Posted 5/30/2014 01:39 pm
Updated 7 months ago
ArcBest Corp. of Fort Smith said Friday that it will buy 40 acres of land at Chaffee Crossing in Fort Smith to build a new corporate headquarters. The $30 million project will allow the firm to support 975 new jobs in Fort Smith through 2021.
The company, which changed its name from Arkansas Best Corp. on May 1, says it has exceeded capacity at its 195,000-SF Fort Smith office on Old Greenwood Road and at other leased office space as its five subsidiaries have grown.
CEO Judy McReynolds said the project marks "another great milestone in the evolution of our company."
"With plans for growth at all of our operating companies, including ABF Freight, ABF Logistics, Panther Premium Logistics and FleetNet America, it is important that we develop additional space to accommodate these expanding businesses,” McReynolds said.
"Our decision to build a new facility in Fort Smith for the ArcBest and ABF Logistics companies underscores our long commitment to this area, and we are grateful for the commitment from the city, the Fort Smith Chamber of Commerce and the state to help us meet our needs," she said.
City and state leaders are pitching in with incentives. The city of Fort Smith plans to vote next week on tax-back incentives on building materials for the project. And the Arkansas Economic Development Commission has offered its Create Rebate, a tax refund based on job creation that could save ArcBest $16 million to $19 million over 10 years.
ArcBest has set a goal to grow total corporate revenue to $3 billion by the end of 2015, with $1 billion coming from its emerging businesses, including "asset-light" logistics services like Panther Premium Logistics and ABF Logistics. In 2013, revenue grew 11 percent to $2.3 billion, the company said.
Tim Allen, president and CEO of the Fort Smith Chamber of Commerce, said average salary figures for the new jobs haven't been released, but that expects salaries for those positions in the $50,000 to $100,000 range.
Shuffling the Deck
Walter Echols, ArcBest’s vice president of real estate, said Friday that the company has yet to select a project architect and contractor for the new building. But some general plans are in place.
The company is paying $400,000 for the 40-acre tract at Chaffee Crossing. The new building will be 120,000 to 150,000-SF, smaller than the corporate center on Old Greenwood Road. Data center functions will be in the basement of building, which will have three or four additional floors.
Executives said operations of ABF Freight will remain at the Greenwood Road facility, along with ArcBest Technologies, the company’s IT group. ABF Logistics, along with ArcBest's corporate and administrative functions, will move to the newly constructed office building.
A groundbreaking on the new facility is set for fall, with a completion date of late 2015 or early 2016.
Friday’s announcement came as ArcBest is considering moving a key terminal -- and its more than 300 jobs -- from North Little Rock to Memphis.
ABF Freight has been offered a $4 million incentive by the Economic Development Growth Engine of Memphis & Shelby County. ABF is considering a $20.5 million terminal expansion there that would create 283 jobs. ABF Freight already has a terminal on Dunn Avenue in Memphis.
Gov. Mike Beebe on Tuesday met with representatives of the Teamsters union, which represents employees at the North Little Rock distribution center. The Teamsters met with Beebe about keeping the center at Springhill Road.
Beebe did not attend Friday's announcement, citing the situation over the terminal. Spokesman Matt DeCample said that while Beebe is excited about the new jobs in Fort Smith, Beebe felt it would be inappropriate to attend the announcement with ArcBest employees in North Little Rock facing an uncertain future.
DeCample said he did not know whether Beebe has held direct talks with ArcBest executives about the terminal, but noted that the AEDC has kept contact with the company. AEDC Executive Director Grant Tennille attended the Friday announcement.
ArcBest’s David Humphrey, vice president of investor relations, and Kathy Fieweger, vice president of marketing and communications, said Friday that, to their knowledge, company executives had not had direct talks with the governor.
"We’re really happy Grant Tennille showed up," Fieweger said.
As for the fate of the North Little Rock terminal, Humphrey said there’s no timeline for a decision. He said ArcBest is modeling the various options to see what works best.
ArcBest’s expansion plans also come as ArcBest rebrands itself as a global trucking and logistics player.
ArcBest changed its name from Arkansas Best Corp. on May 1, rolling out new logos and branding, a new stock symbol and a new website. The company told Arkansas Business earlier this month that the move to a non-trucking-specific name was deliberate, an effort to better define the growing parts of its business, which include data-driven logistics services.
Founded as OK Transfer in Fort Smith in 1923, ArcBest has 11,000 employees and five subsidiaries. The biggest and oldest is ABF Freight, a less-than-truckload carrier that transports goods throughout North America for clients including small businesses and Fortune 500 companies.
Its other subsidiaries are ABF Logistics, which was founded in 2013 and provides third-party logistics services that include brokerage, intermodal transport, ocean transport and transportation management; Panther Premium Logistics, which ArcBest acquired in 2012 and arranges ground, air, ocean shipping and other services; and FleetNet America, which provides maintenance and repair for commercial and private fleets.
The company’s latest financials show ABF Freight accounting for the lion’s share of revenue. But the asset-light logistics services, including Panther, are bringing in a growing share of business.
"The core element company, ABF Freight, has been around for a long time," Fieweger, told Arkansas Business for a May 12 story. "We also have the personal moving business, which is partially in Fort Smith and partially in Wichita Falls, Texas. The company has operations all over the country.
"Then with the services we provide through ABF Logistics, really a global capability. We felt a newer name would allow us to retain that heritage of the existing company but combine it with something that is a little more progressive."