John Burgess has joined the Arvest Bank board of directors in central Arkansas.
Burgess serves on the board of advisers of the International Association of Cloud & Managed Service Providers. He received a Bachelor of Science in computer science from the University of Arkansas at Little Rock.
See more of this week's Movers & Shakers, and submit your own announcement at ArkansasBusiness.com/Movers.
A future apartment site in west Little Rock weighed in at $2.5 million.
Madison at Chenal LLC, led by Brandon Huffman and Graham Smith, bought the 5,000-SF office-warehouse at 15500 Kanis Road and an adjoining 12.8-acre tract. The seller is Winrock Enterprises Inc., led by Russ McDonough III.
The deal is financed with a $5 million loan from the Barnes Revocable Trust, led by James and Terry Barnes.
Winrock acquired the combined 13.4-acre property for $245,000 in March 2001 from McMann Inc., led by Daniel McNamara.
Dealership Site
Property for an equipment dealership in southwest Little Rock tipped the scales at $1 million.
Stribling Equipment LLC of Richland, Mississippi, purchased the 9,316-SF City of Fire Ministry project at 10504 Interstate 30 and the 10,120-SF strip center at 10510 Interstate 30.
The seller is Atkinson Properties LLC, led by Russell and Richard Atkinson.
The 5.49-acre development previously was tied to a February 2013 mortgage of $458,177 held by Central Bank of Little Rock.
Atkinson bought the property for $560,000 in January 2002 from William and Ruth Huffstutlar.
Tacos Transaction
A restaurant site in west Little Rock rang up a $775,000 sale.
Tacos 4 Life Real Estate LLC, led by Austin Samuelson, acquired the 1-acre location on Shackleford Road between Longhorn Steakhouse and Boomerang Carwash.
The seller is Shackleford Crossings Investors LLC, an affiliate of Invesco Real Estate of Dallas. Construction is backed with a 10-year loan of $1.75 million from Arvest Bank of Fayetteville.
The property previously helped secure a February 2015 mortgage of $36.2 million held by ZB of Salt Lake City.
Shackleford Crossings Investors entered the ownership picture in July 2011 at a $42 million foreclosure sale after buying the project debt in May 2011 for an undisclosed sum.
The deal included the 271,675-SF Shackleford Crossings lifestyle center and undeveloped outparcels totaling about 8.7 acres that were used to secure debt of $57.4 million held by the project’s construction lender, M&I Marshall & Ilsley Bank of Milwaukee.
Gallery Purchase
A 2,200-SF commercial building in the Heights area of Little Rock changed hands in a $699,000 transaction.
Cude Properties LLC, led by Travis and Jennifer Cude, bought the Heights Gallery project at 5801 Kavanaugh Blvd. The seller is Onkav LLC, led by Gary Childers.
The deal is funded with a five-year loan of $594,150 from Simmons Bank of Pine Bluff.
The 0.08-acre development previously was linked with a June 2015 mortgage of $456,000 held by IberiaBank of Lafayette, Louisiana.
Onkav acquired the property for $545,000 in March 2014 from Mitchell and Lee-Ann Jansonius.
Lomanco Buy
A 7,436-SF bar in Jacksonville is under new ownership after a $548,000 sale.
Lomanco Inc., led by Chris Grimes, purchased Big D’s Sports Bar at 2221 W. Main St. from Danny Martindill. The 1-acre development previously helped secure a May 2015 mortgage of $566,040 held by Centennial Bank of Conway.
The property was bought for $110,000 in September 1980 from B.K.R. Enterprises Inc., led Bobby Isbell.
Residential Acreage
A 40.3-acre residential tract in west Little Rock drew a $500,000 transaction.
D. Vincent investments LLC, led by Dale Briggs, acquired the land between the south end of Beckenham Drive and the north end of Belle Pointe Drive from Megyn Bell.
Uncle Sam received $100,000 of the sale in connection with a long-running income tax dispute with Bell’s late father, Melvyn Bell.
The land was purchased for $188,000 in January 1984 from the M.W. Kay Inter Vivos Trust and the Manie Schuman Trust.
Hickory Residence
A 4,788-SF home in west Little Rock’s Hickory Hills neighborhood weighed in at $1.25 million.
The Susan Cobb Underwood Revocable Trust bought the house from the Donna Kay Clark Trust.
The residence was acquired for $1.15 million in February 2006 from the Louis Gladfelter Revocable Trust.
River Oaks Abode
A 6,814-SF home in Little Rock’s River Oaks neighborhood changed hands in a $905,500 foreclosure sale.
Bo Ventures LLP, led by Richard O’Brien, purchased the house. The previous owners were Lewis and Debra May.
The residence previously was tied to an August 2003 mortgage of $935,000 originated by First Arkansas Bank & Trust of Jacksonville. It also secured a series of 2009 mortgages held by First Arkansas, $98,555; Summit Bank of Arkadelphia, $100,000; and Regions Bank of Birmingham, Alabama, $250,000.
The Mays bought the property for $210,000 in January 1996 from Alta Hale.
Woodland’s House
A 4,017-SF home in the Woodland’s Edge neighborhood of west Little Rock sold for $651,258.
Darin and Tamela Gray acquired the house from HRH Builders Inc., led by William Darby.
The deal is financed with a 30-year loan of $553,550 from Centennial Bank. The residence previously was linked with a September 2015 mortgage of $434,400 held by Little Rock’s Bank of the Ozarks.
The location was purchased for $80,000 11 months ago from Rocket Properties LLC, led by Lisenne Rockefeller and Ron Tyne.
Robinwood Home
A 3,876-SF home in Little Rock’s Robinwood neighborhood rang up a $600,000 transaction.
William and Lesley Callahan bought the house from Kyle and Terri Patton. The deal is backed with a $250,000 loan from Centennial Bank.
The residence previously was tied to a July 2014 mortgage of $195,865 held by Union Bank & Trust of Monticello.
The Pattons acquired the property for $530,000 in March 2005 from William Stover II and his wife, Donna.
Heights Domicile
A 2,517-SF home in the Heights area of Little Rock is under new ownership after a $550,000 sale.
Jane Ann Fortenberry purchased the house from Rush Harding IV and his wife, Rachel.
The deal is funded with a 30-year loan of $440,000 from Bank of America in Charlotte, North Carolina. The residence previously was linked with a December 2011 mortgage of $344,000 held by First Security Bank of Searcy.
The Hardings bought the property for $430,000 nearly five years ago from John and Miranda Bennett.
Cypress Residence
A 4,063-SF home in west Little Rock’s Cypress Point neighborhood drew a $535,000 transaction.
Richard Griffiths acquired the house from Mark and Trisha Guenther.
The deal is financed with a 30-year loan of $417,000 from Riverside Mortgage Co. of Little Rock.
The residence previously was tied to a January 2013 mortgage of $114,250 held by IberiaBank Mortgage Co. of Lafayette, Louisiana, and a May 2016 mortgage of $366,400 held by BancorpSouth Bank of Tupelo, Mississippi.
The Guenthers purchased the location for $60,000 in July 2002 from Ranch Properties Inc., led by Ed Willis.
Arkansas Urology $4,890,730
1310 Centerview Drive, Little Rock
Clark Contractors LLC, Little Rock
Renovation Cinemark Theater $2,430,000
18 Col. Glenn Plaza Drive, Little Rock
Bailey Construction & Consulting LLC, Little Rock
New House $1,385,000
73 Sologne Circle, Little Rock
Taggart Design & Build LLC, Little Rock
Prosperity Bank of El Campo launched a foreclosure action against Walter Quinn, seeking possession of the Little Rock businessman’s 7,490-SF home in the Riverview Point neighborhood.
You might recall the bank filed a $4.9 million consent judgment against Quinn last November in Tulsa’s federal court.
The debt is personally guaranteed by Quinn and his wife, Terry, as well as the Quinn Living Trust, which owns the residence.
Other entities tied to the consent judgment are Quinn Investments Ltd., Quinn Management Co., RX Finance LLC, Rock Exploration LLC, Rock Oil & Gas LLC, QF Holdings LLC and the Walter Quinn Irrevocable Family Heritage Trust.
Absent from the list was Wild Wing Farms LLC, led by Quinn. The 923-acre hunting-agri spread in Arkansas County has been sold in a two-part $10 million transaction culminating in June.
The 2015 judgment and 2016 foreclosure are linked with a pair of delinquent loans. One loan originally totaled nearly $14.7 million and dated back to Sept. 28, 2012. The other originally totaled $3 million and dated back to June 28, 2010.
Last year, we also told that Prosperity inherited the two contentious loans through its 2014 acquisition of F&M Bank & Trust of Tulsa for a $255 million combination of stock and cash.
Rock Bancshares Inc. stock was part of the collateral equation in a forbearance agreement between Quinn and Prospect last year.
Quinn is a leading shareholder in Rock Bancshares, parent company of Little Rock’s $227 million-asset Heartland Bank. He stepped down as a bank director and as chairman, president and CEO of Rock Bancshares.
By now the U.S. population has been inundated with political ads and the opinions of countless political analysts. We have been presented each candidate’s positions on issues such as national security, immigration, health care and, of course, the economy. There is no doubt the nation is divided on these topics. However, there is one thing on which everyone seems to agree: If their party does not win the election the opposing party will certainly cause the market and economy to suffer.
Every four years we hear the common argument that political party X will destroy the economy or crash the market. This rhetoric tends to make people worry around election time. It can be difficult to stay on track with your retirement investments when you hear the doomsday news that partisans forecast in the media. Some people are so convinced a disaster is just beyond the polling booth that they pull their money out of the market completely. Of course, this action only increases market volatility leading up to the presidential election.
We hear the political noise every day, but what is the truth? Which political party does the market really prefer? The answer is neither. That’s right, all the back and forth you are hearing is not supported by facts at all. The truth is that there have been 28 presidential terms from the year 1900-2012. Fifteen of those terms were controlled by a Republican president while thirteen terms saw a Democratic president. Let’s take a look at the Dow Jones Industrial Average (DJIA), which was created in 1897. The average posted positive returns 13 out of the 15 terms in which the president was a Republican and 10 out of the 13 terms that the president was a Democrat. This means that the majority of the past 28 presidential terms has seen a rising DJIA regardless of which party occupied the Oval Office.
So, what really drives the market? Fortunately for us, it’s not the politicians. Consumers and businesses have a far greater impact on the economy than the government. Federal, state, and local government spending makes up only 17.7 percent of our country’s gross domestic product (GDP). On the other hand, private consumption, private investment and foreign trade make up 82.3 percent of GDP. This means that you, me, our employers and the businesses with whom we spend our money are really in control of how the economy and the markets perform.
Overall, the market doesn’t really care which political party controls the White House. All it really wants to know is who it’s going to be dancing with for the next four years.
As is the case in many other aspects of our lives, we get frightened around election time because we fear change. There are certainly many events that can disrupt the market, a presidential election being one of them. However, if you have a financial advisor who helps you cut through the confusion and create a clear plan for your financial future then you are much more likely to stay on track during times like these. No matter which candidate wins, those of us who are not yet retired will have to get up and go to work the next day in order to continue building towards our goals.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The Standard & Poor’s 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
Former One Bank & Trust executives Michael Heald and Bradley Paul were acquitted Monday of charges related to a 2007 loan after a three-week trial in federal court in Little Rock.
"I'm happy to tell you how extremely pleased we are that Mike's vindicted at long last," Heald's attorney, Gary Corum of Little Rock, told Arkansas Business.
Heald was acquitted on four counts: one each of conspiracy and money laundering and two of aiding and abetting false entries. Paul, who was represented by Lloyd W. "Tré" Kitchens III of Little Rock, was acquitted of the same charges, plus one more count of abetting a false entry.
"It's a fearsome thing to be pursued by a federal prosecutor," said Corum, who went on to say that the defense that persuaded the jury was the same one that the defendants had given U.S. Attorney's Office since the investigation started in the summer of 2013.
"It's just impossible to tell those folks things they don't want to know and to make them understand things they don't want to understand," he complained.
U.S. Attorney Christopher Thyer's office originally indicted four bankers who worked for the late Layton "Scooter" Stuart, who owned One Bank.
The first was Gary Rickenbach, who eventually pleaded guilty to a reduced charge of misprision — that is, failing to report a felony. He testified against Heald and Paul and had not yet been sentenced.
Heald, Paul and Tom Whitehead were added to the indictment in March 2015, but all charges against Whitehead were dropped last December. Whitehead also testified against Heald and Paul.
The charges all related to a $1.5 million loan that Rickenbach facilitated to a Canadian resident of Florida, Alberto Solaroli. Solaroli misrepresented his net worth to the tune of $170 million and never made a single payment on the 2007 loan, and he pleaded guilty to money laundering and received a one-year prison sentence.
Arkansans' expectations of their personal financial situations in the future have improved significantly since March, even if they say their personal finances have not changed much from a year ago, according to the fall 2016 Arvest Consumer Sentiment Survey.
The report, released Tuesday, includes a study of consumers' outlooks on personal finances, buying conditions over the next six months, and business conditions over the next year and next five years.
According to the survey conducted in August, 42 percent of Arkansas consumers expect their personal financial situation to improve over the next 12 months, up from 38 percent in March.
"For the first time since the beginning of the Arvest Consumer Sentiment Survey, Arkansas consumers expressed more optimism about the future than their national counterparts," said Kathy Deck, director of the Center for Business and Economic Research in the Sam M. Walton College of Business at the University of Arkansas and lead economist for the survey.
"High sentiment readings were recorded for all three components of the expectations index, indicating high hopes about future personal financial conditions, shorter-term business conditions and longer-term business conditions," Deck said.
The CBER conducts the survey twice a year through 1,200 random online and telephone surveys.
Missouri and Oklahoma were also surveyed. Across the region, 47 percent expect their personal financial situation to stay the same, while 40 percent expect it to improve.
When it came to determining buying conditions, 57 percent of Arkansans believe the next six months will be a good time to buy items like furniture, televisions and refrigerators.
Arkansans were more optimistic in August than March in terms of expected business conditions over the next year, with 31 percent expecting good times compared with 28 percent in March.
Regional respondents who expect good times for businesses over the next year jumped from 24 percent to 32 percent, and 43 percent expect good times over the next five years.
This round of survey results also includes a Current Conditions Sub-Index and a Consumer Expectations Sub-Index, which follow the model of the national Thomson/Reuters Michigan Surveys of Consumers. Both those ratings increased since the last survey, indicating a combination of consumer satisfaction with their current and expected personal finances, current and expected economic performance, and the purchasing environment, the survey said.
LITTLE ROCK - Arkansas finance officials say a boost in corporate and individual income tax collections helped the state's revenue rebound in October after three months of losses this fiscal year.
The Department of Finance and Administration said Wednesday the state's net available revenue in October totaled $439.1 million, which was $33.2 million above the same month last year and $8.9 million above forecast. The state's revenue so for the fiscal year that began July 1 totaled $1.7 billion, which is $23.2 million below forecast.
DFA said corporate income tax collections last month were $17.9 million above forecast and individual income tax collections were $2.1 million above forecast. Sales tax collections were $3.7 million below forecast.
Gov. Asa Hutchinson next week plans to announce his budget proposal for the next fiscal year.
(Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
"All politics is local."
It's the often-repeated phrase used to illustrate that, even when weighing a broad policy issue, people care most about how it impacts them and their community. That sentiment applies even more fittingly to the world of economic development. When it comes down to it, all economic development is about bringing good jobs to local communities. Issue 3, a proposed constitutional amendment for economic development on the General Election Ballot, is a prime example.
Issue 3 will arm all of our cities and towns — no matter the size — with the tools needed to effectively compete for jobs. Opponents have questioned whether local communities are equipped to decide whether a project is worth their investment. I say, our communities are in the best position to decide how to spend their own local dollars.
The state always has and will continue to play a vital role in attracting new industries and companies to Arkansas, but our cities and counties are an essential part of the process. Right now, ambiguities in our state Constitution have left our communities with their hands tied when it comes to using local resources to recruit employers. Issue 3 would provide clear, consistent definitions for "economic development projects" and "services" in our Constitution, eliminating the need for constant and varying legal interpretation of what kind of economic activities a city or county may engage in, letting them focus on creating jobs.
Issue 3 gives cities and counties clear authority to spend local dollars on economic development. Because the Constitution is currently unclear, so are the guidelines for local communities, which leaves them frustrated and vulnerable.
For example, right now, some towns in Arkansas are sitting on reserves of public money, that voters specifically marked for economic development, but the community can't spend it, for fear of a legal challenge under the current Constitution. Issue 3 will fix that, allowing local dollars to be spent to attract local jobs, and allowing our cities and counties to compete with other communities across the country.
Under Issue 3, with voter approval, cities and counties will also be able to issue bonds for economic development projects. Qualifying projects are closely defined, and any bond issue would require approval from voters, ensuring a system of checks-and-balances. Empowering Arkansas communities with this development tool puts them on an even playing field with our competitors in other states, and it will be a game-changer in our ability to compete for jobs at the local level.
Finally, Issue 3 will enhance Amendment 82, known as the "super project amendment." This is critical for the state's ability to recruit and land top employers. Currently, bonds issued under Amendment 82 are restricted to 5 percent of the state's general revenue budget. That limits the number of large employers the state can land at one time.
Issue 3 would remove that restriction, giving the state the flexibility to compete for multiple large projects at once. Those projects will still undergo multiple layers of scrutiny, including an independent, third-party economic impact study, which is required before a legislative vote. Opponents claim it's "too risky" for the state to remove the Amendment 82 restriction. I argue the real risk lies in doing nothing.
The state issued Amendment 82 bonds for Big River Steel, a northeast Arkansas employer, in 2013. That means over the next decade or more, we only have the capacity left to recruit one — maybe two — other large projects to our state. By not enhancing Amendment 82, we're basically saying Arkansas is closed for business when it comes to attracting major, top-quality employers that bring with them higher paying jobs.
Opponents claim Issue 3 is "corporate welfare." That’s just not the case. It's not about bolstering businesses, it's about growing communities. And Issue 3 is vital for Arkansas' ability to bring home good-paying, high-quality jobs to communities in every corner of the state. It doesn't get more local than that.
(Randy Zook is vice chairman of the Jobs for Arkansas Committee, as well as president and CEO of the Arkansas State Chamber of Commerce/Associated Industries of Arkansas.)
Phil Baldwin, president and CEO of Citizens Bank of Batesville, and Susan M. Miller, a partner at BKD LLP of Little Rock, were honored with lifetime achievement awards at the Arkansas Business CFO of the Year luncheon on Wednesday.
Baldwin, the CFO Lifetime Achievement Award winner, held the post of chief financial officer for a little over a decade at four stops during his 36-year career, including at Arkadelphia’s Southern Bancorp. There, he helped grow the company into America’s largest rural development bank. After leaving Arkansas and spending time in Atlanta, where he served as CEO of CredAbility, he was lured back to the state by Citizens Bank in 2013.
Miller, the Lifetime Achievement in Accounting Award winner, became partner at BKD in 2003. In 2007, she was named the firm’s health care niche leader. The health care team has 16 employees and works with about 30 hospitals to improve their bottom lines. Miller has also been involved with Ronald McDonald House Charities of Arkansas since 2006, and serves on the board of directors’ executive committee.
The awards are part of an annual event produced by Arkansas Business that honors lifetime achievements and chief financial officers in several categories.
Each of the honorees was chosen by an independent panel of judges. This year’s judges were Gena Wingfield, CFO of Arkansas Children's Hospital; Marnie Oldner, CEO of Stone Bank; and Jim W. Smith, founding partner of Smith Hurst PLC.
The event's other honorees were:
Short biographies on all of the winners and finalists are available here.
The Alotian Club, a private golf club owned by Little Rock financier Warren Stephens, will host the 23rd Arnold Palmer Cup in 2019.
The annual Ryder Cup-style competition will take place June 7-9. It will mark the first time the event is played in the United States, and it will be expanded to include men's and women's U.S. collegiate golfers against international competitors from around the world.
"Many of the alumni of the Arnold Palmer Cup have become prominent professional golfers and have earned numerous victories around the world, including several of golf's major championships," said Kevin Bingham, CEO of Arnie's Army Charitable Foundation. "Arnold Palmer's vision for growing golf globally and perpetuating golf's positive character building attributes through the next generation of youth is something that was very important to Mr. Palmer.
"Arnie's Army Charitable Foundation is honored to continue Arnold Palmer's legacy of international team golf competition through this tournament," he said. "We're grateful to The Alotian Club for hosting our event in 2019."
Opened in western Pulaski County in 2004, The Alotian Club is ranked No. 27 on Golf Digest's biennial ranking of "America's 100 Greatest Golf Courses." In 2005, Golf Digest called the club the best new private course in the country. Designed by Tom Fazio, Alotian hosted the 111th Western Amateur in 2013.
"For generations, Arnold Palmer exemplified and embodied the spirit of golf and its guiding principles," Stephens said in a news release. "The Alotian Club is honored to continue his legacy by hosting the Arnold Palmer Cup in 2019. Since our inception, The Alotian Club has supported young golfers. We look forward to welcoming collegiate players from the United States and around the world to our course and our great state."
Palmer, regarded as one of the greatest professional golfers of all time, visited The Alotian Club in 2009 as part of the Jackson T. Stephens Charitable Golf Tournament. He died Sept. 25.
The Arnold Palmer Cup was cofounded by Palmer and The Golf Coaches Association of America and began at the Bay Hill Club & Lodge in Orlando in 1997. The event is supported by the Arnie's Army Charitable Foundation.
The Arkansas Bankers Association on Sept. 29 issued a warning to its members that a Pittsburgh law firm was firing off letters to banks accusing them of having websites that aren’t compliant with the federal Americans with Disabilities Act.
The ABA said the law firm, Carlson Lynch Sweet Kilpela & Carpenter LLP, wants banks and other companies to make their websites ADA compliant and to pay a settlement for attorneys’ fees and costs — which could be tens of thousands of dollars. If those actions aren’t taken, a lawsuit could follow, as it has against companies such as Toys “R” Us Inc. and Foot Locker Inc.
“We have reason to believe the number of these lawsuits will rapidly climb and we want our Arkansas Bankers to be on alert,” Bill Holmes, CEO and president of the ABA, wrote.
Holmes told Arkansas Business recently that two Arkansas banks had received the demand letter from the law firm, but no lawsuits have been filed.
An attorney from Carlson Lynch didn’t return a call for comment.
Disability lawsuits over companies’ websites have been on the rise nationwide. Carlson Lynch has filed more than 40 federal lawsuits since the beginning of 2015, most of them in Pennsylvania, according to court records. Other laws firms have also been filing similar suits against companies across the country.
So far Carlson Lynch hasn’t filed a lawsuit in Arkansas, but the firm is representing a blind Little Rock woman who challenged a retailer’s website and was instead sued.
In December, Carlson Lynch sent Mardel Inc. of Oklahoma City a settlement letter on behalf of Lori Hunter, whose visual impairment kept her from accessing the Christian retailer’s website. The letter asked Mardel to bring its website into ADA compliance and to pay attorneys’ fees and costs.
Mardel responded by suing Hunter in U.S. District Court in Little Rock in July. The retailer wants a judge to rule that the ADA requirements don’t apply to its website. If that doesn’t happen, Mardel wants a judge to say “what, if any, legal standard governs its obligations to comply with the ADA in the operation of the Website.”
Mark Weber, a law professor at the DePaul University College of Law who has taught a course in disability law, said a dispute exists between courts over whether a section of the ADA actually covers commercial websites.
Congress passed the ADA in 1990, when “websites weren’t anything that people were concerned about,” he said.
“In fact, there are currently no legally binding technical standards that define what is required for a private entity’s website to be accessible in accordance with Title III of the ADA, if such compliance with the Title III of the ADA is even required,” said attorney Phil Richards of Tulsa, who represented Mazzio’s LLC in a lawsuit filed in February against the Carlson Lynch law firm. That case was quickly dismissed.
Carlson Lynch said in its letter to Mardel’s that the company’s website violated the Web Content Accessibility Guidelines, which are internationally accepted standards for website accessibility.
Such accessibility would, for instance, require coding that allows screen-reading software to describe images on the website, said Kathy Wahlbin, CEO of Interactive Accessibility of Boston, which provides ADA website consulting services.
“The screen reader produces an auditory version of what a visual user would see on the screen plus additional information to help them navigate the site,” Wahlbin said.
Weber, the DePaul law professor, said the lawyers for their blind clients have a persuasive argument. “It’s really not that difficult to make the websites accessible,” he said.
And when it’s been done, it makes accessing the web easier for people with disabilities. “It’s a big deal for someone who’s got a visual disability,” Weber said.
An 18,000-SF athletic training facility in west Little Rock tipped the scales at $3.1 million.
Store Master Funding X LLC, an affiliate of the Store Capital real estate investment trust in Scottsdale, Arizona, purchased the D1 project at 10 Viewpointe Cove. The seller is WB Sports of Little Rock LLC, led by Will Bartholomew.
The 1.75-acre development previously was tied to a February 2014 mortgage of $2.8 million held by First Bank of Nashville, Tennessee.
The location was acquired in July 2007 as part of a $697,000 deal with Linda and Gene Pfeifer and Jim Hathaway Jr. and his wife, Gay.
Warehouse Purchase
A 104,000-SF warehouse in Little Rock weighed in at $1.9 million.
A local investment group doing business as 2200 Commercial Street Warehouse LLC bought its namesake project. The seller is 2200 Commercial Street Warehousing LLC, led by Mark Babbitt.
The 4.9-acre development was purchased for $328,000 in July 2004 from Alliant Foodservice Inc. of Deerfield, Illinois.
Storage Site Sale I
Land for a mini-storage development in west Little Rock changed hands in a $1.5 million sale.
Rodney Parham Storage Center LLC, led by Bruce Clinton, acquired the 3.69-acre former Green Tree Nursery at 9305 N. Rodney Parham Road.
Construction is backed with a five-year loan of $4.2 million from Citizens Bank of Batesville.
The seller is the Kerney R. Clinton & Helen S. Clinton Joint Revocable Trust.
The Clinton family bought the land for $88,000 in August 1974 from Richard and Gertrude Butler.
Storage Site Sale II
A 7.26-acre mini-storage development in west Pulaski County is in motion after an $840,000 land deal.
Markham Park LLC, led by Graham Smith, purchased the site near the southwest corner of Highway 10 and Ferndale Cutoff Road. First-phase construction of 275 units is financed with a five-year loan of $1.8 million from Arvest Bank of Fayetteville.
The seller is Farmers & Merchants Bank of Stuttgart, which inherited the property through the 2008 acquisition of Chart Bank of Perryville.
Chart Bank bought the land for $1 million in December 2003 from Sam Hollowell Jr. and his wife, Barbara, and Herman and Frances Rowland.
Sherwood Parcel
An 8.2-acre parcel in Sherwood rang up a $705,000 sale.
Steven and Stephanie Deere acquired the land near the northeast corner of Highway 107 and Kellogg Acres Road from Bear Paw LLC. The limited liability company is composed of Powell Brothers Inc., led by Matt Chandler; Rob Jolly Jr.; Matt Enderlin; Jimmy Crossfield; Scott Jolly; Brad Jolly; the Jamie Lazenby Bernt Share of the Lazenby Family Trust; Blake Lazenby and the Blake William Lazenby Share of the Lazenby Family Trust.
The deal is funded with a $705,000 loan from Centennial Bank of Conway.
The land previously helped secure a $3.3 million mortgage held by the bank.
The land was purchased in June 2007 as part of a $3.6 million deal with Sherwood Land Co., led by Steven Deere.
Convenient Acquisition
A 2,000-SF convenience store in southwest Little Rock drew a $620,000 transaction.
OM Business Inc., led by Balaji Thota, bought the Phillips 66 project at 8209 Geyer Springs Road from Pong Monk.
The deal is backed with a five-year loan of $326,675 from Simmons Bank of Pine Bluff.
The 0.59-acre development previously was linked with a July 2006 mortgage of $350,000 held by Metropolitan National Bank of Little Rock.
The property was acquired in June 2006 as part of a $700,000 deal with Marion Nash.
Jacksonville Project
A 4,000-SF office-warehouse in Jacksonville is under new ownership after a $150,000 sale.
M&M Heating & Air Inc., led by James Miles, purchased the 1010 S. Redmond Road project from Robert D. Smith.
The deal is financed with a $123,250 loan from Centennial Bank.
The 0.44-acre location was bought for $40,000 in July 2012 from the North Pulaski Waterworks Public Facilities Board, led by Steve Fikes.
Monster Manor
A 12,449-SF home in North Little Rock’s Parkhill neighborhood tipped the scales at $1.28 million.
Richard and Patricia Elimon acquired the 5.5-acre spread from Centennial Bank.
The bank recovered the residence 10 months ago from John and Angelica Rogers at a $1.25 million foreclosure sale.
The house previously secured a February 2008 construction loan with an outstanding balance of more than $1.9 million held by Centennial.
The location was purchased for $424,000 in June 2007 from the Joy H. Stevens Revocable Trust.
Hillcrest Home
A 3,416-SF home in the Hillcrest area of Little Rock sold for $695,000.
Matt and Jennifer Estes bought the house from Gary and Margaret Faulkner. The deal is funded with a 30-year loan of $556,000 from Morgan Stanley Private Bank of Purchase, New York.
The residence previously was tied to an April 2004 mortgage of $460,000 held by One Bank & Trust of Little Rock.
The Faulkners acquired the property for $458,000 in May 2003 from Richard and Mary Knox.
Estates Sale
A 5,742-SF home in west Pulaski County’s Ridgefield Estates neighborhood changed hands in a $649,000 deal.
James Alexander purchased the house from the Francis & Mary Browning Revocable Trust.
The deal is backed with a five-year loan of $661,293 from Simmons Bank.
The Brownings bought the 5.3-acre location for $70,000 in February 2003 from William and Cathryn McKinney.
Arbors House
A 4,704-SF home in The Arbors neighborhood of west Little Rock’s Chenal Valley development rang up a $625,000 sale.
George Granville Gleason III acquired the house from the Bilal Malik & Sadaf Bhutto Living Trust.
The property was purchased for $809,000 in June 2006 from Byron Holmes Construction Inc.
PV Residence
A 3,477-SF home in west Little Rock’s Pleasant Valley neighborhood drew a $610,000 transaction.
The Oma Gay Rush Living Trust bought the house from Alfred and Mary Norah.
The residence previously was linked with a January 2005 mortgage of $332,250 held by IndyMac Bank of Pasadena, California. The Norahs acquired the property for $365,000 in April 1999 from John and Tracy Criss.
Wellington Abode
A 4,243-SF home in the Villages of Wellington neighborhood in west Little Rock sold for $533,000.
John and Marie Rians purchased the house from Terry Brown.
The deal is financed with a 26-year loan of $533,000 from Regions Bank of Birmingham, Alabama. The residence previously was tied to a March 2015 mortgage of $379,000 held by BOKF of Tulsa.
Brown bought the property for $520,000 in August 2010 from the C. Dwayne & Jennifer M. Shelton Family Trust.
Mini-Mortgage
First-phase construction of a 1,300-unit mini-storage development in west Little Rock is in motion with a $3.2 million funding agreement.
Modern Storage West Little Rock LLC, led by Keith Richardson, obtained the loan from First Security Bank of Searcy.
The 8.12-acre location near the northeast corner of Autumn Road and Financial Centre Parkway was acquired for $748,703 in January 2015 from Iron Horse Estate Partnership, led by Fletcher Clement.
Stephanie Shine and Christopher Chunn have been promoted at Robert Half Finance & Accounting in Little Rock.
Shine was promoted to director of permanent placement services and vice president. She was previously division director and assistant vice president of the permanent placement division.
Chunn was promoted to division director and assistant vice president. He was previously recruiting manager and assistant vice president.
Shine and Chunn also serve the entire state of Arkansas in their permanent placement accounting and finance roles.
Edmond T. “Toby” Burkett of Little Rock, a senior financial adviser and first vice president of wealth management at Millwee Burkett Robinson & Associates, a Merrill Lynch branch office, has been nationally recognized as one of 401 Top Plan Advisors by Financial Times Magazine.
Mark Zitzer has been hired as manager of Allen Lund Co.’s new office in Little Rock at 10800 Financial Centre Parkway.
Allen Lund Co. is a third-party transportation broker based in La Canada, California. Zitzer has 15 years of 3PL experience in Arkansas. He earned a bachelor’s degree in marketing from the University of Arkansas in 2011.
See more of this week's Movers & Shakers, and submit your own announcement at ArkansasBusiness.com/Movers.
Here’s something I wrote in this space in August:
“When the U.S. Attorney’s Office in Little Rock is involved, the presumption of a defendant’s innocence must be more than theoretic, and confidence that the power of the government is being used fairly and wisely must be tempered.”
At the time, I was specifically talking about the case federal prosecutors working for U.S. Attorney Chris Thyer brought against banker and businessman John Stacks. Stacks was indicted on 11 felonies and convicted of seven related to a Small Business Administration disaster loan he received after a tornado hit his storage barn. But U.S. District Judge Leon Holmes reversed two of the convictions and ordered a new trial on the other five because “the evidence preponderates sufficiently heavily against the verdict that a serious miscarriage of justice may have occurred.”
When judges at the 8th Circuit Court of Appeals agreed with Holmes, Thyer’s assistants finally dropped all the charges in July — but only on the condition that Stacks agree not to sue for frivolous prosecution. After at least four years of investigation and prosecution, the government — represented primarily by First Assistant U.S. Attorney Patrick Harris and Assistant U.S. Attorney Angela Jegley — ended up with a big goose egg.
During much of the same time frame — starting in the fall of 2012 — the feds were also pursuing what prosecutors would paint as rampant crime at One Bank & Trust of Little Rock. The investigation properly centered on Layton “Scooter” Stuart, the CEO who owned virtually all of One Bank’s stock. But he died in March 2013, so attention shifted to his former lieutenants. And especially to one $1.5 million loan, which went bad instantly.
Five men were indicted in connection with that bad loan — a total of 21 counts, if I’ve added them up correctly. And these weren’t chicken-feed charges like structuring financial transactions. These charges included bank fraud and, most ominously, defrauding the federal TARP bank recapitalization program.
After years of investigation and prosecution, the feds came up with slightly more than they did in the Stacks case.
Alberto Solaroli, who borrowed the $1.5 million using a falsified financial statement and then never made a single payment, pleaded guilty to a reduced charge of money laundering and was sentenced to a year and a day in federal prison. (He also agreed to bargain-basement restitution of $120,000.)
Gary Rickenbach, the former EVP at One Bank who failed to tell his colleagues that he had invested in Solaroli’s company before he facilitated the fraudulent loan, had seven counts dismissed (including TARP fraud). He ultimately pleaded guilty to a single count of misprision — failing to report a crime. He has not yet been sentenced. He tried to get a probation-only sentence, but his final plea agreement suggests a guideline range of 10-16 months in prison.
Four counts against Tom Whitehead, the former chief financial officer, were dismissed in exchange for his testimony against the last two: former COO Michael Heald and former EVP Bradley Paul. And last week, as you probably know by now, a jury that heard three weeks of testimony acquitted Heald and Paul completely.
Gary Corum, who represented Heald, was free to complain after the verdict, and he did — to me and to the Arkansas Democrat-Gazette. The jury understood the same defense that federal prosecutors had refused to understand, he said.
He didn’t name the prosecutors, but they were Harris and Jegley.
Federal prosecutors did manage convictions against two mid-level One Bank officers, Kelly Harbert in 2010 and Matthew Sweet in 2015. But Harbert and Sweet pleaded guilty to embezzlement schemes from which they personally benefited. Their crimes were related to the charges against the upper management only in that they underscored the freewheeling, self-dealing culture at Stuart’s bank. (That’s why federal regulators removed him from the management of his own bank back in 2012.)
For Heald and Paul, the jury’s verdicts were victory and vindication. For those of us who want to believe that the awesome power of the federal government is being wielded smartly, the verdicts were disheartening and depressing. If I were Thyer and kept being embarrassed by prosecutorial failures, I’d be looking to see if there were any common factors.
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Gwen Moritz is editor of Arkansas Business. Email her at GMoritz@ABPG.com. |
Centennial Bank of Conway is restarting its $2.6 million foreclosure action against Little Rock real estate investor Ron Lazenby.
The lawsuit against Lazenby, his wife, Toni, and the Ronald Lazenby Revocable Trust was put on hold in connection with the March Chapter 11 filing by RWL Investments LLC.
The venture that bears the initials of Ron Lazenby owns a mix of 25 commercial and residential properties in central Arkansas. The portfolio, which includes the famed Villa Marre in downtown Little Rock, secures more than $8.5 million of debt.
The Lazenbys personally guaranteed the RWL debt, and two west Little Rock homes they own are in play.
Centennial agreed to halt its February foreclosure suit to allow the couple time to sell RWL assets as well as their Chenal Valley home at 20 Chenal Circle and a house at 3217 N. Rodney Parham Road in the Pleasant Valley neighborhood.
“The basic plan was to give them six months to sell the bigger properties,” said Jim Penick, Centennial’s lawyer. “We didn’t get a contract on those properties, and the sand has run out of the hourglass.”
The 7,905-SF Chenal Circle abode and the 4,000-SF Pleasant Valley residence aren’t owned by RWL Investments but are tangled in the Lazenbys’ financial turmoil.
Among their creditors is the Internal Revenue Service, which filed a $120,822 lien for outstanding taxes from 2011-13. The IRS breakdown of taxes owed by the Lazenbys reads $22,266 in 2011, $60,979 for 2012 and $37,576 for 2013.
The highest profile property owned by RWL Investments is the Villa Marre at 1321 Scott St. in downtown Little Rock. The 135-year-old residence serves as the commercial home of RWL Investments as well as a destination for weddings and other events.
The historic house gained a national audience when exterior shots of the home were featured in each episode of the “Designing Women” TV series during its 1986-93 run.
The Villa Marre is among a group of 10 properties securing a nearly $2 million loan from First Community Bank of Eastern Arkansas in Marion. The bank is the single largest creditor of RWL Investments.
The portfolio of RWL Investments includes conventional commercial properties such as the 11,000-SF Village Green retail project at 3065 Hwy. 367 in Cabot, the 5,000-SF Winner’s Plaza office building in Maumelle and the 7,900-SF office project at 511 JFK Blvd. in North Little Rock.
In its Chapter 11 filing, RWL Investments claims to own assets worth more than $11.1 million. The list includes a healthy dose of residential renovation projects that helped the financial dominoes begin falling, according to Ron Lazenby.
“There wasn’t any one significant event,” Lazenby said. “We kind of got away from what we did well, which was managing commercial projects, and got into historical renovations.
“We weren’t able to generate the rents needed to support the cost of those residential projects.”
Centennial Bank is the second-largest creditor among a half-dozen lenders with delinquent loan claims against RWL Investments. The bankruptcy petition tallies the combined Centennial debt at $1.9 million.
While attempting to reorganize its debts in Chapter 11, RWL Investments received court approval to hire two real estate firms to help convert assets into cash.
The Charlotte John Co. was marketing eight residential properties in Little Rock, and Newmark Grubb Arkansas is marketing five commercial projects scattered across Little Rock, North Little Rock, Maumelle and Cabot.
To date, only one of those listings has sold.
A 2,050-SF house at 608 N. Spruce St. in the Hillcrest neighborhood brought $240,000 in September. The residence was among a group of four properties securing $1.3 million of debt held by BancorpSouth Bank of Tupelo, Mississippi.
The house was valued at $350,000 among RWL’s list of assets and specifically secured $295,715 of debt.
The gap among valuation, debt and sales price of the Hillcrest house doesn’t establish a good starting point to restore the fortunes of RWL Investments.
Stacy Wilson of Newmark Grubb Arkansas reports the sale of RWL’s 9,800-SF office building at 2 Van Circle is scheduled to close in the next few days.
“That’s a done deal,” she said, declining to reveal the purchase price in the pending deal.
The Village Green project and Winner’s Plaza have drawn offers, but the would-be buyers and lenders couldn’t find middle ground, Wilson reports.
“They were just too far apart in price,” she said.
According to its Chapter 11 filing, RWL Investments recorded annual revenue of $749,554 in both 2014 and 2015.
Even with the respite from debt service afforded by the Chapter 11 protection, the venture is operating at a loss.
“We’re in the process of trying to work out a plan and try to move forward,” Ron Lazenby said.
| First Community Bank of Eastern Arkansas | Debt Secured | |
| 5405, 5409 & 8211 Geyer Springs Road | Little Rock | |
| 5301 & 5307 Mabelvale Pike | Little Rock | |
| 1315 & 1321 Scott St. (Villa Marre) | Little Rock | |
| 103 & 105 42nd Place | North Little Rock | |
| 3000 Olive St. | Pine Bluff | |
| Total | $1,975,000 | |
| Centennial Bank | ||
| 7515 Geyer Springs Road | Little Rock | $638,875 |
| 10503 Stagecoach Road | Little Rock | $462,533 |
| 604 W. Daisy L. Gatson Bates Drive 1817 Broadway |
Little Rock | $434,426 |
| 2315 S. Chester St. | Little Rock | $199,096 |
| 2323 S. Chester St. | Little Rock | $183,537 |
| Total | $1,918,467 | |
| First Security Bank | ||
| 5111 JFK Blvd. 3306 H St. |
North Little Rock Little Rock |
$1,345,000 |
| 1921 Fair Park Blvd. | Little Rock | $75,000 |
| 1721-1725 Main St. | Little Rock | $25,000 |
| Total | $1,445,000 | |
| BancorpSouth Bank | ||
| 2 Van Circle | Little Rock | $613,000 |
| 1612 Broadway | Little Rock | $208,216 |
| 1619 Broadway | Little Rock | $153,910 |
| Total | $975,126 | |
| U.S. Bank | ||
| Winner's Plaza, 501 Millwood Circle | Maumelle | |
| Total | $935,000 | |
| Eagle Bank & Trust | ||
| Village Green, 3065 Hwy. 367 | Cabot | |
| Total | $835,450 |
Customers have been notified that the bank branch at 5701 Kavanaugh Blvd. in Little Rock will be closing in late January.
That should come as a surprise to approximately no one. The location was the last Little Rock branch of Allied Bank of Mulberry, which was shut down by regulators on Sept. 23 and acquired by Today’s Bank of Huntsville.
“This decision to close was purely a business decision because the old Allied did not have much success in Little Rock,” Larry Olson, CEO of Today’s Bank, told Whispers.
The branch was close to home for the Lex Golden family, which owned Allied. But it claimed fewer than 200 accounts and total deposits of about $1.1 million, and it required three full-time equivalent employees — which “is just an unprofitable situation,” Olson said.
That branch is leased, but the acquisition left Today’s with two other Little Rock branches that were closed before the bank failure. Olson is actively searching for buyers for those properties at 4900 Kavanaugh and 1022 W. Capitol Ave.
Olson has also hired veteran commercial lender David Scruggs, formerly of Summit Bank and Metropolitan National Bank, to help Today’s work through the problem assets that came with the acquisition. Scruggs, he said, has “a lot of expertise in workouts.”
Dale Cole, CEO of First Community Bank of Batesville, might be interested in one of those branches.
“We’re talking,” he confirmed.
First Community, you may know, is waiting for regulatory approval for an all-stock purchase of Little River Bancshares Inc., the holding company for Little River Bank of Lepanto in Poinsett County.
Cole expects that relatively small acquisition — $37 million in new assets for a bank that is approaching $1.17 billion — to be completed before the end of the year. No value for the acquisition has been released.
And he’s hinting at more news, but probably not another acquisition.
First Community’s typical M.O. has been to hire bankers in targeted markets and then open de novo branches. That’s how a privately-owned bank chartered in 1997 became one of the 10 largest chartered in Arkansas. (It did buy a small Missouri lender in 2008.)
If Cole is looking at branches in Little Rock, that might mean he’s got some talent picked out.
Seven new members have been elected to the University of Arkansas for Medical Sciences Foundation Fund Board.
The board, a subsidiary of the nonprofit University of Arkansas Foundation Inc., aims to secure private, philanthropic support for the benefit of UAMS.
Its members "serve as ambassadors and raise public awareness" of the role UAMS has in Arkansas. Members can serve up to three terms for a total of nine years.
"The UAMS Foundation Fund Board offers valuable support to UAMS as we strive to improve the health, health care and well-being of Arkansans," Chancellor Dan Rahn said in a news release. "We are grateful to these individuals for volunteering their time and expertise."
The new members are:
Home BancShares Inc. of Conway is expanding its Florida franchise in an $88.5 million transaction.
The parent company of Centennial Bank today announced the purchase of Giant Holdings Inc., the parent of Landmark Bank of Fort Lauderdale.
The addition of the $463 million-asset lender will push total assets at Home BancShares to about $10.2 billion.
Shareholders of Giant Holdings will receive $70 million stock and $18.5 million in cash. The stock-cash combo deal is expected to close during the first quarter of 2017 along with the merger of Landmark Bank into Centennial Bank.
"The acquisition of Landmark allows us to increase our market share in the Fort Lauderdale area," said John Allison, Home’s Chairman. "We consider this acquisition a smart deal, and it is immediately accretive to diluted earnings per share, book value and tangible book value.
"We have remained disciplined in our pricing in order to provide our shareholders added value on day one, while adding a great bank to our company."
Centennial already had the 29th largest bank presence in Florida as measured by deposits, and only 12 banks have more branches in the Florida than Centennial's 58.
Landmark, a national bank chartered in 1998, reported $52.6 million in equity capital as of June 30.
Net income for the first half of 2016 was $460,000, a steep decline from 2015, when the bank earned $2.63 in the first two quarters on its way to a $5 million annual profit. After chargeoffs in the first quarter, Landmark charged off $1.1 million in the second quarter.
Landmark recorded a profit of $4.87 million in 2014, the year it made an FDIC-assisted acquisition of a hometown competitor, Valley Bank, with $81.8 million in total assets.
CHICAGO - Wal-Mart Stores Inc. is in talks with several mobile wallet companies to offer more payment options in its Wal-Mart Pay app, an executive at the world's largest retailer said, after signing up JPMorgan Chase & Co. last week.
Starting next year, Chase Pay will become the first third-party digital wallet on Wal-Mart's website and app, they said on Thursday.
Customers can pay within the app with any major credit, debit, pre-paid or Walmart gift card.
Daniel Eckert, senior vice-president of services at Wal-Mart U.S., said in an interview late on Friday that the retailer would tweak its marketing for the app after the most frequent users turned out to be Gen X customers, born from 1965 to 1967, and baby boomers born from 1946 to 1964.
"The target demographic during the launch of a technology product tends to be younger, more male, so we have had that target market in mind," Eckert said.
U.S. mobile payments accounted for an estimated $67 billion in 2015, and are expected to grow this year to $83 billion, or 24 percent of all purchases made via smartphones, according to the latest Forrester Research data.
Apple Inc.'s Apple Pay or Alphabet Inc.'s Android Pay are the most popular digital wallets, and U.S. retailers have launched many mobile payment apps in the last two years.
But acceptance has been slow, largely because most systems require new equipment at stores.
Wal-Mart Pay was launched in December 2015 and can be used in all of the retailer's 4,600 U.S. stores.
Customers at the checkout counter must choose the payment option within the app on their smartphone, and activate the camera to scan the code at the register.
An e-receipt is sent to the app.
Eckert also said more than 90 percent of transactions on the app involve customers are using the service more than three to four times a month.
He declined to give the overall number of users who use Wal-Mart Pay.
Wal-Mart leads a consortium of U.S. retailers developing a mobile wallet app called CurrentC.
The group, which includes Target Corp. and Best Buy Co. Inc., said earlier this year it would delay launching the app after the project hit several roadblocks.
(Reporting by Nandita Bose in Chicago; Editing by Richard Chang)
The election is over, and Arkansas is now the latest of many states to have a medical marijuana law on the books.
Although the new amendment to the Arkansas Constitution is effective immediately, it should take some time for the approved use of medical marijuana to begin. At the very least, someone has to design and print the required "Registry Identification Cards" for users — unless one of your employees shows up with a registry identification card from another state and claims to be a "visiting qualifying patient."
So, what does the new law do? It allows (among other things) "qualifying patients" who have "qualifying medical conditions" certain protections in the workplace.
For instance, employers:
"Qualifying medical conditions" include cancer, glaucoma, HIV/AIDS, severe arthritis, post-traumatic stress disorder (PTSD), hepatitis C, Crohn's disease, fibromyalgia, ulcerative colitis and any "chronic or debilitating disease or medical condition" with symptoms such as peripheral neuropathy, "intractable pain," seizures, "severe" nausea or "severe and persistent" muscle spasms.
The Department of Health also can add to this list, although our guess is that it is not going to jump on that opportunity immediately.
Federal contractors will really have their hands full given the tug-of-war between federal and state law. Federal law still considers marijuana an illegal drug, although there are some legal prescription drugs, like Marinol, that contain THC or other marijuana derivatives.
Even if you are not a federal contractor, Arkansas employers may have differing obligations under the Arkansas Civil Rights Act, which covers disability discrimination, and the federal Americans with Disabilities Act. However, the Department of Transportation's drug and alcohol testing regulations still do not authorize "medical marijuana" under a state law to be a valid medical explanation for a transportation employee's positive drug test result.
There are also implications under Arkansas' workers' compensation laws.
One particular statutory section that defines compensable injuries states, "The presence of alcohol, illegal drugs, or prescription drugs used in contravention of a physician's orders shall create a rebuttable presumption that the injury or accident was substantially occasioned by the use of alcohol, illegal drugs, or prescription drugs used in contravention of physician's orders."
In other words, the workplace injury is non-compensable. Now, if medical marijuana use by an employee who is injured on the job is not inconsistent with a physician's orders, the previous presumption about the cause of the injury disappears.
Is there any good news for employers? To an extent, yes.
The new amendment does not require an employer to "accommodate the ingestion of marijuana in a workplace" and does not require an employer to allow an employee to work "while under the influence of marijuana." Nor does it require admission of a "guest, client, customer or other visitor" who is "inebriated" as a result of the medical use of marijuana.
Finally, the new amendment does not permit any person to:
So, how is this going to play out in the Arkansas workplace?
Let's take an example: assume you have an employee who appears to be under the influence of something. You require the employee to take a drug test, and he or she tests positive for marijuana or THC. What happens next? The law does not require an employer to allow an employee to work under the "influence" of marijuana. Unfortunately, we do not have a specific definition of "under the influence," but hopefully the Department of Health or the General Assembly will define that term for us.
It is interesting to note that the new amendment also talks about a person being "inebriated," and we assume being "inebriated" is a whole lot worse than simply being "under the influence." Regardless, an employer should do what it would normally do with any person appearing to be under the influence — objectively document as best as possible what was observed at the time and be ready to explain why being under the influence of anything (medical marijuana, a prescription drug or an illegal drug) in the employee's specific job is a bad idea.
We suspect the Arkansas Department of Health or the General Assembly will fine-tune this amendment (as they are allowed to do) to help everyone understand their obligations, so stay tuned.
All sorts of questions remain about the provisions of the amendment, some of which seem a bit contradictory.
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Attorney Stuart Jackson heads up the Labor & Employment Law team at Wright Lindsey Jennings in Little Rock. You can email him here and see this post on the WLJ website. |