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Wal-Mart influences continue to push rapid growth in Bentonville

story by Steve Brawner, with Talk Business Magazine

Editor’s note: This story first appeared in the most recent issue of Talk Business Arkansas magazine. Link here for the online version of the magazine.

When Ralph Overstreet bought a watch repair shop on Bentonville’s town square in 1948, the city had less than 3,000 residents, no one had ever heard of Sam Walton, and outsiders weren’t particularly welcome.

“Actually, when I moved here, they seemed to resent any new person that came in. … It was a small town,” he said. “Apparently, they didn’t much want to grow.”

Overstreet, 97, who still works six days a week repairing watches at Overstreet’s Jewelry, has watched a lot change since then. What was once a sleepy rural town is now a community of about 40,000, with lots more on the way, for lots of reasons.

Bentonville’s story starts, of course, with Walmart. In 1950, Walton opened his Walton’s 5 & 10 on the Bentonville town square, not far from Overstreet’s shop, and became a fixture in the community, eventually serving as Chamber of Commerce president. After opening his first Walmart in Rogers in 1962, he opened the company’s first distribution center and home office in Bentonville in 1971.

Today, Walmart employs more than 2.2 million people globally, including 1.3 million Americans and tens of thousands in Northwest Arkansas. In addition, approximately 1,250-1,400 of the company’s vendors have offices there, according to Tom Ginn, Chamber of Commerce vice president of economic development.

“Most of the larger ones are here, obviously, the ones that do the most business … If you have somebody that has a lot of SKUs on the shelf, then more than likely they’re in the area,” he said.

Walmart’s impact can be felt in many other ways, starting with the Crystal Bridges Museum of American Art. Funded by the Walton Family Foundation under the leadership of Sam Walton’s daughter, Alice, the 200,000-square-foot museum exhibits about 500 pieces of art at any one time, all free to the public. It has welcomed more than 1.2 million visitors since it opened on Nov. 11, 2011. About 120,000 visitors saw a traveling exhibit of Norman Rockwell paintings in 2013.

Diane Carroll, interim director of communications, said about 60 percent of the visitors have been from Arkansas and another 20 percent from touch states, which means the other 240,000 have come to Bentonville from farther away. The museum counted 220,000 visitors who walked its beautiful outside trail last year.

The museum, which employs 150-200 full-time and part-time employees, hasn’t tried to estimate its economic impact, but its cultural impact is immeasurable. A wide range of art-making classes and programs are offered to the community. A program sponsored by the Walker Family Foundation pays all expenses for Arkansas schoolchildren to visit the museum. As of late January, 39,000 students have come. Meanwhile, artwork by Bentonville schoolchildren is displayed around the museum’s education area. Fellow museum professionals, art teachers and students converge at the museum to study, learn and collaborate.

The museum is in the third year of a four-year art-sharing partnership with the Louvre and two other museums. One of Crystal Bridges’ portraits of George Washington is currently in France. The museum’s culinary department brought New York’s James Beard Foundation to Bentonville to sample the Southern cuisine. In return, its chefs were invited to New York to display their craft. “It really elevated our regional cuisine to a national spotlight,” Carroll said.

DOWNTOWN REBIRTH
Crystal Bridges has been a catalyst for a rebirth of the downtown area.

The 21C Museum Hotel, part of a small chain of upscale hotels that display contemporary art, recently opened a 104-room facility just off the town square. Last year, the website TripAdvisor declared it the country’s number one “Hot New Hotel.” Anticipating a runoff effect from Crystal Bridges, the city has designated a downtown arts district where it expects galleries to open.

The museum was announced in 2005. Realizing how close it would be to downtown, Mayor Bob McCaslin and the city undertook a campaign to renovate the town square. In 2007, Bentonville voters easily passed five initiatives to raise the city sales tax by one cent to pay for a $110 million bond issue, part of which paid for the renovation. With its new look and the Crystal Bridges attraction nearby, the downtown area has gone from two or three restaurants to about 14 eateries counting food trucks, according to Kalene Griffin with the Bentonville Convention and Visitors Bureau.

More retail shops have opened, and the Walmart Museum, located in the old Walton’s 5 & 10 building, has undergone a major renovation.The new Midtown Shopping Center, built by Walmart, will feature retail spots including a Walmart Neighborhood Market grocery store as well as offices and a parking deck.

The city offers many other cultural amenities, with more on the way. Proceeds from the bond issue and other contributions are funding a $16 million, 80,000-square-foot recreation center. Just off the town square is a splash pad that converts into an outdoor ice rink during the winter months. There’s also a Museum of Native American History, and a new interactive children’s museum, the Amazeum, is opening in two years.

The fortunes of the city and the fortunes of the region are interconnected. Northwest Arkansas consists of a string of suburb-sized cities without an urban hub that work well in concert.

Mike Malone, president and CEO of the Northwest Arkansas Council, an economic and community development agency that supports the region, said the council developed a five-year plan in 2010 that included 56 projects. Of those, 53 have been completed, or work is underway. Among its goals was the widening of Interstate 540 from four lanes to six, which is happening because of the half-cent sales tax passed by Arkansas voters in 2012. Work is being completed on the Northwest Arkansas Razorback Greenway, a 36-mile walking and biking trail meandering through six downtown areas. Wayfinding signs pointing to attractions will have a consistent look city to city.

Moreover, Northwest Arkansas cities accept that an employer that locates in one community benefits all of them, so economic developers usually compete as a region, Malone said. The region will get on more potential employers’ radar screens when the population tips past 500,000, which is only 17,000 residents away. The area’s visitors bureaus share that spirit of cooperation. While there is friendly competition, Griffin said cities don’t suffer from “Friday night syndrome” – historical rivalries that get in the way of progress. After all, it’s hard to tell where one city ends and the next begins.

“If somebody calls me about a meeting that we can’t service, that’s too large for us, my goal is to pass it on to Rogers and Springdale and Fayetteville,” she said. “If it’s going to come, I want it to come into Northwest Arkansas because the city of Bentonville will benefit from it.”

GROWTH MODE
Bentonville’s population has doubled since 2000, which means that the Bentonville School District educates a student population that grows by 500 students a year. Voters last year approved a 2.9-mill increase to build a second high school. A larger request was rejected in 2012, but the school district scaled back plans to a smaller facility and arranged that both schools will share one football field – an appropriate Walmart-like efficiency. In fact, Walmart helped the district pass the millage.

Superintendent Mike Poore and school board member Becky Koontz visited then-Walmart president and CEO Mike Duke at the start of the effort asking for support. That led to a luncheon meeting with about 30 executives who, Poore said, “picked us apart for over an hour.” Poore later spoke to a larger Walmart audience, and the company sponsored a community survey that helped supporters tighten their message.

Poore, who came to Bentonville from Colorado, said leading the Bentonville School District involves a unique set of challenges and rewards. The district must assimilate many transient students, some from other countries. It educates executives from Walmart and its vendors, so expectations are high.

So, however, is the support the district receives. The Indian conglomerate Tata is helping the district with technology. Each month, the community hosts a First Friday event that brings booths, activities and musical acts to the town square. One month, the school partnered with Nickelodeon. Not long afterwards, Poore received a call from Disney asking why it hadn’t been involved.

“There’s things like that that happen on a pretty cool and regular basis here (with) people reaching out to us to say, ‘We’d like to partner with you and we want to support you,’ and I’ve never been a part of a community that gives more,” Poore said.

BLUEPRINT FOR OPPORTUNITY
Graduating Bentonville High students can drive half an hour south to the University of Arkansas, or they can stay in town and attend Northwest Arkansas Community College. Dr. Evelyn Jorgenson, the chancellor, said the school serves as a feeder for the university as well as a “safety net” for UA students who don’t thrive in the large freshman classes there. NWACC has created a track for students to transfer smoothly to the UA’s Sam M. Walton College of Business, and the two colleges have matriculation agreements in a number of other areas.

Credit enrollment is down about 6 percent to 7,546 students – a drop Jorgenson said was caused by an improving economy that attracts people to the workforce instead of college. However, non-credit enrollment has reached 6,000. Students in this program train for specific skills needed by employers. A retail analyst program, unlike any in the country, requires 45 weeks of classes to learn to run a proprietary software system used by Walmart and its vendors. Students who complete the program don’t get college credit, but they do get job offers.

Mayor McCaslin arrived in Bentonville in 1996 during a 30-year career moving from city to city with Kraft Foods and was elected mayor in 2006. He said getting elected without deep roots in the community wasn’t a problem. He guesses there were more residents from without than from within by about 2000, when the city was half the size it is today.

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“Most people that come in, they’re looking for friends, they want to establish relationships, and it’s been our experience that the friendliest communities often are the transient communities. … It just seems like a lot of people are hungry for friends,” he said. “I will tell you it’s been my experience that I’ve never seen a region that assimilates outsiders any better than Northwest Arkansas.”

The city is finishing a strategic economic development plan known as the Bentonville Blueprint. The objectives are to increase the livability of the area and target businesses and industries that complement existing entities as well as fill in holes.

Among the city’s challenges is land. Scattered subdivisions have been built to accommodate new residents, reducing the space for commercial properties. Meanwhile, the city is a bit landlocked, with Rogers to the south and east and Bella Vista to the north and west. There are corridors to the northeast, but also some hilly terrain. Moving forward, the city will have to fill in the empty areas, which it can do with planning. In fact, the Chamber of Commerce’s Ginn said it could more than double in size and still have the same population density.

Traffic will be a problem then, just as it is now. In fact, the entire Northwest Arkansas region suffers from a lack of roadways. Mayor McCaslin acknowledges that’s an issue. However, there are worse problems to have.

“Where you have traffic,” he said, “there’s something going on to cause that traffic to be there.”

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