Financial Technology

REX NELSON: Big on Little Rock

Dozens of commercial real estate agents are packed into a conference room in what once was part of the Alltel complex in Little Rock’s Riverdale neighborhood. The subject is Arkansas’ capital city–where things stand now and where they’re headed. Those in the audience have a vested interest in how the state’s largest city performs economically.

As I point out whenever I write about Little Rock, readers across the state also have a vested interest. That’s because Arkansas will never achieve its potential unless its capital city thrives. The northwest Arkansas economy can’t carry a whole state by itself.

Business and civic leaders in Little Rock do themselves no favors when bemoaning the fact that northwest Arkansas’ population growth rates far surpass those in central Arkansas. Few places in the country are growing at the rate of northwest Arkansas.

Arkansas is a state of just 3 million people, a place where more than two-thirds of counties are losing population. It needs both northwest Arkansas and the Little Rock metropolitan area doing well. It’s not either/or. It’s both/and.

It’s also unfair to compare Little Rock to Austin, Texas, and Nashville, Tenn. Austin and Nashville are the capitals of far larger states. They’re also the homes of world-class institutions of higher education, the University of Texas and Vanderbilt University.

Arkansas’ capital city has the University of Arkansas at Little Rock, long a stepchild in the UA System to the flagship campus in Fayetteville.

A better comparison could be made to Jackson, Miss., and Montgomery, Ala., Southern state capitals that, like Little Rock, lack top-rated universities. In the 1980 census, Jackson had a population of 202,895. By the 2020 census, the population was down to 152,846. Jackson’s population is now less than 150,000 as people continue to flee a city with increasing crime rates and collapsing infrastructure.

Little Rock had 158,461 residents in the 1980 census. By 2020, the population was 202,484. The two cities went opposite directions during a 40-year period. Jackson had about 44,000 more residents than Little Rock in 1980. By 2020, Little Rock had 50,000 more residents than Jackson.

Birmingham had 340,887 residents in the 1960 census. By 2020, the population had dropped to 197,575. Little Rock’s 1960 population was 107,813. Birmingham was more than three times as large as Little Rock in 1960. Now, Little Rock has more residents.

Growth in Little Rock tends to be slow (especially when compared to what has happened in surrounding counties such as Faulkner, Saline and Lonoke), but it has been steady. I told the commercial real estate agents that I’m bullish on Little Rock’s future based on five things:

• Little Rock is the government, financial and legal capital of the state. I often joke that if the folks in northwest Arkansas could get the state Capitol dome through the Bobby Hopper Tunnel, they would have moved it by now.

Those of us who are fiscal conservatives might wish otherwise, but government will continue to grow. Along with government expansion will come the growth of state associations, lobbying firms, etc. That bodes well for Little Rock.

Throw in the emergence of Little Rock as a regional banking hub with Bank OZK and Simmons Bank leading the way. Bank OZK built a spectacular headquarters in far west Little Rock. Simmons, which purchased the former Acxiom headquarters in the River Market District, filled that building with employees faster than expected and bought the former Bank OZK headquarters on Chenal Parkway.

• Little Rock is the health-care hub for the state. With nationally recognized institutions such as the University of Arkansas for Medical Sciences and Arkansas Children’s Hospital, patients from other states also come here for treatment.

Far more elderly residents in the years ahead will mean additional medical care is needed. That trend will benefit existing medical hubs. Just like government and banking, the health-care trend works strongly in Little Rock’s favor.

• The Little Rock area (including Maumelle and North Little Rock) is becoming a logistics and distribution hub. When Amazon built enormous facilities at the Port of Little Rock and on the other side of the Arkansas River in North Little Rock, it sent a strong message to other companies. Now, Lowe’s and Dollar General will build distribution warehouses near the Amazon facility in North Little Rock. Tractor Supply will build a similar facility at Maumelle.

The complexes built or scheduled to be built by these four companies–Amazon, Lowe’s, Dollar General and Tractor Supply–represent thousands of jobs that weren’t here two years ago. Expect to hear announcements concerning additional distribution centers during the next couple of years.

• Little Rock has expanded its role as the home of the financial technology industry thanks to summits and accelerator programs sponsored by the Venture Center, headquartered downtown in the Little Rock Technology Park. The Venture Center’s work likely will lead to one or more major fintech employers deciding to call Little Rock home during the next decade. That’s in addition to growth of high-tech companies such as Apptegy in the Riverdale neighborhood and First Orion in North Little Rock.

• Little Rock and North Little Rock are regional retail, dining and entertainment destinations. There’s perhaps no finer concert booker in the country than Michael Marion at Simmons Bank Arena in North Little Rock. It’s often said that Little Rock is a far better dining destination than most cities its size. Retail suffered during the pandemic, but Little Rock is blessed with several visionary developers who in recent months have announced plans to revitalize the Breckenridge Village and Riverdale shopping centers. Look for more announcements along those lines as Little Rock is considered “hot” again by national retailers and restaurant companies.

If Little Rock’s leadership will make the right moves in five key areas (that will be the subject of Wednesday’s column), the above trends could make the next decade a golden era for the city.

Consider the fact that Bank OZK and Simmons aren’t alone in transforming Little Rock into a regional banking hub. Go to the intersection of Chenal and Rahling and look at the facilities First Community Bank and Southern Bancorp are constructing. I’m not saying Little Rock will become Charlotte, N.C., as far as being a national banking center. But no one could have seen this kind of financial sector growth coming a couple of decades ago. It’s amazing to watch.

Consider the fact that UAMS, Arkansas Children’s Hospital, Baptist Health, CHI St. Vincent and CARTI aren’t the only growth engines in the health-care sector. If Lyon College’s plan to open dental and veterinary schools comes to fruition (and I believe it will), those schools will bring more than 1,000 students, faculty members and staff members downtown each day once they are at capacity.

That, in turn, should lead to a downtown residential boom as currently empty structures such as the Donaghey and Boyle buildings on Main Street are converted into apartments.

Consider the fact that in addition to becoming a distribution hub, Little Rock is experiencing success in the area of manufacturing. Trex will bring more than 500 jobs to the Port of Little Rock with its facility that makes composite decking. The port is also about to have a so-called supersite of almost 1,000 acres that economic development officials tell me will be the best site of its kind in the South for something such as an automobile assembly plant.

Put these pieces together and you can see why those commercial real estate agents were smiling as I spoke. The folks in Jackson and Birmingham can look to the west and wish they had a similar outlook.


Rex Nelson is a senior editor at the Arkansas Democrat-Gazette.

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