Reuters
Quaint northwest Arkansas gets big-city makeover
Wednesday August 27, 1:59 pm ET
By Wesley Brown


FAYETTEVILLE, Ark., Aug 27 (Reuters) - When Procter & Gamble Co. (NYSEG - News) moved Tom Bechard to Arkansas to work with a big customer, Sam's Club, he imagined the stereotypical hillbilly neighbors and a life devoid of culture.
What he found was a burgeoning cosmopolitan area, with affordable housing, live theater and good schools in the fastest-growing region in the United States, thanks in large part to the draw of Arkansas-based Wal-Mart Stores Inc. (NYSE:WMT - News), the world's biggest company by revenue.

"It exceeded my expectations," said Bechard, who transferred to Northwest Arkansas from P&G's Cincinnati headquarters last year to handle the consumer products maker's sales of paper goods to Wal-Mart's Sam's Club warehouse unit.

"It reminds me of the suburb of a larger city without the city," he said. "It is a great place to raise a family."

Bechard is part of a new wave of upper-middle class workers moving to Northwest Arkansas, many of them employees of major consumer products companies who need to be close to their biggest customer, Wal-Mart.

Bechard's new hometown of Fayetteville and the surrounding region topped this year's Milken Institute ranking of the fastest-growing U.S. cities, based on job creation and local economic growth.

Fayetteville is the area's largest city with a population of about 60,000. Neighboring Benton County's largest city is Bentonville, home to Wal-Mart and about 40,000 residents.

FROM 'SAD-LOOKING' TO 'DYNAMIC'

Wal-Mart has literally transformed Northwest Arkansas from a rural backwater to a global economic engine. Helen Walton, widow of Wal-Mart founder Sam Walton, once described Bentonville as "just a sad-looking country town" when Sam Walton opened his first store there in 1950.

Five decades later, Wal-Mart employees and families of their vendors and suppliers, such as P&G and Kraft Foods Inc. (NYSE:KFT - News), are driving the area's growth, including an unprecedented housing and commercial construction boom.

Economist Jeff Collins, director of the Center for Business and Economic Research at the Sam Walton Business School, said Wal-Mart is not the only force behind the region's growth.

Two other Fortune 500 companies, Tyson Foods Inc. (NYSE:TSN - News). the world's largest meat company, and trucking giant J.B. Hunt Transport Services Inc. (NasdaqNM:JBHT - News), are also based in the area.

In July, residential and commercial permits in Northwest Arkansas were up more than 72 percent. The value of construction permits in the area's five largest cities topped $63.4 million, compared with $36.8 million in July 2002.

"Saying Wal-Mart has impacted the Northwest Arkansas economy is like saying water makes the ocean wet," Arkansas Gov. Mike Huckabee told Reuters in an interview.

"The mere presence of this company and the many jobs it provides is huge in itself, but the activities of those companies that seek to be close to the Wal-Mart headquarters for business reasons have also helped make the Northwest Arkansas economy the most dynamic in the country," he said.

Raymond Burns, head of the Rogers, Arkansas, Chamber of Commerce, said nearly every aspect of life has been touched by the world's largest retailer.

Besides the 11,000 employees at Wal-Mart's headquarters in Bentonville, there are more than 200 Wal-Mart vendors and suppliers that have set up shop in Northwest Arkansas.

That kind of expansion is expected to continue, bringing more middle-class jobs with salaries in the range of $50,000 to $75,000 a year, local officials say.

WORLD COMES TO WAL-MART

Wal-Mart spokesman Tom Williams said that the retail giant puts no pressure on vendors and suppliers to move to the region. He credits two critical infrastructure developments as key to the area's explosive growth over the past five years.

He cites the completion of an interstate highway in 2002, which allowed Fayetteville residents to easily commute the 30 miles to Bentonville over the region's hilly roads.

The $107 million Northwest Arkansas Regional Airport, completed in 1998, provides nonstop jet service to Dallas, Atlanta, Chicago, New York, Los Angeles and other major cities, connecting Wal-Mart with customers across the country.

According to a regional economic development study by the Northwest Arkansas Council, Wal-Mart, Tyson, J.B. Hunt and the University of Arkansas account for more than half of the region's recent growth.

But for Gov. Huckabee, there is no question that Wal-Mart alone has changed the way people think about Arkansas.

"Having Wal-Mart headquartered in Arkansas is like having a major automobile manufacturer, a computer giant, a large military base and an international airport all rolled into one enterprise," he said.