private economists are doubtful.

For the fourth quarter, the government revised its estimate for consumer spending, which accounts for two-thirds of economic activity, to a growth rate of 3.5 percent from a previous estimate of 3 percent.

The economy also got a boost from slightly stronger rebuilding of business stockpiles. However, these increases were offset somewhat by a bigger trade deficit, which subtracts from GDP growth, and less business investment.

The 2.1 percent GDP growth in the fourth quarter came after a 3.5 percent spurt of growth in the third quarter. For the current quarter, analysts believe growth will come in around 2 percent

Since the Great Recession ended in mid-2009, annual growth has averaged 2.1 percent, the worst performance for any recovery in the post-World War II period.

Trump vowed during the campaign to double economic growth to 4 percent or better. He said his economic program of tax cuts, deregulation and increased spending in such areas as the military and infrastructure would boost the economy back to growth rates not seen on a sustained basis in decades.

However, Trump's legislative agenda received a setback last week when Republicans were forced to pull a measure to repeal and replace the Affordable Care Act because they did not have enough votes in the House of Representatives. Despite the setback, Trump has said the administration will soon unveil a plan to cut individual and corporate tax rates, a key component of his stimulus program.

Treasury Secretary Steven Mnuchin said last week that even if the initial goal of getting the tax measure approved by August slips, he still believes the plan can win congressional approval by this fall.

Mnuchin has cited a lower goal of growth above 3 percent. Private economists, however, believe the impact of Trump's stimulus efforts will be even smaller. Top forecasters with the National Association for Business Economists on Monday projected GDP growth this year of 2.3 percent, rising only slightly to 2.5 percent in 2018.

Private economists believe that even with the full adoption of Trump's stimulus program, the economy will be facing stiff headwinds such as an aging workforce as the baby boomers retire and disappointing gains in productivity. Growth in the labor force and productivity growth are the two key components that determine potential GDP growth.

Another complicating factor for Trump's program is the Federal Reserve, which earlier this month boosted a key interest rate for the second time in three months and retained a projection for a total of three rate hikes this year. The Fed is raising interest rates to make sure that inflation does not become a problem but higher rates could make it harder to achieve faster GDP growth.

(Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

US Consumer Spending Up Tiny 0.1 Percent in February

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WASHINGTON — U.S. consumers increased their spending at the weakest pace in six months, while the 12-month rise in consumer prices was the largest in nearly five years.

Consumer spending edged up 0.1 percent in February following a similarly sluggish 0.2 percent increase in January, the Commerce Department reported Friday. The small gains suggest that overall economic growth likely slowed in the first quarter.

Incomes, however, were up a solid 0.4 percent in February, offering hope for stronger consumer spending in the months ahead.

Meanwhile, an inflation gauge closely watched by the Federal Reserve increased 2.1 percent in February compared to a year ago. It is the sharpest 12-month rise since March 2012 and slightly above the Fed's 2 percent inflation target.

The Fed raised a key interest rate in March, just three months after a hike in December. Officials have sent signals that the pace of rate hikes will accelerate this year after seven years of stagnant rates at a record low near zero. In the last two years, the Fed nudged rates up just one time in each of those years.

The overall economy grew at a 2.1 percent rate in the October-December quarter, supported by a strong gain in consumer spending.

But with the recent weakness in spending, which accounts for 70 percent of economic activity, many analysts believe growth in the January-March quarter could slow to a rate of 1.5 percent or less.

However, economists expect the economy will accelerate later this year to rates around 2.5 percent or more if President Donald Trump is successful in winning approval for his economic stimulus package, which includes tax cuts, infrastructure spending increases and deregulation.

Another reason for the optimistic spending outlook is the recent surge in consumer confidence, which by the Conference Board's measure hit a 16-year high in March.

The February spending figure reflected in part an unusually mild winter, which sapped demand for utilities. Services, the category that covers utility payments, was up just 0.1 percent. Spending on goods was also weak, with purchases of long-lasting durable goods such as autos down 0.1 percent. Nondurable goods spending showed no change.

The combination of a strong gain in incomes and modest rise in spending pushed the saving rate up to 5.6 percent of after-tax income in February, the highest level since October and up from 5.4 percent in January.

(Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)


Jonathan Breedlove New Loan Officer for AgHeritage Branch in Dermott (Movers & Shakers)

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Jonathan Breedlove has joined AgHeritage Farm Credit Services as agriculture loan officer in the Dermott branch office.

He previously worked as a sales representative at Arkansas Ag Co.


See more of this week's Movers & Shakers, and submit your own announcement at ArkansasBusiness.com/Movers.

Barron's Names Joey Small to Top Advisors List (Movers & Shakers)

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Joey Small has been named to the list of America’s Top 1,200 Advisors: State-by-State, published by Barron’s magazine.

He is a private wealth adviser at Ameriprise Financial in Little Rock.


Alexandra Kosmitis has joined Simmons Bank in Little Rock as executive project manager.

In her new role, she will lead and administer various executive and companywide projects. An attorney and certified public accountant, she previously worked as an associate at the Pine Bluff law firm Bridges Young Matthews & Drake.


Tyler Steele, Tommy Coughlin and Carla Martinez have been promoted at Grand Savings Bank.

Steele has been named vice chairman of the board of directors at the bank in Bentonville. In addition to his board duties, Steele oversees all market presidents and is responsible for the bank’s loan and deposit growth as well as business development and community involvement. He joined the bank in 2012 as the northwest Arkansas market president and board member.

Coughlin has been promoted to market president of the Bentonville and Rogers area. He previously served as a vice president and loan officer.

Martinez has been promoted to market president of western Benton County. This expands her previous role as market president of the Gentry and Decatur locations to include Siloam Springs and Gravette, which will open in the summer of 2017.

Natalie Bartholomew has joined Grand Savings Bank in Rogers as the new chief marketing officer and vice president. She will also work as a loan officer while serving roles in business development, company expansion and meeting the needs of a growing customer base. She joins the bank with more than 16 years of banking experience.


Dan SanRoman has been hired as operations manager at Snap Shot Services in Little Rock. He previously worked as an appraisal specialist at Centennial Bank.


Teresa Sutterfield and Carla Mabry have joined Stone Bank in Mountain View. Sutterfield will be customer service manager, and Mabry will serve as a senior customer service representative.

Sutterfield was previously a universal banker for First Service Bank as well as an assistant vice president and branch manager for First Security Bank of Mountain View and a branch manager for Bank of Mountain View.

Mabry has held banking positions at Bank of Mountain View and First Service Bank in Mountain View.


See more of this week's Movers & Shakers, and submit your own announcement at ArkansasBusiness.com/Movers.

Hardy Country Singer Gets $2.1 Million from Missouri Bank Over Lost Masters

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A country singer/songwriter who lives in Hardy in north Arkansas recently received a $2.1 million jury award against a Missouri bank for selling the master recordings of his songs and his recording equipment.

David Lynn Jones, who wrote “Living in the Promiseland,” which became a No. 1 hit for Willie Nelson in 1986, sued West Plains Bank & Trust of Missouri in 2012 in U.S. District Court in Batesville for selling the master tapes to 114 of his songs and his $35,000 recorder for just $430, according to his attorney, Gary Speed of Little Rock.

Jones, who had his own top 10 record in 1987 with “Bonnie Jean (Little Sister),” had given the equipment and the five albums’ worth of songs to his friend, Robert “Bobby” Roberts in West Plains, Missouri, for him to transfer from analog to digital.

Roberts, though, had defaulted on a loan with the bank, which then foreclosed on Roberts’ property, including his studio containing Jones’ songs and equipment, Speed said.

As a result, in 2011 the bank took possession of Jones’ property, even though Jones “didn’t have any obligation to West Plains Bank at all,” Speed said.

Roberts told the bank that the items belonged to Jones, but that argument fell on deaf ears. The items were then sold for $430. Because trash was in the studio, the bank thought the equipment and tapes had been abandoned, Speed said.

Jones sued the bank for taking the items.

During the five-day trial in March, the person who bought Jones’ items sold them back to him for $430.

Nevertheless, for years Jones “wasn’t able to have the songs mixed into digital works that could have been made available for downloading,” Speed said.

The jury awarded Jones $600,000 for compensatory damages and $1.5 million for punitive damages.

The bank is expected to file a motion for get a new trial.

Its attorney, Bryan Wade of Husch Blackwell LLP of Springfield, Missouri, didn’t immediately return a call for comment.

K Lofts Construction Moving Again With Funding Agreement

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A new lender and a new contractor are accompanying a restart of the dormant K Lofts project in downtown Little Rock.

A subsidiary of Ardent Financial of Atlanta provided a one-year funding agreement of $2 million to get the 32-unit apartment redevelopment moving again.

According to loan documents, $1.8 million was used to refinance the original construction loan and pay outstanding bills for work to bring new life to the 115-year-old building at 315 Main St.

Most of that money went to repay Fort Smith’s Creek Capital Partners LLC, which in December purchased the original $1.3 million first mortgage from IberiaBank.

Another chunk went to Little Rock’s AMR Construction LLC, the original contractor on the project.

After pulling off the job on April Fools’ Day 2015, AMR filed a lien claim of $196,440 divided between two contracts.

More than $143,700 was owed on the original $2.1 million contract to redevelop the upper floors of the once-dilapidated five-story building.

More than $52,600 was owed on an $825,300 contract to re-pair a partial collapse of the east wall in 2013.

The remaining $200,000 from the Ardent loan is devoted to pay for work needed to complete the project.

Who is finishing the job?

That would be MWF Construction LLC, led by Matt Foster.

We understand that installation of appliances and flooring are the biggest items remaining. These tasks and the necessary final inspections could be completed before Memorial Day.

Shifting Labor Rules Keep Arkansas Attorneys Busy

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Arkansas labor and employment attorneys are keeping an eye on challenges to the U.S. Department of Labor’s overtime rules as well as a bill that would amend the Minimum Wage Act in Arkansas.

The Labor Department had planned to raise the pay threshold for salaried workers to be considered exempt from overtime rules, but the issue has been mired in court since late last year. The salary level has been $23,600 a year since 2004. But just before Dec. 1, when the threshold was supposed to jump to $47,476, a federal judge in Texas blocked the change with an injunction. Some employers, including St. Bernards Healthcare in Jonesboro, had already made staffing changes to prepare for the new rules.

The Department of Labor has appealed the judge’s ruling to the 5th U.S. Circuit Court of Appeals, where it remains.

“Things are still in limbo,” said attorney Jane A. Kim, whose practice area includes employer and workplace issues at the Wright Lindsey Jennings law firm in Little Rock. “This uncertainty is certainly frustrating, and it’s challenging.”

Meanwhile, the Arkansas House of Representatives passed a bill last week that could keep employers from having to pay employees for putting on and taking off protective gear. As of Thursday morning, the bill was pending in the state Senate.

The legislation is in response to an opinion last May by the Arkansas Supreme Court that upheld an award of $3 million to workers at a Gerber Products Co. baby food plant in Fort Smith who had not been paid for the time it took to put on and take off protective clothing, even though the union and the company agreed that the workers wouldn’t be paid for that time.

The bill would allow a union and a company to agree to make those types of collective bargaining decisions.

“We think it’s a bad bill,” said Tim Steadman of Holleman & Associates PA of Little Rock, one of the attorneys who represented the Gerber employees. “It’s a right-to-work state. You don’t have to be a member of a union. … The union shouldn’t be able to trade your rights.”

The sponsor of the bill, Rep. Charlie Collins, R-Fayetteville, said the bill would affect few workers in Arkansas and is designed to mirror federal law.

“The AFL-CIO is OK” with the legislation, Collins said. “It does not interfere with collective bargaining rights, so to my knowledge there’s no significant opposition.”

Gerber also believes it is the right legislation, said one of the company’s attorneys, E.B. “Chip” Chiles IV of the Quattlebaum Grooms & Tull PLLC law firm in Little Rock.

“Throughout the litigation, Gerber took the position that the terms of the collective bargaining process should be honored, and Gerber believes that now,” Chiles said.

Overtime Rules
Attorney J. Bruce Cross of the Cross Gunter Witherspoon & Galchus firm in Little Rock said it might be some time before the Department of Labor’s overtime regulations are settled.

Cross, whose practice area includes employment issues, said President Donald Trump’s nominee for secretary of labor, R. Alexander Acosta, could modify the overtime rules if approved by the Senate.

And Cross said he thinks when a secretary of labor is confirmed, the Department of Labor “will come back with something that would be more acceptable to more people and have a better chance of being successful.”

In addition, whatever decision the 5th U.S. Circuit Court of Appeals makes on the overtime rules will probably be appealed to the U.S. Supreme Court, he said.

If the overtime rules had been implemented as proposed on Dec. 1, they were expected to award pay to 4.2 million Americans, about 50,000 of them in Arkansas, who previously wouldn’t have been eligible for it.

Kim, the attorney with Wright Lindsey Jennings, said that some of her clients had already made the changes to meet the requirement of the overtime rules before the injunction came down. Those employers are keeping the changes in place.

However, some of her clients who were moving toward making staffing changes put those on hold once the injunction was issued.

She advises her clients who have already adjusted employee salaries or statuses to keep them in place, Kim said.

“But, then, if employers who decided not to make any of the changes, … I think they may want to consider tracking the hours of any employees who may end up being reclassified just in case the rule is enforced retroactively,” Kim said.

Employers’ Strategies Differ
Last summer, St. Bernards Healthcare worked on its strategy for the looming overtime regulations.

It had two options, said Lori Smith, the health company’s vice president of human resources: Either increase the individual salaries or reclassify workers as nonexempt and pay them overtime.

She estimated that only about 50 employees out of about 3,000 needed the adjustment.

Even though the overtime rules weren’t expected to go into effect until Dec. 1, St. Bernards adjusted its employees’ status or pay on Oct. 1.

Some employees received a bump in pay so they could remain exempt, while others who were salaried employees became hourly workers. Those newly nonexempt employees now receive overtime pay when they previously didn’t, Smith said.

“It was really a benefit to our staff,” she said.

When the overtime rules were put on hold, St. Bernards kept the employment changes because of the benefits to the employees.

Smith said the estimated annual increase in payroll expense is $100,000.

Unity Health in Searcy took a different path. It decided to wait to see the final outcome of the overtime rule before making employee adjustments, which were estimated to cost the health care organization a little less than $100,000, said Stuart Hill, Unity Health’s vice president and treasurer.

He said some employees would not have been happy being moved from a salaried position to an hourly classification. “It was an employee satisfaction issue, and it was going to cost us extra dollars,” Hill said.

Minimum Wage Clarity
Last week, the Arkansas House passed a bill on a 92-0 vote to clarify the Minimum Wage Act in Arkansas. The bill was a response to the Arkansas Supreme Court opinion involving the Gerber workers.

In 2012, the workers filed a lawsuit in Sebastian County Circuit Court charging that they weren’t being paid for all the time they worked at the plant, which included putting on and taking off their protective clothes. The employees’ union and Gerber had agreed that the workers wouldn’t be paid for that time.

The state Supreme Court found, in a 4-3 decision issued on May 26, that the Arkansas Minimum Wage Act requires the workers to be paid for the time.

In a dissenting opinion, Justice Rhonda K. Wood wrote that the court’s decision means “the floodgates will open to litigation at the enormous cost to businesses in Arkansas.”

Steadman said he hadn’t heard of any lawsuits being filed as a result of the opinion.

Rep. Collins, however, said a few lawsuits had been filed.

Steadman said that Collins’ bill further muddies the water on the definition of what work is.

“If the Legislature had set out to define what work is, that would provide clarity for both employers and employees to know what’s work, what kind of activities you have to pay for,” he said.

And he said that might lead to more lawsuits. “Employees are still going to feel, rightly, that they’re being cheated if they’re forced to perform tasks that they’re not paid for,” Steadman said.

Collins thinks his bill is clear and is “the best that any human can come up with.” But a lawyer “makes money by creating discord and lack of clarity,” he said. “So if I’m a lawyer, that’s what I’m going to focus on: ‘Where are the seams and how do I pull them apart?’”

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