Even the occasional good economic news nowadays is alloyed with the bad. Central Arkansas landed the biggest industrial prize of the era last week, but time will tell whether it was worth the high public cost.
For now, we must assume that it is and celebrate with Governor Beebe, Conway city officials and the economic-development establishment the announcement that Hewlett Packard, one of the leading technology companies in the world, will build a support center at Conway and employ 1,200 people, eventually. They will be upscale jobs, with starting salaries upwards of $40,000 a year and some jobs paying in six figures.
Arkansas has had to be content with industries that provide low-paying jobs in apparel, food processing and services.
Arkansas has lost out over and over to neighboring states in the quest for the big automotive plants that employ thousands and pay wages well above the median wage in Arkansas, but lately the governor and economic-development officials have been able to announce a few consolation prizes. Last year, LM Glasfiber announced that it would make windmill blades at Little Rock and employ 1,100 people someday.
Conway won over neighboring states and several suburban towns in Arkansas — apparently Jacksonville, Sherwood, North Little Rock, Cabot, Lonoke, Beebe and others weren’t considered good enough for the Hewlett Packard center, which also will start a slightly larger operation in an Albuquerque suburb. Three colleges, a large college-educated population, good transportation, the lack of sprawl and even a restrictive city sign ordinance were decisive factors for Conway. Those and, of course, eager government officials with limber pocketbooks. Arkansas has never before offered so many financial incentives to an industry, and we will never know whether those were essential to landing those jobs and the fat payroll.
Industries never say that the publicly financed incentives were decisive but, of course, every company is grateful and it is a rare one now that does entertain bidding from competing cities and states. Even the hefty incentives offered by Arkansas and Conway are only mousepads to a company that is 14th on the Fortune 400 list, but who can blame executives for exploiting every financial advantage that they can when they expand or move? Conway’s workforce, geographical and environmental advantages may have been compelling for the giant company, but few companies are willing to leave any money on the table when a little bargaining and teasing about competing offers will improve the bottom line.
Gov. Beebe put up $10 million from the quick-action closing fund that he had the legislature establish last year to help him in the bidding battles for new industry. The city of Conway doled out $5 million. The land at the Conway industrial development park will be free and a lease on the building that the city will build will be heavily subsidized. The state will rebate sales taxes to the company, give it a sizable credit on its income taxes for a few years, rebate 5 percent of the company’s payroll for 10 years if it meets the terms of a private and undisclosed agreement and, as always, help train the workforce. The city of Conway agreed to slash property taxes on the plant and equipment by 65 percent although the Conway schools, which depend upon property taxes, will have to educate an influx of students when the center reaches full employment.
Not all the terms of the taxpayers’ investment are known or intended to be known, but we trust the media will pursue the truth.
Arkansas taxpayers are making a sizable investment in the industry in hopes that it will provide good jobs for lots of Arkansas people and energize a lumbering economy that is shedding payrolls and jobs at an accelerating clip.
Is it worth it? Probably, although we wish that states and localities had not got themselves into these enervating bidding wars over industry. Arkansas did not start it and participates now with some desperation. The test will be whether the support center fulfills the company’s hiring promises and hangs around long enough to repay the public’s generous investment.
But the next time a big prospect comes looking, let’s hope our own communities right here will get a better shot at landing one — without giving away the store. With Little Rock Air Force Base and a nearby college-level education center scheduled for construction next year, another high-tech prospect should take a more serious look at us.
With that, we extend a medium-sized hello to our newest corporate citizen. Welcome to Arkansas, Hewlett Packard.
