Local economy continues to thrive
Jonesboro Sun
Grover Welch
11/15/2005
JONESBORO -- Target has posted retail sales of 400 percent above initial projections since opening in the Mall at Turtle Creek in October, said local developer Bruce Burrow of MBC Holdings, LLC, of Jonesboro. He added that J.C. Penney has posted 300 percent above projections.
"This is because our research was accurate, and the community and its outlying districts are able to support the investments," Burrow said about the first two stores open in the new mall. "I firmly believe this is a surge that will only continue through the mall's opening [expected in March] and beyond."
The comments were made during a presentation to more than 100 local business leaders, educators and students attending the 10th annual Economic Outlook Conference at the Arkansas State University Convocation Center Monday.
The conference, hosted by Regions Bank and the ASU College of Business, also featured economists Michael H. Strauss, chief economist and chief operating officer of Commonfund Asset Management company, and Dr. John Shelnutt, an administrator for economic analysis and tax research with the Arkansas Department of Finance and Administration in Little Rock.
"This conference is held to further the development of our region and state," said Larry Worsham, president and chief executive officer of Regions Bank.
"We hope business and companies will benefit from an understanding of where we have been and where we are going as they prepare for the 2006 business cycle."
Burrow led off the conference with a presentation on the effects of his retail development on the Jonesboro economy.
"We seek to be a good community-based developer," he said. "We understand that our developments will only strive when there are good infrastructures in place. To that end we have approached development in the Northeast Arkansas region as a supporter of the community."
In a study financed by the developer it was determined that two jobs were created for every 100 square feet of retail space created.
"Currently Jonesboro has 3.5 million square feet of retail space in NEA, and that calculates into about 7,000 local retail jobs," Burrow said.
Though industry brings in better paying jobs, retail is different because it has a local base and cannot be outsourced overseas for cheaper labor, he said.
Burrow's firm began looking in the NEA region more than 40 years ago and has become the largest retail taxpayer in Craighead County, he said.
Burrow also spoke to attendees about the necessity of location and the factors that shape good location.
"Location goes deeper than age, population, etc.," he said. "We have worked hard to define not only the city of Jonesboro but the regional aspects that shape business in the NEA region."
Burrow pointed to the economic and geographic benefits Jonesboro has when reaching out to customers from cities such as Marion and Blytheville.
"Those consumers who live within driving distance of Memphis or Cape Girardeau, Mo., will find that the centrally located Jonesboro mall or other local businesses have an appeal, and this is a factor we have to consider.
"The goal is to become a retail and patron friendly community with solid infrastructure and community development," he said. "We put great care into our developments, like the improvements we have made to the Turtle Creek flood plain that resulted in over 500 homes being removed from the requirement of flood insurance."
The Mall at Turtle Creek represents more than $100 million in investment in the area and is projected to have annual retail sales of $225 million, Burrows said.
Both city and county taxes would be upward of $2.5 million, he added.
The development included a $6 million upgrade to drainage that eased flooding in the community surrounding the mall project. The creek was widened and then extended into a 9-acre pond meant to offset flooding.
"This was a significant infrastructure improvement we undertook because we believe in the development," he said.
Burrow also outlined his opinion that tax increment financing, a system whereby projected tax base dollars are used to fund bonds to go into infrastructure improvements, aiding in the development of the project.
"Many dispute the TIF as taking tax revenue away from schools. However, I believe that the revenue they will receive off the developed project, even with TIF financing, will far outweigh the taxes they would have received if no project was ever funded, and in fact, the projects will help put money in through the sales tax base as well," he said.
Burrow also announced plans to participate in the revitalization of the Jonesboro downtown area, citing the recent purchase of two buildings that will be part of MBC developments in the area.
Shelnutt told attendees that overall the Arkansas economy looks positive through 2006.
"Arkansas will diverge from the economic slow down in the rest of the United States, and instead see gains from rebuilding efforts in the devastated hurricane regions," Shelnutt said.
Strauss told attendees that strong international pressure will continue to force a slow down in U.S. economic projections.
"As we are faced with the devastation of our fifth largest port and the disrupted distribution system of the Mississippi, we will see definite economic ramifications on foreign commodities markets," Strauss said.
Both economists pointed to government decisions on interest rates and bond programs as indicators over the next year.
"The situation nationally is tenuous, and it will more than likely fall to the Fed [Federal Reserve] to find new ways to manage the economy, besides interest rate adjustments," said Strauss.
gwelch@jonesborosun.com | Copyright 2005, Jonesboro Sun