Spartan Logistics Puts Its Money on Fort Smith

Spartan Logistics Puts Its Money on Fort Smith
Ed Harmon, chairman of Spartan Logistics of Columbus, Ohio, and his son, Steve, have purchased approximately 1 million SF of warehouse space in Fort Smith. (Kat Wilson)

Ed and Steve Harmon never planned to set down such stakes in Fort Smith.

The father-and-son Harmons head Spartan Logistics, a trucking and warehousing company based in Columbus, Ohio, and in the past 18 months, Spartan said it has invested approximately $20 million to buy and renovate more than 1 million SF of Fort Smith warehouse space.

Spartan’s latest purchase came this year when it spent $7.8 million on the 420,000-SF Riverside Furniture building on Jenny Lind Road.

Riverside is across the street from the former Whirlpool complex, which closed when the company left Fort Smith in 2012. In October 2014, Spartan bought a 620,000-SF distribution center on the grounds.

“When we came to Fort Smith, we didn’t think we were going to buy one building and now we own 1 million SF,” said Steve Harmon, the managing director of Spartan Logistics. “Obviously if another opportunity presents itself, we have the capital and the discipline to continue to be opportunistic in the market.”

Spartan Logistics’ investments are another in a series of good news announcements for the once-slumping Fort Smith business community. On Tuesday, P.H. Glatfelter Co. of York, Pennsylvania, announced it would invest $80 million to move into the former Mitsubishi Power Systems building at Chaffee Crossing.

Fort Smith has also had job announcements in the past years from ArcBest Corp. of Fort Smith and the soon-to-open osteopathic medical school at Chaffee Crossing.

“I feel good about where we’ve been and where we’re going,” said Tim Allen, the president and CEO of the Fort Smith Regional Chamber of Commerce. “We have had some nice announcements over the last 24 months. We’re working hard; we’re trying to do things differently now and be more proactive in economic development.”

Shopping Around

The Harmons came to Fort Smith to help out a client, Owens Corning. Owens Corning asked Spartan to find a warehouse, which Spartan would operate for the company, in the Fort Smith region.

Ed Harmon, chairman of Spartan Logistics, said he worked for an ArcBest subsidiary for 20 years, so he was familiar with the area. When he and Steve came to look for a warehouse for Owens Corning, they didn’t find much available.

That might have been frustrating to some businessmen, but Steve Harmon said it told him that Fort Smith had a shortage of good warehouse space. The Harmons said the company looked at the Riverside building before deciding to buy the Whirlpool distribution center.

Soon after, Furniture Factory Outlet announced it would relocate its corporate headquarters to the building. The rest of the building is occupied by a handful of other companies including Owens Corning and Mars Inc.

“I believe that Fort Smith is as suited as Dallas from a logistics location for distribution,” Ed Harmon said. “It has rail, highways and easy access to the major markets, which I don’t think has been developed as much as it could have. The vision that we have — with a lot of help — is that we started with this building, and two months ago we bought the Riverside building. There is a need for good product at a reasonable, acceptable market rate. By doing so, we are very positive about this area.”

Bob Cooper, a principal broker at R.H. Ghan & Cooper Commercial Properties, represented Spartan Logistics in its acquisitions. The former Whirlpool building is now full of tenants on long-term leases.

“We got this building leased out in four, five, six months, which is unheard of,” Cooper said. “You have a building that’s empty and then, all of a sudden, you have filled 600,000 SF.

“We get so many calls to our office asking if Spartan Logistics has any space there. It definitely created a buzz.”

Allen said Spartan Logistics’ investments fall in line with Fort Smith’s strategy of attracting multiple midsize job creators rather than focusing on just one or two large ones. The companies that are using Spartan’s warehouses on Jenny Lind represent a few hundred jobs but give the city’s economy added flexibility.

“Our strategy is to go after several 150 jobbers instead of that golden goose,” Allen said. “That’s our niche in the market. We have all these big boxes, and we kept thinking to fill them with one big customer. We have to start thinking of these big boxes as being multiple companies under one roof.

“I would much rather have multiple companies with 150 jobs. They’re easier and less expensive to recruit to the market. If one of them decides to move out of the market, it’s not devastating.”

City at Crossroads

For his part, Allen refuses to say the word “Whirlpool,” instead using the phrase “W word.” When Whirlpool left Fort Smith, it was a hard, scarring blow to the manufacturing city, but Allen said Fort Smith has recovered.

Allen said he has had meetings with executives at Wal-Mart Stores Inc. of Bentonville to promote the industrial and distribution capabilities of Fort Smith. Fort Smith and northwest Arkansas are considered separate economic regions, but Allen said the reality is that Fort Smith is just a 45-minute interstate drive away.

Allen said Fort Smith has all the assets of a major distribution center for northwest Arkansas’ economic engine. Fort Smith sits at the crossroads of north-south and east-west interstates, three railroads connect to the city, and the Arkansas River flows through.

“We would love to be Memphis or even bigger and better than that, as well,” Allen said. “We have all the right things. We think it’s a great message for [Wal-Mart] to communicate with their global customers.”

Ed and Steve Harmon said the city and the chamber were great partners in Spartan’s decision to invest in Fort Smith. Ed Harmon related a story that Spartan Logistics was interested in building a 350-job bakery in Ohio but the local government wouldn’t support it, so the company moved the development to Indiana instead.

Ed Harmon said the Riverside building is already fully leased; Riverside will remain in half the building while the other half will be filled by a national company that the Harmons can’t officially announce yet.

“The city has a can-do attitude that you have to have in a business relationship,” Ed Harmon said.