Sustaining a boom

Just when you thought the economy couldn’t possibly get any hotter in Northwest Arkansas, news came down last month that Tyson Foods plans to consolidate corporate operations at Springdale. The company will bring almost 1,000 additional white-collar jobs to a campus that already has 2,000 workers.

Think about that. The addition of 1,000 professionals is the equivalent of a major corporate relocation. Once you include families, it will mean several thousand new residents. These will be accomplished and well-compensated employees who will be active in civic organizations, their children’s schools and churches. They will spend money in restaurants, visit area retailers, and hopefully travel on weekends to other parts of the state.

This news comes at the same time Walmart is building a corporate campus that will be unlike anything this part of the country has ever seen. It comes at a time when the already spectacular Crystal Bridges Museum of American Art is expanding. It comes at a time when Alice Walton is building a medical school. It comes at a time when the region is turning itself into the mountain biking capital of the country. It comes at a time when the University of Arkansas has record enrollment.

Tyson will bring jobs from two offices in the Chicago area and one in South Dakota. If employees don’t move, they’ll be offered severance pay based on years of experience. Their jobs then will be advertised for people who wish to work in Springdale.

Company officials say they’ll release details soon on the corporate campus expansion. Much like Walmart is doing in Bentonville, it’s expected to include indoor and outdoor spaces that foster collaboration.

In 2001, Tyson purchased IBP, and its home office in South Dakota remained the headquarters of the company’s pork and beef operations. In 2014, Tyson acquired Hillshire Brands and kept most of those corporate jobs in Illinois.

According to Nelson Peacock of the Northwest Arkansas Council, about 60% of those working in Northwest Arkansas relocated to the region from elsewhere. Skeptics will take all of this positive news with a grain of salt and then ask, “Yeah, so what about affordable housing?”

The good news is that it’s something business and civic leaders already are addressing. They’re determined not to repeat the mistakes of other high-growth areas such as Austin, Texas. Earlier this year, in fact, the Northwest Arkansas Council released a report titled “Northwest Arkansas Regional Strategy: 2022-26.”

Richard Florida’s Creative Class Group prepared the report. Florida, an internationally recognized expert on urban affairs and the rise of the creative class in America, spoke at a luncheon in Northwest Arkansas.

“This report isn’t saying ‘stop growing,’” Florida said. “What’s needed is a smart and intentional strategy for continued growth.”

According to data released during the luncheon, home prices have increased 47% in Washington County and 43% in Benton County the past five years. Florida said housing affordability and what he calls “quality of place” must be the focus of Northwest Arkansas’ talent attraction and economic development strategies.

“Northwest Arkansas has reached a critical inflection point, generated in large measure by its incredible economic success,” the report said. “The region must act boldly to avoid the new urban crisis that’s vexing regions from San Francisco and New York to Seattle, Denver, Austin and Nashville by taking the required steps to ensure that its housing remains affordable and that its quality of life is protected for all to enjoy.

“If a strengthened and potentially expanded Northwest Arkansas Council focuses on these challenges and areas of opportunity, there’s every reason to expect that Northwest Arkansas can avoid the pitfalls of the new urban crisis while generating a more inclusive and sustainable prosperity. The time to act is now.”

The report noted that Northwest Arkansas achieved its “stunningly successful growth model” due to four things:

• “Strategic investments in quality of life such as the world-class Crystal Bridges Museum of American Art, The Momentary, charming downtowns and an extensive network of hiking and biking trails.”

• “Leading-edge efforts to attract, retain and develop talent.”

• “Leveraging its core economic assets and competitive clusters, including its three Fortune 500 companies — Walmart, J.B. Hunt Transport Services and Tyson Foods.”

• “Expansion of its innovation and entrepreneurial ecosystem through investments in technology transfer and commercialization at the University of Arkansas, while bolstering its startup scene and its angel and venture capital investment networks.”

Northwest Arkansas ranks fourth among metropolitan areas with more than 500,000 residents in population growth since 1990. It ranked third in job growth from 2013-18. In U.S. News & World Report’s 2021 ranking of best places in the country to live, Northwest Arkansas was fourth behind Boulder, Colo.; Raleigh-Durham, N.C.; and Huntsville, Ala. It was ahead of Austin, by the way.

“The successes were underpinned by the region’s relatively affordable housing prices, which enabled Northwest Arkansas to provide quality of life to its residents for a low price,” the report said. “But the fruits of that success are creating challenges for the region as rapidly rising home prices threaten to undermine its affordable quality of life.”

Florida first visited Northwest Arkansas in 2018. He warned area leaders back then of the challenges that can accompany growth. A year earlier, he had released a book titled “The New Urban Crisis.” It detailed how housing costs and economic inequality were undermining the previous success of cities such as New York, London, San Francisco, Boston and Seattle.

According to the report: “Accelerated by geographic shifts spurred by the pandemic, that crisis quickly spread to growing ‘ rise of the rest’ regions like Austin, Miami and Nashville, as well as smaller ‘ Zoomtowns’ such as Bozeman, Mont., and Park City, Utah. Now that crisis of success has made its way to Northwest Arkansas. A single data point helps illustrate the rapidity with which it struck and the urgency of the need to act.

“Of all 350-plus U.S. metros, Northwest Arkansas witnessed the second largest yearover-year increase in its median home price between May 2021 and May 2022 — 28.8%, an absolute increase of nearly $75,000. An intentional strategy is required to address these challenges while keeping the region on track to maintain its growth.”

Florida urged the region’s leaders to do five things:

• Continue the focus on developing, attracting and retaining diverse talent.

• Expand efforts to bolster the innovation economy and entrepreneurial ecosystems.

• Put significant focus and investments on addressing the challenges of growth, providing affordable housing and preserving character and quality of life.

• Keep building on Northwest Arkansas’ brand as a vibrant, thriving, up-and-coming and inclusive community that offers a high quality of life for all.

• Expand the civic capacity of the Northwest Arkansas Council and related organizations to address challenges and needs.

“Northwest Arkansas must redouble its efforts to maintain a business and social climate that’s open to all who choose to call it home,” the report said. “Research shows welcoming regions are more economically competitive. In today’s politically divisive climate, it’s more important than ever to be — and be known as — a place where anyone can thrive.

“Working to slow growth isn’t an option, as that could lead to less opportunity for Northwest Arkansas residents. Rather, the region needs a strategy to address its worsening housing affordability, prioritize its investments in infrastructure and ensure that opportunity is inclusive and equitable.”