Hutchinson OKs bond deal for proposed defense project
LITTLE ROCK—Legislation that Gov. Asa Hutchinson signed into law Friday authorizes an $87 million incentive package to help lure a major defense project to Arkansas.
The governor called legislators back to Little Rock for a special session that wrapped up Thursday, listing the potential incentive package as the top agenda item. The incentive proposal calls for issuing bonds if Lockheed Martin is the successful bidder for a military vehicle assembly contract for its Camden facility.
The bonds won’t be issued unless Lockheed wins the contract, which is expected to be awarded late this summer.
“They’re in a very competitive position,” Hutchinson said. “I’ve tried to do my own background research, talk to the federal delegation ... my sources at the Defense Department just as to what are the opportunities here. And I think they’re good, but it is a competitive environment.”
Two other companies— Indiana-based AM General and Wisconsin-based Oshkosh Defense—also are pursuing the contract as the U.S. military seeks to replace the Humvee.
The proposal received wide support from both chambers, passing 90-0 in the House and 30-2 in the Senate.
Mike Preston, executive director of the Arkansas Economic Development Commission, said he believes the incentive package will give the Camden facility an advantage in its proposal.
“The showing of support from the Legislature, and knowing that you have such a supportive governor to pass this package that Lockheed Martin is now going to be able to put as part of their proposal, really helps their pricing when they’re in front of the Department of Defense,” Preston said.
He said the contract will help the company keep more than 500 jobs and bring close to 600 more to the state. Preston said additional jobs from suppliers and other support companies also could move into the state.
If Arkansas wins the bid, it would be the second time the state issues bonds under a 2004 voter-approved constitutional amendment aimed at helping land major economic deals. Lawmakers two years ago approved $125 million in bonds for a steel mill under construction in east Arkansas.
Arkansas officials say they expect the state to pay off the bonds in 15 to 20 years. The state would spend between $109 million and $122 million for the bond repayment and interest, depending on how the bonds are structured.
Hutchinson also signed other bills Friday along with a resolution passed during the special session. They included a bill approving a one-year plan to move Arkansas’ primaries from May to March in 2016 and a bill that will consolidate several smaller state agencies into larger ones.