A fraud conspiracy complaint filed in federal court by the former chairman and one-time largest shareholder of Stone Bank has been dismissed.

James Barnes, who sought more than $4 million in damages, claimed he was pushed out of the bank that he helped launch seven years ago and was forced to sell his stake in the bank at below market pricing. According to his complaint in U.S. District Court in Little Rock, J.T. Compton orchestrated the scheme with the aid of his son and fellow board member, Kevin.

Other defendants were David Dunlap, a bank director; Marnie Oldner, CEO of Stone Bank; Nick Roach, president of the bank; and Stone Bancshares Inc., parent company of the $152 million-asset lender.

Judge Leon Holmes essentially ruled that Barnes failed to make his case and granted the defendants’ motion to dismiss.

Barnes alleged the deceptive scheme included unfulfilled promises to help restructure his bank loans and misrepresenting his business dealings at Stone Bank to federal regulators. On April 21, 2013, Barnes was removed as chairman in what he portrayed as a corporate coup by Compton, who replaced him.

Barnes resigned from the board of directors on Oct. 18, 2013, and 17 months later signed a consent order with the Office of the Comptroller of the Currency that prohibits his participation in banking. He also was fined $20,000.

According to the March 18, 2015, order, Barnes “committed reckless, unsafe or unsound practices and breached his fiduciary duties” to Stone Bank. His “actions caused loss to the bank, and he demonstrated personal dishonesty and a willful and continuing disregard for the bank’s safety and soundness.”

Two days after the OCC consent order, his James Barnes & Associates Inc. filed Chapter 12 bankruptcy listing $3 million in assets and $4 million in liabilities. Stone Bank holds more than $672,000 of debt connected with the bankruptcy petition.

Formerly known as Ozark Heritage, the bank spent five years working through an OCC consent order signed on Aug. 24, 2010. Hiring competent management and a laundry list of operational improvements were at the heart of that 38-page regulatory action.

In connection with that, the bank’s former president, Marvin Sutterfield, was fined $20,000 and cited for unsafe and unsound lending practices in 2012.

Stone Bank, Mountain View
Staff: 50
Full-Service Locations: Mountain View, White Hall and Little Rock
(All dollars in thousands)    

*Changed name from Ozark Heritage Bank
**Founded on the acquisition of the $11.7 million-asset First National Bank of Altheimer

Alice Wallace wasn’t your typical college student.

The North Little Rock woman attended Pulaski Technical College when she was in her late 50s, after she was laid off from her job at the Arkansas Municipal League in 2008. By 2014, Wallace left the community college with two business-related associate’s degrees and about $40,000 in debt.

The degrees didn’t help Wallace find permanent work, and in 2015, she filed for Chapter 7 bankruptcy liquidation. Nearly all of her debt was because of the student loans.

What sets Wallace, now 64, apart, however, is that she sued the U.S. Department of Education in U.S. Bankruptcy Court to discharge her student debt — and won.

“A very tiny, tiny fraction of people in bankruptcy who have student loan debt actually seek to get it discharged,” said Geoff Walsh, a staff attorney for the National Consumer Law Center in Boston, where one of his practice areas is consumer bankruptcy. “It’s a very discouraging, very expensive and very difficult process to go through.”

Generally, student loans aren’t discharged in bankruptcy, leaving borrowers with the debt after they’ve gone through the process. That could be a problem for the growing number of borrowers.

At the end of 2015, 44.2 million people in the United States had student loan debts, more than double the number of borrowers in 2004, according to the latest figures from the Federal Reserve Bank of New York. At the end of 2015, more than 4.7 million borrowers had defaulted on their loans.

The outstanding student loan debt is $1.3 trillion, about 30 percent more than total auto loan debt.

“Some people think this could be the new credit bubble that might burst,” said Tim Tarvin, associate professor of law at the University of Arkansas School of Law. “By nature, it’s all unsecured debt.”

And that’s cause for alarm because the average balance is getting bigger. The Federal Reserve Bank of New York reports that the number of borrowers who owe less than $10,000 fell slightly between 2014 and 2015, while the number of student loan borrowers who owe more than $100,000 increased 11.7 percent to 2 million.

In most cases, the loans are “backed by the full faith and credit of the U.S. government,” Tarvin said. “To my knowledge there has been no appropriation. It’s like Social Security. It’s just the pledge of the government to cover it.”

To shed the student loan debt in bankruptcy, the borrower has to show that the debt will cause an “undue hardship” for the debtor, Walsh said. And to prove that, the debtor has to show that the debt can’t be paid now, nor is it likely to be paid in the future.

“It’s a vague standard and it gives courts a lot of discretion,” Walsh said.

12 Student Loans
Even before Alice Wallace was laid off from her $25,000-a-year job in 2008, she struggled to make ends meet.

A lack of discretionary money meant she brought her lunch to work and didn’t go to the movies, according to her testimony in January 2016 in U.S. Bankruptcy Court. A transcript of the proceeding to have her student loan debt discharged was filed with the court. Arkansas Business couldn’t reach her for comment.

Wallace told U.S. Bankruptcy Judge Phyllis Jones, of the Eastern District of Arkansas, that she decided to return to school in January 2010 to start working on two degrees, one in accounting and the other in office technology.

She took out her first of 12 student loans beginning in September 2010. Without the loans, she said, she wouldn’t have been able to afford the classes.

Graduating didn’t seem to help her find permanent work. In May 2015, she filed for Chapter 7 bankruptcy, listing $45,000 in assets and $49,000 in debts.

To discharge the student loan debt, the borrower has to file a lawsuit in the bankruptcy case.

Wallace was represented by attorney Steven Davis of North Little Rock. But other debtors attempt to represent themselves, making it even more difficult to dismiss the student loan debt.

“Even if they might meet all the criteria, they would not know how to proceed and take care of this,” said Tarvin, the University of Arkansas professor.

Wallace asked that her student loan debts be discharged because she was in her 60s, continued to take medication after she survived cancer and couldn’t find a job.

Wallace also said she had squeezed all the money she could from her living expenses, leaving nothing to repay the loans.

Forgiveness Programs
During Wallace’s trial in January 2016, assistant U.S. Attorney Stacey McCord, who represented the U.S. Department of Education, said that Wallace didn’t take advantage of the income-based repayment options offered by the Department of Education.

In Wallace’s case, the payment would have been zero, and if her financial situation didn’t improve, in 25 years the loan would have been forgiven.

Walsh, of the National Consumer Law Center, said that option gives borrowers an affordable payment, but “it also means that you’re carrying around this very large debt burden pretty much for your whole life.”

Meanwhile, the interest on the loan is accruing.

“So you can get to be in your 50s and have this enormous loan,” Walsh said. “It’s way bigger than you started out with when you were 25-30.”

McCord, the assistant U.S. attorney, told Arkansas Business last week that the Department of Education’s position is the income repayment plan gives debtors the ability to handle their debt if they are struggling to make ends meet.

“Based on your income and the size of your family, your payments can be zero and over a number of years,” she said. The zero payments could remain in place until a borrower’s financial health improved.

Judge Jones, however, was troubled by the income-based repayment program in Wallace’s case. Wallace would be 88 when the loan was forgiven after 25 years, and the amount might be considered taxable income by the Internal Revenue Service. That would be “swapping the student loan debt for a tax debt,” Jones wrote in her opinion.

Jones also didn’t see the point of Wallace going through the repayment program.

“Adding any payment for the student loan, no matter how small, to Ms. Wallace’s monthly expenses would be futile,” Jones wrote. “Her income is and will more likely than not continue to be insufficient to pay any amount.”

On Sept. 15, Jones ruled that Wallace proved she had an undue hardship and the student loan debt, which at the time was $45,200, would be discharged.

Most Don’t Try
Walsh, of the National Consumer Law Center, said most people in bankruptcy don’t bother to get their student loan debt discharged because it’s expensive to litigate, and the debtors usually don’t have the money to pay the extra expense of filing a lawsuit against the Department of Education.

While the borrower’s other debts will be discharged in bankruptcy, the student loan debt will remain as an enforceable debt.

That means the student loan creditor could collect on the debt by garnishing wages (garnishment is usually capped at 25 percent of the debtor’s net take home pay), seizing the amount from the debtor’s bank account or taking property, Tarvin said.

Attorney Greg Niblock of Niblock & Associates of Stuttgart said that of the number of bankruptcies his firm handles, about 40 to 45 percent have student loan debt.

He said that most people know that student loan debts aren’t dischargeable.

Niblock said he tells his clients: “You shook the hands of the devil and he took your soul for collateral, and you aren’t getting it back until you pay him.”

Distribution of Student Loan Borrowers by Balance

Source: Federal Reserve Bank of New York Consumer Credit Panel/Equifax

An Oklahoma man who said his name was forged on a loan document is going after the notary who allegedly signed off on the paperwork. Will Grote of Bennington, Oklahoma, said someone forged his signature on a loan to buy two tanker trailers for nearly $160,000 in 2014, according to his lawsuit, filed in U.S. District Court in Fayetteville.

Grote blames the notary, Sabrina C. Cooper, and her employer, Arvest Bank of Fayetteville, for negligence for allegedly notarizing the documents when the signature wasn’t Grote’s.

Grote didn’t realize what had happened until he got a call from the lender, General Electric Capital Corp., according to Grote’s lawsuit, filed by Thomas Buchanan of Little Rock.

It turned out that an acquaintance of Grote forged his name, Buchanan told Whispers. Now the FBI is looking into the case, Buchanan said.

Grote said that a notary is supposed make sure of the identity of the signer of the documents.

In the meantime, Grote arranged to have the trailers returned and paid off the loan, resulting in a loss of more than $120,000, according to the lawsuit.

Grote is seeking an unspecified amount of damages.

An Arvest spokesman said the company doesn’t comment on pending litigation.

We at Arkansas Business have warned for a couple of years now that the student debt crisis is a bubble in the making with the potential to burst as powerfully and dangerously as the housing bubble.

Unafraid to be called Cassandra — and backed up by the statistics in our stories in these pages by Editor Gwen Moritz and Senior Editor Mark Friedman — we’ll repeat our prophecy: Pay attention, all. This tidal wave of unsecured debt could swamp the country’s still less-than-robust recovery.

Consider:

As the number of college students has leveled off and even started to decline, the number of people carrying student debt has increased and the typical size of those debts has inched up. People with any college debt tend to have more than ever — and even smaller balances can be overwhelming to an entry-level career.

Michael Moore, chief academic and operating officer of eVersity, the University of Arkansas System’s new all-online institution, put it this way:

“The people with the six-figure debt are the ones we worry least about. They are the ones who have gone to law school or medical school. But the ones we are actually more concerned about are the ones that are in the $50,000 range. And the highest default rates are less than $10,000.”

Education is like housing in that everyone needs it. Of course, not everyone needs 10,000 SF and a home theater any more than everyone needs a Ph.D. from Harvard. But when an unsophisticated, unwary population meets unscrupulous, or even just overly enthusiastic, lenders, bad things happen.

There’s a saying: “Would you rather be right, or happy?” Being right about a student debt-caused recession would carry absolutely no satisfaction. We’d much rather be happy.

A federal court judge on Tuesday sentenced former Fort Smith construction company owner Brandon Woodrome to 41 months in prison and three years of supervise released for bank and wire fraud.

Woodrome, 29, admitted to receiving more than $2.1 million from First Western Bank of Booneville and Rioux Capital of Austin, Texas, by submitting fraudulent invoices. In September, he waived indictment and pleaded guilty to one count each of bank and wire fraud.

For each charge, U.S. District Judge P.K. Holmes III sentenced Woodrome to 41 months, sentences that will run concurrently. The court did not impose a fine, but Woodrome must pay $2.3 million in restitution.

Woodrome had asked the court for a light sentence. In a filing last month, his attorney pointed out that Woodrome didn't prey on the elderly or needy people.

"There is no 'hole' where the money went: no gambling habit, no drugs, no fancy cars," according to the filing by Fort Smith attorney Matthew T. Horan. "Brandon got in over his head, panicked and made disastrous choices."

In 2013, Woodrome’s construction business, Behr LLC, had $10.3 million in revenue. In 2014, revenue plummeted to $6.6 million.

Horan said one of the key tipping points occurred in 2014 when the IRS said Woodrome owed $250,000. If it wasn’t paid in 30 days, the revenuers said they would slap a lien on his assets and accounts, effectively putting him out of business.

"Brandon made the fateful criminal decision to pay the IRS, indirectly using the line of credit he had legitimately opened with First Western Bank," Horan said.

Woodrome was never able to repay the money. In October, he described the fraud to Arkansas Business.

"What happened was our growth outpaced our actual sales," Woodrome said in an interview. "And instead of responding to a decline in sales by controlling overhead expenses, I just tried to push through and underbid projects. It compounded the problems."

Seven Cuban nationals living in south Florida were arrested Tuesday after a grand jury in Little Rock indicted them and three others on charges of running a nationwide scheme to steal $8.8 million from more than 7,000 taxpayers by impersonating IRS agents.

The indictment expands on one handed down last June against two of the defendants, Jeniffer Valerino Nuñez and Dennis Delgado Caballero, both of Miami — who collected fraudulent payments wired to locations all over the country — including 21 transactions in Arkansas. Nuñez and Caballero have been in federal custody since May 2016.

"This fraud scheme has victimized thousands of innocent people all across the country, including a number of citizens here in Arkansas," Patrick C. Harris, Acting U.S. Attorney for the Eastern District of Arkansas, said in a news release announcing Tuesday's arrests and the new indictments.

"These defendants pretended to be government employees and scared victims with spurious threats of legal action and imprisonment, and in doing so sought to take advantage of the most vulnerable among us," he said. "This indictment reflects our commitment to protecting our citizens from fraud, and holding accountable those who steal from honest citizens."

The defendants are accused of pretending to be IRS employees when they called and threatened victims with legal action or arrest for unpaid taxes. They persuaded the victims to wire money to various locations using MoneyGram, Walmart-2-Walmart or other services.

The 21 Arkansas transaction included in the indictment total about $120,000 and came from victims in a dozen different states.

The seven Florida residents arrested Tuesday were Angel Chapotin Carrillo, 42, Ricardo Fontanella Caballero, 25, and Yosvany Padilla, 26, all of Hialeah; Elio Carballo Cruz, 40, Esequiel Bravo Diaz, 23, and Alfredo Echevarria Rios, 43, all of Miami; and Alejandro Valdes, 25, of West Palm Beach. 

The eighth new defendant, Lazaro Hernandez Fleitas, 34, of Orlando, remained at large.

As the owner of a CPA practice, I’m always interested in the daily detail and take the time to communicate with my staff from the ground up on ways to improve our tax practice and service to our clients.

Recently, there has been a lot of presidential rhetoric about major tax reform in the scope of what occurred during the Reagan years. From an accounting standpoint, sometimes complexity can be resolved with simplicity. As I learned in law school, income taxation is a consortium of social policies — not a rigid set of rules for tax collections.

As April 18 has come and gone and we begin to prepare almost immediately for April 2018, I thought some suggestions to our congressmen of a few tweaks to the tax code in the name of simplicity might get us on down the road quicker and result in a more sociable equitable tax code for my constituents, the small business owners. Here are six steps to consider that follow good social policy, and that I would hope lawmakers would agree are worth implementing:

Step 1: Follow the social policy of helping working families, namely two-wage earning family members, and allow them to file their returns on the same return and start at zero income and tax, and then pay tax on graduated income and rates. This effectively gets rid of stacking one spouse’s income on top of another and allows each spouse to pay tax on his or her respective income if it’s more advantageous. This step is the simplest and reaches the largest segment of the tax base, our dual income, working families. They’re the backbone of society and currently bear an undue amount of taxes and paperwork. A bonus for Arkansans, this is how we calculate our Arkansas individual income tax.

Step 2: Providing further education (after high school graduation) is another sound social policy. Allow a full tax deduction by the parent or student (with a high school diploma) for ALL out-of-pocket educational expenditures. This extended deduction should cover ALL additional education in the form of technical training, serving apprenticeships, or college and university schooling. As we all know, more educated or trained individuals create higher wage earners (and tax paying) individuals.

Step 3: Eliminate any and all limitations on itemized medical deductions. It is sound social policy to have a healthy society. Medical expense either for treatment or prevention of physical or mental diseases should be fully deductible and not subject to floor limitations. With the boomer generation aging out, if income is spent on medical care, why not allow it to be fully deducted and not subjected to income tax? I have yet to meet anyone who has been able to save his or her way to good health. Changing the perception that medical treatment is an investment and not an expense can change the overall health and wealth of our society.

Step 4: Eliminate limitations on charitable giving. Charitable giving is good social policy for individuals and for society. If an individual wants to donate more than 50 percent of his or her adjusted gross income in a year to a charitable cause, they should be allowed to do so and to fully deduct the donation against their income earned for the year. The more we are encouraged to help those around us, the less help will be needed in the future from government programs and the required tax revenues to fund those programs.

Step 5: Provide for one graduated tax structure for all taxpayers. This can be done in a series of smaller steps:

1. Eliminate the Alternative Minimum Tax. If the tax rate structure is graduated, then leave it graduated and eliminate the flat rate tax from the tax structure. The most common AMT added back to income is state income tax. If an individual pays it, allow the deduction.
2. Reinstate the 10 percent Investment Tax Credit for all purchases of IRC 1245 type property, namely business vehicles, equipment and furniture and fixtures. Allow the credit to reduce tax liability dollar for dollar, and allow for carry backs and carry forwards for unused amounts.
3. Stop limiting capital losses on the sale or exchange of a capital asset. I have been practicing for 40 years and for the life of me I have never understood the practice of limiting capital losses on the sale or exchange of a capital asset. If you have a graduated tax system for income and tax rates, why do you cut the capital loss off at the pass, and say “No, you cannot deduct this loss against your other income even though you have incurred a tax loss"? It has been around since I have started practicing and I still don’t get it.

Step 6: Eliminate the limit on passive type losses and the limit of their deductibility against income earned, which is then subjected to higher graduated rates. The tax system is a graduated rate and income driven, but then kicks out certain types of losses and taxes the remaining income at higher rates. If the passive loss limitation were removed from the graduated tax system, then wouldn’t it serve as sound social policy to encourage investment in real estate property? If you change the depreciable lives of commercial real estate buildings and structures to 15 years, it would encourage real estate investment, the economy would grow and additional tax revenues would be collected.  

Over the next several months, and possibly years, I am certain that tax reform and discussion will continue with a positive outcome for those of us who pay all the taxes. Regardless of the level of change, it might be good social practice to start small, with the steps above. Any headway is progress. However, should our political leaders achieve a large scale overhaul, rest assured I will be more than excited to learn about the new changes and assist my clients in preparing their returns.

WASHINGTON — Fewer consumers signed contracts to buy U.S. homes last month as the spring buying season revs up with stiff competition for homes amid lagging inventory.

The National Association of Realtors said Thursday that its pending home sales index slipped 0.8 percent to 111.4 in March, from 112.3 in February.

Lawrence Yun, chief economist for the Realtors, said that even with the dearth of inventory, activity was still strong enough to be the third best in the past year. He said the low supply of homes could mean higher prices in the months ahead.

"Sellers are in the driver's seat this spring as the intense competition for the few homes for sale is forcing many buyers to be aggressive in their offers," Yun said.

The Realtors reported last week that Americans had purchased homes in March at the fastest pace in over a decade, as more people seek to close deals with home prices on the rise.

Although they had ticked down the past few weeks, average interest rates on a typical 30-year mortgage are back over 4 percent again. Rates are expected to continue to rise from last year's record lows, another reason people are eager to buy. The bad news for buyers is that the number of houses for sale has dropped to its lowest level in nearly 20 years.

Regionally, only the South saw an increase in signed contracts last month, up 2.9 percent. Signed contracts in the Northeast and West both declined 2.9 percent. The Midwest saw a 1.2 percent decline.

Pending sales contracts are a barometer of future purchases. A sale is typically completed a month or two after a contract is signed.

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

Richard W. “Skip” Colvin has joined Arvest Bank as community bank president for Conway and Morrilton. As community bank president, Colvin is charged with formulating a hierarchy of objectives and standards of performance, strategies, plans and budgets, among other responsibilities.

“We are thrilled to have Skip join the Arvest family,” Jim Cargill, president and CEO of Arvest in central Arkansas, said. “He is a seasoned banker and, more importantly, he is focused on his community.”

Colvin has spent the past 12 years in the financial services industry, most recently serving as city president for a regional bank in Texarkana. Prior to that, he held several positions, including director of finance at CenterPoint Energy in Houston. Additionally, he has experience leading organizations such as the Texarkana Chamber of Commerce and its Economic Development Council and the Lions Club.

Colvin earned a Bachelor of Applied Arts & Sciences with emphasis in marketing management at Texas A&M University-Texarkana and currently is a candidate at Southern Methodist University’s Southwest Graduate School of Banking as well as the Grace School of Theology in Houston.

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

A retail building in west Little Rock tipped the scales at $4.01 million.

Beefam LLC and Bonerts MV LLC of Santa Ana, California, acquired the 7,457-SF project at 17701 Chenal Parkway, home to Pei Wei and Mattress Firm. The seller is Promenade at Chenal Lot 3 LLC, an affiliate of Thompson Thrift Development Inc. of Terre Haute, Indiana.

The deal is financed with a 10-year loan of $2.95 million from Arvest Bank of Fayetteville. The 1.47-acre development previously was tied to an October 2015 mortgage of $2.36 million held by Old National Bank of Evansville, Indiana.

The location was bought for $925,000 19 months ago from Red Little Rock Land LLC of Overland Park, Kansas.

Parking Purchase
A parking lot in downtown Little Rock weighed in at $2.1 million.

Scion Investments LLC, led by Reed Lynch, purchased the 0.96-acre property on the east side of Broadway between Third and Fourth streets. The seller is 301 South Broadway LLC, led by the S. Gene Cauley Irrevocable Trust.

South Broadway carried $1.7 million of the purchase price. The property previously was linked with a June 2008 mortgage of $1.2 million held by First Security Bank of Searcy.

The property was acquired for $1.7 million in June 2008 from Little Rock’s Bank of the Ozarks.

Crest Acquisition
An undeveloped 10-acre parcel in west Little Rock changed hands in a $1.03 million transaction.

Crest at Chenal LLC, led by Larry Crain Jr., bought the land near the southwest corner of Chenal Parkway and Northfield Drive. The seller is the Presbytery of Arkansas.

The deal is backed with a two-year loan of $824,000 from First Security Bank. The land previously was tied to a pair of December 2014 mortgages totaling $1 million held by BancorpSouth Bank of Tupelo, Mississippi.

The property was purchased for $262,000 in August 1991 from Deltic Farm & Timber Co. of El Dorado.

Rural Acreage
About 41 acres in west Pulaski County is under new ownership after an $800,000 transaction. Aaron Gamewell and Nola Proctor acquired the property nearly 3 miles west of Ferndale from the John & Carolyn Russell Family Trust.

The deal is funded with a one-year loan of $400,000 from Relyance Bank of Pine Bluff. The property was assembled in four deals totaling $181,400.

The sellers were Barbara Pride Whitfield, $81,600 in February 2000; the Paul R. Pride Revocable Trust, $27,300 in February 2000; Judy Hampton, $7,500 in March 2001; and Walter and Nancy Dunn, $65,000 in February 2011.

Industrial Land
Land on the southern edge of the Little Rock Port Industrial Park rang up a $357,500 sale.

Bevans Family Ltd., led by James Shipman, purchased 11 acres at the northwest corner of Zeuber and Thibault roads.

The sellers are the Barbara & George Beene Joint Revocable Trust, Mary McKinnon Biondo Joint Revocable Trust, William W. Crawford, Bobby Fewell Revocable Trust, Glenda Shannon Fewell Family Trust, Thomas I. Koike & Kay K. Koike Trust, Louis Anthony Renaud, Georganne R. Freasier Revocable Trust, Jerome Sherman, Anthony and Myrtle DiPietro, John Meadors, Robert Watkins and Matthew and Grant Williams.

The property was acquired for $105,308 in December 1979 from Mary Toney.

Alignment Buy
A 3,068-SF commercial building in North Little Rock drew a $260,000 transaction.

Alignment Properties LLC, led by Kristin and John Clark, bought the former Wooldridge Photography project at 5307 JFK Blvd. from Tim Wooldridge.

The deal is financed with a 15-year loan of $208,000 from Regions Bank of Birmingham, Alabama.

A 0.4-acre development previously was linked with a January 2011 mortgage of $229,000 held by One Bank & Trust of Little Rock.

Wooldridge purchased the property for $155,000 in March 2001 from Scott and Connie Scherz.

Multifamily Deal
A four-unit apartment building in Sherwood sold for $200,000.

Hadir Orkibi acquired the 202-208 Cherrie Ave. project from TNT KLATR LLC, led by Zeke Tanner.

The deal is backed with a 30-year loan of $159,375 from Caliber Home Loans Inc. of Irving, Texas.

The 0.33-acre development previously was tied to a July 2014 mortgage of $185,000 held by Eagle Bank & Trust of Little Rock.

The property was bought for $205,000 nearly three years ago from Kenneth Rhone.

Sologne Manor
A 7,099-SF home in the Sologne Circle neighborhood of west Little Rock’s Chenal Valley development tipped the scales at $1.21 million.

The RAL Revocable Trust, led by Marilyn Rene Nauman, purchased the house from the Lowell Steven Jumper & Sheila Dianne Jumper Revocable Trust.

The Jumpers acquired the property for $400,000 in March 2007 from J&J Family Ltd., led by Richard E. Jones.

Orle Residence
A 5,751-SF home in the Orle Circle neighborhood of west Little Rock’s Chenal Valley development changed hands in a $752,000 sale.

James and Virginia Hill bought the house from Robert and Shanon Greer. The deal is funded with a five-year loan of $675,000 from Citizens Bank of Batesville.

The residence previously was linked with a March 2015 mortgage of $417,000 held by First Security Bank.

The location was purchased for $132,000 in December 2007 from Deltic Timber Corp. of El Dorado.

Woodland’s Abode
A 3,180-SF home in west Little Rock’s Woodland’s Edge neighborhood is under new ownership after a $636,000 transaction.

Virginia Mullins acquired the house from Duston Hennard Homes Inc. The deal is financed with a 30-year loan of $325,000 from Simmons Bank of Pine Bluff.

The residence previously was tied to an October 2015 mortgage of $365,000 held by the bank.

The site was bought for $79,000 19 months ago from Rocket Properties LLC, led by Ron Tyne and Lisenne Rockefeller.

Bell Pointe House
A 3,903-SF home in west Little Rock’s Belle Pointe neighborhood rang up a $540,000 sale.

Nahel Saied purchased the house from Liudmila Schafer. The deal is backed with a 15-year loan of $424,400 from Eagle Bank & Trust of Little Rock.

The residence previously was linked with a pair of mortgages totaling $577,000 held by Arkansas Federal Credit Union of Jacksonville.

The property was acquired for $607,000 in December 2012 from the Paul W. Stout Revocable Trust.

Osage Falls Home
A 4,725-SF home in Maumelle’s Osage Falls neighborhood drew a $525,000 transaction.

Dorman Reed bought the house from the Jonathan G. Young & Karen A. Young Trust No. 1. The deal is funded with a 30-year loan of $375,000 from Quicken Loans Inc. of Detroit.

The location was purchased for $95,000 in October 2010 from Wanda Carroll.

Miramar Dwelling
A 4,000-SF home in the Miramar Place neighborhood of west Little Rock’s Chenal Valley development sold for $506,361.

Brent and Kristi Robinson acquired the house from WI Properties LLC, led by Todd Witham.

The location was bought for $89,000 in December 2014 from Deltic Timber Corp. of El Dorado.

Pulaski County Judge Barry Hyde calls PACE financing a home run, something that makes “a lot of sense to a lot of people.” U.S. Sen. Tom Cotton calls PACE a scam to “trick seniors into taking out high-interest loans for 20 years, along with liens on their homes.”

Cotton has targeted Property Assessed Clean Energy financing in new federal legislation co-sponsored by Sen. John Boozman, his fellow Arkansas Republican, and Sen. Marco Rubio, R-Fla.

Cotton and Hyde agree on one thing about PACE — that it’s a relatively new financing mechanism that lets property owners borrow up to 100 percent of the cost of weatherization, energy-efficiency features and renewable energy upgrades like solar panels, with the government collecting the payments as part of property tax bills.

Beyond that basic definition, though, the two public officials might be describing two different creatures — one a beauty, the other a beast. Actually, they are talking about different species of PACE. The program Hyde promotes in Arkansas currently involves only commercial properties and has not been controversial. The programs Cotton is targeting nationally are residential efforts that even PACE-related companies admit need more scrutiny.

In Arkansas, PACE is for now offered only to commercial and industrial property owners, who have used it to finance efficiency projects in central Arkansas and in Fayetteville and Springdale. Cotton says his legislation will have no effect here, but PACE leaders disagree.

They fear that the bill will impose a huge regulatory burden, cripple growth and essentially kill their efforts to extend residential PACE to the state.

They also see Cotton’s language as incendiary.

“Residential PACE loans are a scam. Predatory green-energy lenders are changing state and local laws,” said a statement from Cotton, whose Protecting Americans from Credit Exploitation Act (incorporating PACE into its own acronym) would classify PACE deals as loans and make them subject to federal Truth in Lending Act requirements. Cotton says his bill’s disclosure rules would “reduce the advantage that PACE loan sharks have over hard-working Americans.”

California and Florida homeowners have indeed reported incidents of abuse, describing contractors who drummed up business by selling them on poorly explained 20-year payback plans with interest rates of up to 10, 11 or 12 percent. Informed that the property assessment attaches to the property, not to themselves, borrowers say they increased their property tax load without realizing that tax encumbrances might make it difficult to sell their houses.

Many of these borrowers “will eventually be at risk of foreclosure,” according to an assessment by Elder Law and Advocacy of San Diego, a prospect that it called “terrible at any age put especially egregious for an 80-year-old with minimal resources.” It cited loans carrying interest above 10 percent along with fees of 7 percent.

PACE defenders say that despite some clear abuses, complaints are relatively rare. While they support more disclosure and efforts to weed out exploitative companies, they also say the cure in Cotton’s bill, introduced in the Senate on April 5, is worse than the disease.

Lien Rights an Issue
Cotton and his aides say commercial programs in Arkansas have nothing to fear, even as they argue that PACE financing should logically be considered as loans. But Will Gruber, a lawyer for Pulaski County, and PACE official Frank Mayfield insist that assessments have long been legally distinct from loans.

They also suggest that Cotton and his co-sponsors are carrying water for the mortgage banking industry, which objects to the fact that PACE repayments, tied to tax lien powers, take precedence over mortgages and home equity loans in foreclosure cases.

“They’re concerned about the lien rights and priority,” said Mayfield, chairman of Energy Improvement District No. 1, covering Fayetteville and Springdale. (PACE financing is made possible through energy improvement districts, entities similar to improvement districts that finance things like sewer systems, sidewalks and streetlights.) “The mortgage bankers insist on calling these loans, but that’s not accurate.”

An aide to Cotton speaking on background told Arkansas Business that PACE arrangements are loans and should be subject to Truth in Lending, and that no other kinds of loans that come after a mortgage are paid first.

A letter to Cotton, Boozman and Rubio from the American Bankers Association, the Arkansas Land Title Association and the Mortgage Bankers Association of Arkansas, among others, laments that a patchwork of local and state laws “do not treat PACE loans like the mortgage financing products they are” and do not apply “the Consumer Financial Protection Bureau’s ‘Ability to Repay’ and ‘Know Before You Owe’ rules.”

Mayfield countered by saying that applying the Truth in Lending Act would redefine PACE boards as mortgage lenders and saddle them with 1,000 pages of burdensome regulations.

“We agree with Sen. Cotton that common-sense consumer protection is absolutely required,” Mayfield said. But he described PACE in Arkansas as a local program overseen by citizens on the improvement boards, along with professional administrators who make sure that each project meets specific payback requirements and that energy savings provide “positive cash flow to building owners.” He said the new requirements would mean PACE leaders would have to “lawyer up to figure out what we have to do.”

While the residential abuse stories focus on interest rates of up 10, 11 or even 12 percent, the interest rate was 6.5 percent for the largest commercial project yet in Arkansas, almost $650,000 worth of heating and air, water and electricity-conserving fixtures and a “green” reflective roof at a $6.5 million 50-unit apartment complex under construction on Aldersgate Road in Little Rock.

Gruber, the attorney for Pulaski County, noted that state law does authorize residential PACE, even though current programs are strictly commercial and industrial. The law “requires protections against the very problems the senators imply occur in other jurisdictions,” Gruber wrote by email. “We’ve successfully avoided the pitfalls without unnecessarily burdening companies competing in the PACE market.”

Those companies include PACE Arkansas, an affiliate of PACE Equity of Milwaukee, which provided financing for the energy efficiency features at the Aldersgate apartment complex.

“We’re disappointed that, to the best of our knowledge, neither senator representing Arkansas reached out to Arkansas’ PACE stakeholders,” Gruber said, offering Pulaski County’s expertise.

Cotton’s staff said the senator had talked to various people to ensure that his bill would not have an impact in Arkansas. But they said Cotton has an obligation to all Americans. “Senator Cotton’s role on the Senate Banking, Housing & Urban Affairs Committee spurred his interest and led him to take action on PACE problems beyond Arkansas,” said Caroline Rabbitt, his communications director.

Cotton’s team drew a distinction between sophisticated businesspeople taking advantage of the Arkansas commercial program and the poorer and often elderly homeowners who feel misled by residential PACE in Florida and California. While a business executive might easily see an 11 percent loan over 20 years as a bad deal, residential borrowers were susceptible to vague promises and dubious websites that Truth in Lending would curtail, staffers say. Some borrowers didn’t realize that they were allowing a lien on their houses, or that they could lose their homes in a default.

Those problems may not exist in Arkansas, but Cotton wanted to be proactive, Rabbitt said.

The senator also disagrees with a 2016 decision by the Department of Housing & Urban Development, which will allow the Federal Housing Administration to insure mortgages that also carry liens from PACE financing as long as FHA loans keep their priority status. The prospect of the government being stuck with the aftermath of PACE deals gone bad adds a taxpayer protection element to Cotton’s mission, staff members said.

The bottom line, Cotton believes, is that Americans should get the same disclosures about PACE financing as they do about loans. One staff member pointed out that Truth in Lending requirements apply to everything from pawn shop loans to large mortgages. If Americans could be assured of those protections in PACE cases, Cotton says, they can make their own informed choices.

Subprime Parallel Seen
Some financial analysts have seen a parallel between rapid growth in PACE financing and the conditions that led to the subprime crisis of 2008. Surging PACE numbers have whetted investors’ interest in bonds created from bundling the debt obligations.

The value of securitized residential PACE obligations has grown to nearly $3 billion nationwide, with one company, Ygrene, leading the way with $479 million in projects, according to PACENation, a trade and promotion group. Residential PACE financing grew from just $500 million in 2014 to some $3.4 billion last year, with programs up and running in 34 states.

The Arkansas Legislature enabled PACE in 2013, and the law signed by Gov. Mike Beebe allowed cities, counties and the state to create energy improvement districts. In the legislative session that ended last month, a bill to make the state’s PACE law language correspond more favorably with other states’ programs died in committee, signaling to PACE backers that more work is left to be done.

“We are going to go back at it,” Mayfield said. “While residential PACE has yet to happen in Arkansas, I am hopeful that with experience in the commercial sector and collaboration with the banking industry, our state will soon enjoy the benefits of reduced energy expenses and creating good jobs going forward.”

Mayfield agreed that more must be learned about how PACE finance affects the buying and selling of upgraded houses, and he hopes to apply research being conducted now to residential PACE programs should they come to the state.

Cotton wants protection for all, Rabbitt says. “He believes these lending arrangements are loans and should have the same disclosure as any other loan, especially given the lengthy terms and home liens.”

How PACE Works

→ A state enacts legislation authorizing the establishment of a PACE program. In Arkansas, enabling legislation was passed in 2013.

→ A local government creates a PACE program. Two have been established in Arkansas, but they are both commercial programs rather than residential.

→ A homeowner or commercial building owner identifies energy improvements to implement and applies for PACE financing.

→ The PACE administrator approves the financing arrangement and the jurisdiction assigns a tax assessment to the property.

→ The homeowner or business completes the approved energy improvements.

→ The property owner repays the cost of the improvements, plus interest, over time through a tax assessment on the property tax bill.

Wal-Mart Stores Inc. will have its blowout shareholders’ meeting on June 2 in Fayetteville at the University of Arkansas’ Bud Walton Arena, as usual. On April 20, Home BancShares Inc. had its usual gathering for shareholders, which might be better described as a party, at Centennial Valley Golf & Country Club in Conway.

But one shareholder tradition quietly disappeared this year: Simmons First National Corp.’s annual banquet at the Pine Bluff Convention Center, catered by the Pine Bluff Country Club and often featuring background music by the Pine Bluff High School symphony, is no more.

Instead, the parent company of Simmons Bank held what spokesman Rex Nelson called “a short morning meeting” on April 19 at the headquarters building on Main Street in Pine Bluff.

When asked if this kind of shareholders’ meeting — which is really the rule among most public companies — is the new normal, Nelson responded, “Yes.”

Speaking of HBI
In conjunction with its annual meeting, Home BancShares added two new members to its board, including its first woman director.

She is Karen Garrett, managing partner of Hudson Cisne & Co. LLP, the Little Rock CPA firm.

The other new member is Jim Rankin Jr., president of Trinity Development Co. and Four Winds Inc., family-owned real estate development and management companies in Faulkner County.

Remember the court-ordered sale of controlling interest in Little Rock’s One Bank & Trust we told you about three weeks ago?

A date is now set for the event that will bring a change of ownership to the $305 million-asset bank: May 8, 10 a.m., Eastern Standard Time at the Marshals Service office at the federal courthouse in Washington, D.C.

Standing first in line with a potential credit bid of up to $47.9 million is the United States of America.

That dollar figure represents the balance of a triple-damage judgment tied to a TARP funding fraud claim by the Department of the Treasury.

Up for sale are the 344,577 shares held by the bank’s insolvent holding company, OneFinancial Corp.

The shares represent a 99 percent stake in the struggling bank, which hasn’t turned a normal quarterly profit in nigh on five years.

The stock has been held in escrow since it was seized by U.S. marshals on Nov. 3, 2015. The seizure was made in advance of Treasury obtaining its massive default judgment against OneFinancial on Jan. 11, 2016.

Several parties have expressed interest in One Bank: Bank of England; First Financial Banc Corp., parent company of El Dorado’s First Financial Bank; EJF Capital LLC of Arlington, Virginia; Home BancShares Inc. of Conway; and Arvest Bank of Fayetteville.

One Bank’s deteriorating equity capital stood at $12 million at year’s end.

SERP Exposure?

Meanwhile in Pulaski County Circuit Court, current and former One Bank execs continue their dispute.

Recent activity has focused on a $1.5 million claim against the bank and its Supplemental Executive Retirement Plan by Tom Whitehead, former chief financial officer at One Bank.

Jerry Pavlas, the bank’s CEO since September 2012, claims Whitehead forfeited his SERP benefits when he was fired “for just cause” on Dec. 27, 2012.

Whitehead countered One Bank’s motion for partial summary judgment with several points: 1) the plan falls under state law, not federal law, 2) there is no mandatory arbitration clause to resolve the dispute and 3) the agreement contains language allowing payment of his fully vested SERP benefits no matter how or why his employment was terminated.

Whitehead also indirectly called out Pavlas for blaming him for the actions mandated and directed by the bank’s super shareholder, Layton “Scooter” Stuart, and condoned by its board of directors and senior management.

Whitehead, who remains without criminal charge, took exception to the “just cause” argument and the bank’s persistent criminal verbiage directed at him.

In his brief, Whitehead said the bank’s recounting of “undisputed facts” fails to state the seminal fact that he had no more discretion “or involvement in what Stuart, the board of directors and the senior management did or approved of Stuart doing in terms of what had been going on at the bank before Stuart was removed than Simon of Cyrene had when the Romans made him carry the cross of Jesus as Jesus was led away to his crucifixion.”

Ryan Watley has been named CEO-elect of Go Forward Pine Bluff, a volunteer group backed by Simmons First National Corp. that aims to stop the city's population decline and bolster its tax base.

Watley, 30, is an assistant professor of chemistry and the assistant director of development for athletics at the University of Arkansas at Pine Bluff. At Go Forward Pine Bluff, he'll be responsible for coordinating with city officials and other organizations to execute Go Forward's plan.

Founded in 2015, Go Forward Pine Bluff is a 100-volunteer group financed by Simmons First National Corp. and led by former CEO Tommy May and Simmons First Foundation board member Mary Pringos. The group has announced an ambitious plan of 27 proposals to revive a city marred by a crumbling downtown, sagging economy and crime.

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. The vote is set for June 13.

Watley's CEO position is contingent upon voter approval of the tax. 

"Dr. Watley is the perfect person to oversee our efforts," May said in a news release. "This is Pine Bluff's best opportunity to attract businesses and ensure a promising future for our young people. We've seen the city's population decline from 57,140 in 1990 to 44,772 in 2015. We must act now."

A Pine Bluff native who returned to the city to work for UAPB in 2015, Watley played football and majored in chemistry at the university and graduated with a bachelor of science degree in 2009. He then received his doctorate in organic chemistry from the University of Oklahoma. 

During his time in Oklahoma, Watley was a postdoctoral fellow in the Department of Pharmaceutical Sciences and a research associate in the Organic Chemistry Division. In 2015, he was the assistant to the athletic director for community outreach and fundraising at Rose State College in Midwest City, Oklahoma.

Watley said this CEO role "requires a keen focus on execution," and that he's "established a reputation of producing results."

"I am thankful to my supervisors and the chancellor of UAPB for allowing me to explore this opportunity," Watley told Arkansas Business in an email. 

"I am very entrenched in the operations of campus and this was not an easy decision for me," he siad. "However I have a relationship with Mayor [Shirley] Washington and believe in what she wants to accomplish. I envision myself working for Mayor Washington while satisfying the corporation's board desire for timely and effective results. We should all be confident in this multifaceted operation because the foundation has been laid that we are one Pine Bluff, stronger together."

WASHINGTON — Republicans on Tuesday cast former President Barack Obama's law overhauling the nation's financial rules as an obstacle to economic growth as a House panel launched a marathon session to undo much of the Wall Street regulations.

The Financial Services Committee, led by Texas Rep. Jeb Hensarling, started the painstaking work of crafting legislation that would repeal about 40 provisions of the Dodd-Frank law that Congress pass and Obama signed in 2010 after the financial meltdown two years earlier.

"Regrettably, thanks to Dodd-Frank, too many garages in our nation are full of old cars instead of new startup small business," Hensarling said. "It's time for the bailouts to end. It's time to help small businesses on Main Street."

U.S. Rep. French Hill, R-Ark., is a member of the committee.

Democrats accused the GOP of amnesia about what led to the meltdown that pushed the economy to near collapse. They said Hensarling's bill would gut consumer protection and allow banks to make the kind of risky investments that required taxpayers to come to the rescue of the nation's largest financial institutions nearly a decade ago.

"It's an invitation for another Great Recession or worse," said Rep. Maxine Waters, D-Calif.

The 2010 Dodd-Frank law put the stiffest restrictions on banks and Wall Street since the 1930s Depression. It clamped down on banking practices and expanded consumer protections to restrain reckless conduct by financial firms and prevent a repeat of the 2008 meltdown.

Hensarling's bill targets the heart of the law's restrictions on banks by offering a trade-off: Banks could qualify for most of the regulatory relief in the bill so long as they meet a strict basic requirement for building capital to cover unexpected big losses. He says the capital requirements will work as an insurance policy against a financial institution going out of business.

Republicans are likely to pass the measure in the House. But the bill faces significant obstacles in the Senate where leaders have emphasized their desire to find areas of agreement to enhance economic growth.

Hensarling also targets the consumer protection agency that Congress established after the financial crisis, the Consumer Financial Protection Bureau, reducing its powers and making it easier for the president to remove its director.

Democratic lawmakers referred to Hensarling's legislation as a Wall Street deregulation wish-list. Rep. Michael Capuano, D-Mass., said Republicans could have written a much narrower bill to help small banks and credit unions if that were their primary aim. Instead, he said they put together a bill for "Wall Street fat cats."

Republican Rep. Bill Huizenga of Michigan accused Democrats of engaging in hyperbole "at an insane level." And Rep. Bill Posey, R-Fla., said Dodd-Frank has harmed every small local bank and credit union in his congressional district.

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

WASHINGTON — A House panel approved legislation Thursday that would undo much of the Dodd-Frank law enacted after the 2008 economic meltdown.

The bill cleared the Republican-led House Financial Services Committee by a vote of 34-26.

Republicans argue the law passed under President Barack Obama is slowing economic growth because of the cost of compliance and by curbing lending.

Democrats warn the GOP bill will create the same conditions that led to the financial crisis and pushed the economy to the brink of collapse.

The bill now goes to the full House for a vote, but supporters admit that the path will be much more difficult in the Senate, where Democratic support will be needed.

In a fast-moving session following two days of laborious debate, the panel flew through a series of votes on amendments, as the majority Republicans easily beat back Democrats' attempts to reshape and soften the legislation.

The action moved House Republicans closer to realizing their long-promised goal to undo financial regulatory laws enacted under Obama after the 2008 economic meltdown pushed the economy to the brink of collapse.

The bill would repeal about 40 provisions of the Dodd-Frank Act. Banks could qualify for much of the regulatory relief in the bill so long as they meet a strict basic requirement for building capital to cover unexpected big losses.

Republicans, led by Rep. Jeb Hensarling, the GOP chairman of the House Financial Services Committee, have argued that community banks and credit unions are struggling to keep up with the regulatory burdens imposed by the law.

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

Jared Carver has been named a financial analyst for Stone Bank in Little Rock.

He was previously a financial analyst for Frost PLLC in Little Rock and with the Hendrix College business office in Conway.

Tim Quillin has been chosen to lead a new 401(k) advisory practice launched by Aptus Financial in Little Rock.

He previously was an analyst for the Circumference Group, also in Little Rock.

Gary Canada Sr. and Hanna Canada, both of the Bank of England, recently received the BKD Milestones in Banking Award from the Arkansas Bankers Association for 50 years of service to the industry.

Milestones awards for 40 years of service were presented to the following:

• Valerie Cook, Mary Cox, Carolyn Eckman, Kathy Kinion, Ernie Penn, Diana Rhoads and Lola Roberts of Arvest Bank
• Carolyn Boone, Alan Dunsworth, Vicky Hansen, Bob King and Dolores Snider of the Bank of Fayetteville (branches of Farmers & Merchants Bank)
• Becky Burroughs, Cathey Cox, Gynelle Linder and George Penick of Eagle Bank & Trust
• Cindy Juhl and Le Ann Krisell of Farmers & Merchants Bank
• Gary Clark and Martha Hunt of Fidelity National Bank
• Rhonda Boen and Janice Townsend of First Security Bank
• Phyllis “Ceci” Bettell of Arkansas County Bank
• Beth Dildine of Cross County Bank
• I. Joe Miles of Integrity First Bank
• Jill McClinton of Peoples Bank
• John Garrison of Relyance Bank
• Sharon Wilson of River Town Bank

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

Construction projects are flourishing in Jonesboro, despite the financial woes plaguing one of its largest commercial ventures.

Inside the city limits, $164 million worth of construction is in motion, led by St. Bernards Medical Center in downtown Jonesboro. And more projects are on the way.

Construction is expected to start soon on the $60 million Embassy Suites and Red Wolf Convention Center on the campus of Arkansas State University, Tim O’Reilly, CEO of O’Reilly Hospitality Management of Springfield, Missouri, said in an email to Arkansas Business last week. “We are waiting for the building permit which we will have any day,” he wrote.

The project is expected to take 14-15 months to complete. It will feature a 202-room Embassy Suites hotel, 40,000-SF Red Wolf Convention Center and Houlihan’s restaurant. Killian Construction Co. of Springfield, Missouri, is the general contractor. The project is scheduled to open before the start of the fall 2018 semester at the college.

The other convention center project in Jonesboro, however, is struggling and has been hit with a number of contractor’s liens and lawsuits.

Other projects in Jonesboro are doing better. St. Bernards Medical Center recently completed its $7.35 million Ben E. Owens Cancer Center addition and renovation project, said Kevin Hodges, vice president of affiliated and senior services at St. Bernards.

The work was one of four phases that will total $137.5 million at St. Bernards in downtown Jonesboro, which has helped fuel interest in the area, Hailey Knight, executive director of the Downtown Jonesboro Association, said in an email.

“We have 29 new lofts being built,” she wrote. “People are attracted to this area.”

She says downtown also benefited from the New York Institute of Technology College of Osteopathic Medicine at Arkansas State, which enrolled its first class of 120 students last August.

Also helping development in Jonesboro is Craighead County’s low unemployment rate, which has been attractive to developers, said Joshua Brown, principal broker of Haag Brown Commercial Real Estate & Development in Jonesboro.

The unemployment rate for the county was 2.8 percent in March, which was lower than the state’s rate of 3.6 percent and the national rate of 4.5 percent.

And he said that the city is still seeing commercial projects as a result of NEA Baptist Memorial Hospital in Jonesboro spending $400 million on its medical campus, which opened in January 2014.

Here are some of the current top projects in the city.

St. Bernards Medical Center Surgery Tower/ Emergency Department Ambulance Entrance

Cost: $80 million
Contractor: Nabholz Construction Corp. of Conway
Architect: HKS Inc. of Dallas
Projected Completion: Spring 2019

St. Bernards announced in December 2015 that it was starting a four-phase construction project.

The centerpiece of the project is the $80 million, 245,000-SF, five-story surgical and intensive care tower and renovation of the emergency department, said Hodges.

The project will consolidate services into one building, he said. It will also provide a new entrance for emergency services. The first level will have 14 surgical suites and a pharmacy, and the second floor will be a 48-bed critical care unit. Hodges said the project was financed through a bond issue and with the health care system’s cash reserves. After this project is complete, Hodges said, another phase will begin on renovating areas that haven’t yet been identified. He didn’t have a cost estimate for that construction phase.

Hyatt Place Hotel & Convention Center

Cost: $25 Million
Contractor: Construction Network Inc. of Jonesboro
Architect: Pure Architecture Studio LLC of Milwaukee
Projected Completion: Unknown

Jonesboro Hyatt Place Hotel & Convention Center broke ground in August, and problems soon developed. Subcontractors earlier this year began filing liens against the project totaling more than $900,000.

The developer, Northern Arkansas Hotel & Convention Center LLC, hasn’t made any payments to the general contractor and owes $1.5 million to subcontractors and a supplier, according to documents filed in court late last month.

Sean Stem, the president of Construction Network Inc. of Jonesboro, said in an affidavit filed April 21 that Northern Arkansas Hotel & Convention Center “has failed to make payments to CNI and to date has made no payments in any amount to CNI related to work performed on this project.”

The Jonesboro Advertising & Promotion Commission on April 13 sent a letter to Northern Arkansas Hotel & Convention Center demanding copies of several documents involving the financing of the project; it also asked to see a commitment letter from Hyatt. If the commission doesn’t receive the paperwork by May 19, it will rescind its pledge of $300,000 to the project.

Chris Keller, CEO of Northern Arkansas Hotel & Convention Center, didn’t respond to an email message from Arkansas Business last week.

Last week, Keller returned nearly $75,000 the A&P Commission had given for the project, Chairman Jerry Morgan said in an email to Arkansas Business last week. The check “didn’t have any correspondence with it,” he said. “It was just the check.”

FNB Financial Park

Cost: $20 million
Contractor: Ramsons Inc. of Jonesboro
Architect: WD&D Architects of Little Rock
Projected Completion: Spring 2018

First National Bank of Paragould announced in September that it was building a five-story, 60,000-SF building for its Craighead County operations. First National spokesman Blake Guinn said the bank’s headquarters will remain in Paragould.

The Jonesboro project will have a community room, an outdoor terrace and “public events will be welcomed and encouraged,” according to a First National news release. The site also will have underground parking for 50 vehicles.

The project is on schedule and should be completed in the spring of 2018, Guinn said.

Arkansas State University Undergraduate Housing

Cost: $14.8 million
Contractor: Huffman & Co. of Little Rock
Architect: Planworx Architecture of Raleigh, North Carolina
Projected Completion: Fall 2017

The two buildings, totaling 350 beds, for undergraduates at Arkansas State University won’t look “anything like dormitories from the late 20 century,” said spokesman Bill Smith. “They’ll have 9-foot ceilings. They have ceiling fans. They have walk-in closets.”

The amenities will be comparable to off-campus apartments, he said.

A-State signed a 35-year land lease agreement with Zimmer Development Co. of Wilmington, North Carolina, to build the dorms along with graduate housing. Zimmer also will maintain the units while A-State will manage and market the complex, according to an A-State news release. During the initial years, Zimmer will pay $200,000 annually for the undergraduate land lease.

Smith said A-State’s on-campus housing had operated at full capacity for several years.

The arrangement with Zimmer “was seen as a way to enhance the inventory of campus housing without the debt load that might come with it.”

Arkansas State University Graduate Housing

Cost: $12.2 million
Contractor: Huffman & Co. of Little Rock
Architect: Planworx Architecture of Raleigh, North Carolina
Projected Completion: Fall 2017

The 165-bed complex for Arkansas State University’s graduate students is expected to open by the fall, said A-State spokesman Bill Smith.

The rooms feature their own bathrooms and closets, he said.

Zimmer Development Co. is also leasing the land the building is on and will pay $105,000 during the initial years.

“Our student community has grown,” then-Chancellor Tim Hudson said in a February 2016 news release announcing the housing projects. “These projects allow us to accommodate students who want to reside on campus throughout their career.”

The two projects will bring the resident total to about 3,700.

St. Bernards Heartcare Center Renovation

Cost: $12 million
Contractor: Nabholz Construction Corp. of Conway
Architect: HKS Inc. of Dallas
Projected Completion: December 2017

The 14,000-SF renovation work at St. Bernards Heartcare Center started in January and is expected to be completed by the end of the year, said Hodges, the St. Bernards VP. The facade of the center will remain the same, but the inside is being renovated so that all noninvasive procedures will be conducted on the first floor and invasive procedures on the second. It also is adding a cardiac catheterization lab. The third floor, which had been a shell since the building opened in 1999, will be built out to hold a 26-unit patient prep and recovery area and a separate family waiting area, according to St. Bernards.

A flurry of behind-the-scenes activity indicates a restart is in the works for a key part of the Creative Corridor in downtown Little Rock.

Lawsuits and countersuits surrounding unpaid work on the dormant 125,000-SF Main Street Lofts redevelopment recently were dismissed.

The order in Pulaski County Circuit Court alludes to a financial settlement that squared away more than $1.3 million in claims on the three-building project at 510-524 Main St. by Little Rock’s AMR Construction and its subcontractors.

A new entity, Deep Creek LR LLC, also became the owner of the former M.M. Cohn Building at 510 Main St. Real estate documents portray the change as a reorganization and an internal shift in ownership, a transaction valued at $2.1 million.

Trailing behind this, the lead construction lender, Riverside Bank of Sparkman, released its security interest in the 62,688-SF building. The property secured a 2015 mortgage of $2 million held by the bank.

Delinquent property taxes totaling $30,542 for 2012-15 also were paid, tying up another loose end in advance of renewed work on the building or a possible sale.

All these developments come two years after activity moved from the construction site to the courthouse when AMR Construction walked off the job in April 2015. AMR received an $896,756 arbitration award that was converted to a judgment last year against the Main Street Lofts ownership group, then led by Scott Reed of Portland, Oregon. According to sources, his role with the project has changed.

“I believe that Scott Reed is out of the picture, except he may be consulting with the new group because of his knowledge about the entire project,” said Phil Kaplan, a member of the Arkansas Symphony Orchestra’s board of directors. “We made it clear we didn’t want to deal with him.”

Will the symphony set up shop in part of the M.M. Cohn Building as originally planned?

“The ASO is still very interested in the possibility of becoming a tenant in the building if the terms can be worked out,” Kaplan said.

Various parties involved with past workout attempts for Main Street Lofts considered Reed to be the biggest obstacle to getting the project back on track. His removal from the forefront is touted as a leading cause that momentum is restored.

“Scott’s got a lot of pride,” said one Little Rock businessman who’s spent more frustrating time with Reed than he cares to count. “He’s never wrong. He may be a super salesman, but he just can’t take it to the finish line.”

Two blocks to the north, the 32-unit K Lofts apartment project that Reed started but couldn’t finish was brought back to life earlier this year. As with Main Street Lofts, internal pressure from investors is credited with restoring order.

Elevator inspection and installation of the remaining appliances are two of the last big checklist items remaining before the apartments at 315 Main St. are ready for showing to prospective tenants.

“We’re getting very close,” said Matt Foster, owner of Little Rock’s MWF Construction LLC. “We hope to be finished up during the next three weeks.”

MWF’s $375,000 contract to finish K Lofts is among a string of construction jobs in downtown Little Rock expected to be completed before year’s end.

The biggest of the bunch is the seven-story, $12.5 million Hilton Garden Inn at 322 Rock St. Progress on the 140-room hotel is on pace for a fall opening.

“For working in a dense urban environment, it’s been pretty smooth,” said William Clark, CEO of Little Rock’s Clark Contractors LLC. “We’ll be finished with our part in August.

“A couple months after that, it should open.”

The project will house nearly 4,000 SF of meeting space and a full-service restaurant and bar on the ground floor named The Garden and a top-floor venue called Posh.

Seven blocks to the south, the three-story, 48-unit Clayton on Scott apartment project is moving toward completion in August.

“We’re in the finish-out phase,” said Jonathan Shively, president of Little Rock’s Central Construction Group. “We’re in the process of about to start painting.”

The $4 million construction project at 915 Scott St. is among four sizable jobs the company has going in downtown Little Rock.

Construction of 16 apartments at 1300 E. Sixth St., part of the $7 million Sterling Paint redevelopment, should be completed by early fall.

“We’re doing site work and framing out the second-floor apartments,” Shively said.

Workers also are preparing space on the ground floor for new offices of Cromwell Architects Engineers and a 4,000-SF restaurant, whose identity remains under wraps.

“We’re hoping that all comes together by the end of the year,” Shively said.

Central Construction recently began work to redevelop the former M.M. Eberts American Legion Post at 315 E. Capitol Ave. into the Dust Bowl Lanes & Lounge.

The $913,000 project should be complete in about six months, along with a neighboring redevelopment.

Next door, the former Paragon Printing Building at 307 E. Capitol Ave. is marked for a $1.2 million transformation into Fassler Hall, a German-style beer hall and restaurant, The two projects will be the first Arkansas endeavors for The McNellie’s Group of Tulsa, the hospitality enterprise behind both concepts.

Ground-floor space is taking shape in the former Fulk-Arkansas Democrat Building.

The new home of Three Fold Noodles & Dumpling Co. will round out the redevelopment, which includes eight completed apartments on the second floor.

The finish-out work by Little Rock’s Tycor Construction should be completed by mid-September. The $450,000 project at 611 Main St. will provide seating for 120.

It looks like the logistics company Vouk Transportation Inc. of North Little Rock has hit another rough patch.

Bank of Little Rock filed to foreclose on Vouk’s headquarters because it allegedly defaulted on a $826,000 mortgage taken out in May 2015, according to the bank’s filings in Pulaski County Circuit Court.

The bank said Vouk, which has a legal name of 3BE Logistics LLC, hasn’t made timely installments on the note. And as of last month, $806,000 was owed on the loan secured by the 13,682-SF building, which was built in 2002.

Vouk’s president, Christopher Blakley, signed the document, making him “jointly and severally liable for all amounts due under the Note,” according to the complaint.

When we called Vouk for comment on Thursday, the phone just rang and rang.

The company’s website says it offers services that include expedited shipping, warehousing or auto-hauling.

“At Vouk Transportation, you are our first priority,” the website said.

“When you are at the top of our chain, you don’t worry about efficiency, cost or delivery — we do that for you, every time.”

Back in 2012, its former executive, Leander J. Muncy III, was sentenced to 24 months in federal prison and three years of probation after pleading guilty to one count of theft and embezzlement from Vouk’s employee pension benefit plan.

In addition to time behind bars, Muncy was ordered to pay $268,720 in restitution

Muncy held various positions at Vouk Transportation, including president and vice president, from September 2004 to August 2010, during which he was trustee of the company’s employee profit sharing plan.