Fort Smith: Economy – Major Industries and Commercial Activity, Incentive ProgramsNew and Existing Companies

Major Industries and Commercial Activity

Fort Smith is the manufacturing hub of Arkansas, with more goods produced in that vicinity than anywhere else in the state. National and international companies such as Weyerhauser, Gerber Foods, Whirlpool Corporation and Rheem Air Conditioning Products have facilities in Fort Smith and employ thousands of area workers to generate wood and paper products, food products, air conditioning system components and appliances. Recreation and tourism, particularly structured around the unique history of Fort Smith, is a growing industry with a workforce that is growing apace.

Items and goods produced: air conditioning systems, food products, appliances, paper products, wood products, composite building materials

Incentive Programs—New and Existing Companies

Local programs

In conjunction with the Arkansas Department of Economic Development, Fort Smith offers a variety of investment and job creation incentives designed to attract and retain thriving businesses.

State programs

Arkansas' incentive plan was updated in 2003; counties are divided into four tiers based on rates in the areas of poverty, unemployment, per capita income and population growth. More lucrative incentives are offered for businesses that choose to locate in underserved counties.

Start-up businesses can take advantage of several incentive packages, including Advantage Arkansas (an income tax credit program), Tax Back (refunds of sales and use taxes), and InvestArk (a sales and use tax credit program). Businesses in highly competitive categories such as manufacturing, agriculture and information technology may be eligible for incentive programs such as Create Rebate (payroll rebates) and the ArkPlus income tax credit program.

The State of Arkansas additionally provides specialized incentive programs to encourage development of specific components of a business (child care facilities, customized training, recycling) or to recruit particular industries to the area (motion picture companies, tourism businesses).

Job training programs

The Arkansas Construction Education Foundation Training Program offers classroom and real-world experience through apprenticeship programs in Fort Smith and three other Arkansas locations. The University of Arkansas Fort Smith's Center for Business and Professional Development partners with local companies to develop skills of employees.

Development Projects

With Community Development Block Grant (CDBG) funding, the City of Fort Smith is implementing a 5-year strategic action plan to address affordable housing issues, increase resources for the homeless, and attract corporate expansion and relocations in the metropolitan area to increase employment opportunities for mid- and low-income community members. A number of the plan's strategies seek to increase the income of workers in relation to their rental or mortgage burden, with tactics to include promotion of General Education Development (GED) programs that serve adults, encouragement of higher education for workers, and provision of quality childcare services that will allow parents to work outside of the home.

Downtown Fort Smith has experienced a renaissance in response to a growing tourism and convention market. The Fort Smith Downtown Development association has thrown considerable energy into recruiting businesses into the area and into increased valuation of properties, including $55 million in improvements to the Fort Smith Convention Center, the Riverfront Development and Garrison Street. Building on the draw of Fort Smith's history, the municipal government has agreed to restore brick streets in the Belle Grove Historic District in downtown.

Nearby Fort Chaffee is undergoing change at the start of the new century as well. The Fort Chaffee Redevelopment Authority, created in 1997 after the base was closed in 1995, is in the process of creating residential, commercial and industrial resources on 7,000 acres of former military land. The new Chaffee Crossing will preserve the local history of the fort while offering modern facilities, parks, homes and business opportunities. Some office and warehouse buildings are already available for leasing; the remainder of the project is still undergoing development.

Economic Development Information: Fort Smith Regional Chamber of Commerce, PO Box 1668, Fort Smith, AR 72902; telephone 479-783-6118; email info@fortsmithchamber.com

Commercial Shipping

Sited at the confluence of the Arkansas and Poteau Rivers, the Port of Fort Smith is experiencing growth in tonnage, primarily composed of steel and scrap metal, passing through its terminal and on through the Mississippi River system. The port is served by the Arkansas-Missouri Railroad and a variety of trucking companies. In general, local trucking companies have seen continued demand for service as they transport general commodities throughout the United States. Air freight services are also available through local companies and the Fort Smith Regional Airport, which serves an eight-county area.

Labor Force and Employment Outlook

With a strong base of manufacturing and the recent addition of a major medical center, Fort Smith is experiencing an upswing in employment, as evidenced by decreased layoffs compared to years previous. From 1990 to 2001, the Fort Smith metropolitan area demonstrated a 26.2% growth in nonfarm employment, compared to a rate of 25.2% for the state of Arkansas. Mainstay local manufacturers such as Gerber Foods, Weyerhauser, Rheem Air Conditioning and Whirlpool Corporation all provide products for which there appears to be relatively stable demand, thereby minimizing employment fluctuations. Growing areas of employment include health services, as well as leisure and hospitality. With a growing and involved local university, Fort Smith is seeing increasing support for professional and business service professions. According to the U.S. Department of Labor, a long term shift from goods-producing employment to service-producing activities is expected.

The following is a summary of data regarding the Fort Smith metropolitan area labor force, 2003 annual averages.

Size of nonagricultural labor force: 99,700

Number of workers employed in . . .

natural resources and mining: 1,000

construction: 4,500

manufacturing: 25,400

trade, transportation and public utilities: 19,700

information: 1,600

financial activities: 3,600

professional and business services: 9,700

educational and health services: 12,800

leisure and hospitality: 7,200

other services: 2,800

government: 11,400

Average hourly earnings of production workers employed in manufacturing: $13.73

Unemployment rate: 4.5% (November 2004)

Cost of Living

2004 (3rd Quarter) ACCRA Cost of Living Index: 85.7

2004 (3rd Quarter) ACCRA Average House Price: $205,946

State income tax rate: Ranges from 1% on the first $3,999 of net taxable income to 7% on amounts over $27,500

State sales tax rate: 6%

Local income tax rate: 1.5%

Local sales tax rate: 2% on taxable goods and services

Property tax rate: Assessed valuation is equal to 20% of the market value of property

Economic information: Fort Smith Regional Chamber of Commerce, PO Box 1668, Fort Smith, AR 72902; telephone (479)783-6118; email info@fortsmithchamber.com