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Arkansas Year In Review: Best & Worst of 2019

11 min read

Worst Ask for a Raise

TV gardener and lifestyle guru P. Allen Smith, not satisfied with the $200,000 he was paid by the state in 2018 to market Arkansas, asked Gov. Asa Hutchinson and sympathetic lawmakers to help him get that raised to $800,000. State Sen. Mark Johnson, R-Little Rock, even worried publicly that Smith might abandon his Moss Mountain Farm in west Pulaski County for a more hospitable state if Arkansas refused to ante up.

But Stacy Hurst, secretary of the Department of Parks, Heritage & Tourism, instead responded with an offer of about $10,000 for work tied to specific “deliverables that can be provided within a year, or earlier.” She called Smith an ambassador for Arkansas, but said “analysis does not indicate an $800,000 vendor agreement” with him would pay off. The $200,000 Smith reaped in 2018 represented nearly 3% of the state’s total $16.9 million tourism marketing “spend,” already too great a proportion, officials said.

Worst Food Nostalgia News

Little Rock restaurateur Mary Beth Ringgold closed Cajun’s Wharf in late spring, citing changing consumer trends and costly upkeep of the 44-year-old restaurant and live music venue on the banks of the Arkansas River.

Best Food Nostalgia News

A revival of the Minute Man Restaurant brand is on the drawing board. The last Minute Man is in El Dorado, but Perry Smith and Linda McGoogan, who operates the El Dorado restaurant, announced that they were working to secure investments so they could open more outlets of the chain, which got its start at 407 Broadway in Little Rock on May 26, 1948, and gained fame for its Radar Deep Dish Pie.

Best $1,000 Profit

In July, USA Truck Inc. of Van Buren reported a measly $1,000 profit for the second quarter of fiscal 2019.

The small sum was actually a feather in the cap for the company. The quarter was beset by all the usual hurdles of trucking, like rising costs in a soft freight market, but USA Truck had to also deal with the Arkansas River flooding after heavy rains this summer.

The company’s headquarters is located along the river and near a levee experts were unsure could handle the rising water.

So CEO James Reed decided to lease an office in Fort Smith for the company’s employees, about 200 out of 400, who lived on that side of the ride. Reed said the chaos cost the company about $600,000 in profits.

“I just wish that everybody could have seen the binding effect that that tough experience had on our people,” Reed said on a conference call. “Was it tough on our result? Unequivocally, absolutely, yes. [W]e’re really proud of what we did coming out of that tough circumstance.”

Worst Fax Case I

A $12.5 million class-action judgment against a New Jersey man and his business stood after the Arkansas Supreme Court decided not to review the case.

Eugene Kalsky, owner of Gen-Kal Pipe & Steel Corp. of Mount Laurel, New Jersey, had asked the state Supreme Court in March to review the case after the Arkansas Court of Appeals upheld the judgment from Pope County Circuit Court. “A crippling $12.5 million judgment has been entered against a small New Jersey business and its president, … as a result of a single fax advertisement sent to” M.S. Wholesale Plumbing Inc. of Russeville, Kalsky’s attorney Tim Cullen of Little Rock said in the petition to the state Supreme Court.

Worst Fax Case II

Financial giant Wells Fargo also was snared in the multimillion-dollar legal strategy of filing class-action suits over unwanted faxes that was honed in Pope County. Wells Fargo’s connection to the suit, however, was tangential — it once held an account belonging to the defendant — and its alleged liability rested on a lawyer’s claim that its response to a garnishment request was legally faulty. It was hit with a $22.4 million judgment, which it has appealed.

Best Historic Circle

Construction of the $350 million Saracen Casino Resort in Pine Bluff marked a tangible return for the Quapaw tribe to its last foothold in Arkansas.

The 300-acre site was part of a million-acre treaty-granted tract for the tribe until it wasn’t in 1824. Pine Bluff’s St. Joseph Cemetery is the final resting place for the casino’s namesake tribal leader.

Worst Memory of Family Ties

The Sears Family apparently forgot they were related when they filled out applications to run medical marijuana dispensaries.

A Little Rock lawyer, Quentin May, filed a complaint with the Arkansas Alcoholic Beverage Control Division after Don, Frankie and Todd Sears of Mayflower were awarded dispensaries in Hot Springs, Pine Bluff and West Memphis.

Don and Frankie are married and Todd is Don’s son. May complained that they had all answered “No” when asked on their applications if they were “in any way” affiliated with any other dispensary or cultivation applicant.

After reviewing the case, the ABC ruled the Searses had not violated Arkansas Medical Marijuana Commission rules but required them to refile corrected applications.

Don Sears’ dispensary, Doctor’s Orders Rx in Hot Springs, was the first to open in the state. It was renamed Suite 443 and later sold to a member of Bold Team cultivation ownership; Frankie Sears sold her dispensary to another Bold Team member. Todd Sears sold his 100% stake in still unopened THC Rx outlet in West Memphis to Bart Christine of BTC Farms in Helena.

Best Downtown Development News

That had to be Cohen-Esrey Development Group’s plans to spend $25 million to rehab the eight-story 103,200-SF Hotel Grim on the Texas side of downtown Texarkana into 93 affordable apartments. Leaders said downtown revitalization hinged on turning the derelict but historic hotel from an eyesore into an attraction. Tom Anderson, managing director of Cohen-Esrey Development, of Overland Park, Kansas, called it the “cornerstone of everything that’s trying to happen in downtown Texarkana.”

Worst Performance Review

Many members of Arkansas Tech University’s faculty didn’t mince words about President Robin Bowen in a campuswide survey in May.

The survey revealed that just 28% of the faculty felt the university in Russellville was headed in the right direction under Bowen’s leadership. Bowen has been president since 2014.

On a scale of 1 (very dissatisfied) to 5 (very satisfied), satisfaction with Bowen averaged a score of 2.66; satisfaction with Bowen’s executive council was 2.37; and satisfaction with transparency was 2.06.

Shortly after the survey was released, Bowen removed Lisa Toms as the dean of the university’s Business School. Several faculty members told Arkansas Business it was a reaction to the negative survey since Toms was an outspoken faculty member in meetings.

Bowen, through a university spokesman, declined to discuss the survey or Toms’ dismissal.

Best News for Peanut Farmers

Delta Peanut LLC of Jonesboro announced this year it was investing $70 million in the peanut industry in the state. The newly formed and farmer-owned cooperative said it was building a $60 million shelling facility on more than 70 acres in Jonesboro’s industrial park and will feature the first peanut-shelling plant in Arkansas. The project is expected to create between 125 and 130 jobs. The multiple buildings at the site will allow farmers to weigh, grade, clean, dry and store peanuts, which will be shelled and shipped by truck or rail to customers.

Delta Peanut also is building a $10 million facility in Marianna to store, clean and dry peanuts before they are delivered to Jonesboro to be shelled.

Worst Audit Finding

An audit found a deficit at the University of Arkansas for Medical Sciences’ Myeloma Institute for Research & Therapy was allowed to grow to $29 million between fiscal 2010 and fiscal 2018. The audit from the University of Arkansas System came with recommendations for stricter accounting controls. Jacob Flournoy, the chief audit executive of the UA System’s Internal Audit Department, said that “allowing the deficit to accumulate over multiple years was considered to be an accounting error.”

Best Stock Mystery

Dillard’s Inc. saw its stock price leap from $64 when the market closed on July 18 to $79.35 on July 19. And that was weird, according to Jen Redding, an analyst for Wedbush Securities Inc., a financial services and investment firm in Los Angeles. “Department stores don’t run 25% in a lot of years, let alone” in a day, Redding said. Some analysts figured short-sellers were responsible for the move.

Worst Nano Vetting

It took four years before behind-the-scenes chaos at NanoMech spilled into public in 2019. Investors unhappy with the domineering, spend-happy, dart-board financial forecasting leadership of CEO Jim Phillips pulled back the shroud of secrecy he stitched around the Springdale firm.

He was forced out in February.

NanoMech was the third tech startup funded with venture capital that Phillips was pushed out of amid criticism of his corporate spending habits and his compensation relative to fiscal performance.

Hyped as “the world leader in surface engineering and material science manufacturing of lubricants” by Phillips, NanoMech sold for $8 million in an August bankruptcy sale. Phillips, who plowed through upwards of $60 million from private backers and state support during his NanoMech tenure, claimed it was a fraction of the company’s true value. Curiously, he was unable to find a white knight to prove him right.

Best Triple D Twist

In days gone by, Triple D was slang for a “dumb doctor deal,” a bad investment that caused wealthy, unsavvy business folk to part with their money.

When we hear Triple D these days, our thoughts meander to Delta Dirt Distillery, the fledgling spirits maker in downtown Helena-West Helena.

Cheers to you, Harvey and Donna Williams. Oh, and lest we forget: their son Thomas, a Moonshine University grad.

Worst Swingset Metaphor

A long-stewing and contentious lawsuit simmers on in Pulaski County District Court: Claims and counterclaims between Little Rock ad agency CJRW and former consultant Gary Heathcott, who sold his firm’s business list to CJRW in 2014.

CJRW ejected Heathcott from its Main Street offices in 2017 and severed his five-year contract, reportedly worth well over $1 million, over what it called consistent harassment and inappropriate sexual remarks to colleagues.

Heathcott is suing for breach of contract, saying CJRW dumped him only after he landed several lucrative state accounts. The agency replied that Heathcott’s behavior with colleagues and clients, always off-color, had become outrageous and intolerable, violating the company’s employee manual.

The most consistent theme in comments cited in CJRW’s January 2019 counterclaim? A metaphorical swing swaying in Heathcott’s mind. Several former co-workers quoted him as saying, after a woman would pass by, some version of this: “I wish I had a swing like that in my backyard.”

No trial date was set as of last week.

Best Answer to Obvious Query

John L. Berrey, chief of the Quapaw Nation, had a snappy answer to what turned out to be an obvious question: What will the tribe’s new Saracen Casino Resort in Pine Bluff mean to minority groups.

“First of all, we are a minority,” said Berrey, business leader of the 5,200-member tribe, based in northeastern Oklahoma. “We are the poster child for what was anticipated from the Indian Gaming Regulatory Act back in the ’80s. We’ve become more self-determined and self-governed, and we’re thriving.”

The tribe expects its $350 million casino/hotel complex to open fully next year, helping to revive jobs and spirits in Jefferson County, which has been bleeding farm and manufacturing jobs for a half-century.

Best Apology

Berry Bishop told U.S. District Judge Susan Hickey that he wanted to be a model of accountability at the November hearing in which she sentenced him to five years in federal prison for bank fraud.

With family members crying in the courtroom, he apologized to his victims, including bankers he considered longtime friends; clients whose trust he betrayed by forging loans in their names and stealing their premiums; employees he let down; and the family he said had been “ripped … to shreds.” He and his defense attorney even dropped their argument that he hadn’t abused a position of trust when he used clients’ personal information to take out fraudulent loans in their names. “I lost it all and deservedly so,” Bishop told the court.

Worst Defense Motion

U.S. District Judge Kristine Baker devoted two days in June to hearing testimony on this question: Did Julie McGee own the computer she gave to the FBI back in 2012 or was it merely loaned to her by her on-again-off-again boyfriend, then-state Sen. Jeremy Hutchinson. If she didn’t own it, then the feds didn’t have the right to search it for evidence used to charge Hutchinson with corruption for spending campaign funds on personal expenses, including the care and feeding of his mistress.

After the hearing, at which McGee testified that her duties for Hutchinson’s campaign consisted of “keeping him sexually satisfied,” Hutchinson didn’t even wait for a ruling. He agreed to plead guilty to charges brought by three U.S. attorneys, including a surprise confession to accepting bribes from a former Fayetteville orthodontist, Dr. Ben Burris. (Burris has pleaded not guilty and is set for trial in October.)

Best New Living Room

Construction began this year on the expanded, renovated Arkansas Arts Center, an almost $100 million project designed by Jeanne Gang, a MacArthur “Genius” and Chicago architect. Gang says she wants the Arts Center, in Little Rock’s MacArthur Park, to become a “cultural living room” for the state’s citizens and visitors.

Worst Financial Statement

As their divorce progressed, the lawyer representing prominent class-action attorney John Goodson of Texarkana told the lawyer representing his wife, Arkansas Supreme Court Justice Courtney Hudson, that Goodson had no income.

At a meeting in Lisa Ballard’s North Little Rock office, Matt Keil, Goodson’ law partner and lawyer, “provided roughly 100 pages of deeds, mortgages, portions of tax returns, self-prepared spreadsheets, but no evidence of accounts or assets, and Mr. Keil represented that the law firm, Keil & Goodson, was failing and had little to no income,” Ballard wrote in a May 10 letter to Judge David Laser of Jonesboro. “In a word, Mr. Keil stated that Mr. Goodson was ‘broke.’” Goodson’s affidavit of financial means also listed Goodson’s income as $0, Ballard told the judge. The two reached a settlement in August.

Best Collegiate Debt News

2019 marked a jubilee year of sorts for two historically black colleges in Little Rock.

The capital improvement debt of Arkansas Baptist ($30 million) and Philander Smith ($14 million) wasn’t forgiven by Uncle Sam, but the private colleges did start the year with deferments.

The three-year breather from principal and interest payments on loans through the U.S. Department of Education’s HBCU Capital Financing Program was especially welcome for Arkansas Baptist.

The 135-year-old school continues working to right its financial ship after the brief and cataclysmic tenure of its former president, Joseph Jones.

Worst Way to Lose a Lawsuit

After a Pulaski County circuit judge ruled that Rivendell Behavioral Health Services of Arkansas intentionally destroyed key evidence, it was an easy victory for the family of a 20-year-old woman who died of a drug overdose.

The judge’s finding meant that the estate of Joely Clements, who died in the apartment of a male nurse who had treated her at Rivendell days earlier, didn’t have to prove liability against the 80-bed acute psychiatric hospital in Benton and its management company, UHS of Delaware Inc. The estate only had to put on evidence of the damage it has suffered because of the defendants’ actions. But the family reached a settlement before that phase of the trial.

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