
Businesses and consumers in Arkansas and the rest of the country spent 2023 in the shadow of rising interest rates, which affected banking, construction, real estate, auto sales and more.
In the second year of the Federal Reserve’s campaign to cool inflation in an economy flush with pandemic relief cash, everything was more expensive. And the breadth of the fallout made the topic an easy choice as the year’s top business story.
Businesses dealt with other adversity, including rising insurance rates and a deadly March tornado that caused major damage in the Little Rock area and in Wynne, killing five people.
Other stories were more hopeful. Companies hit key milestones in building out Arkansas’ promising lithium industry, which is attracting hundreds of millions of dollars in investments.

No.1: High Interest Rates
The trickle-down effect of rising interest rates touched all business sectors as the cost of borrowing money climbed higher during 2023.
In a battle that began in 2022, the Federal Reserve continued pulling the trigger on its main weapon to combat inflation. The nation’s central bank ultimately raised the fed rate to a 22-year high of 5.5%.
That July 26 peak marked the fourth quarter-point increase in 2023. That followed rate bumps in February, March and May and seven interest rate hikes during 2022.
Since July, America’s financial landscape has sported a prime lending rate of 8.5%. The ongoing finance environment has introduced commercial rate shock for businesses faced with loan renewals or shopping for new loans.
Though the pace of rising rates slowed in 2023, consumers and investors alike remained concerned about tapping outside funding sources. That has set in place heightened scrutiny over decisions to build or not to build and to buy or not to buy.
However, some indicators point to the possibility of interest rates not only holding but actually dipping in 2024.
After October’s ascent to 7.79%, 30-year mortgage rates have drifted below 7%. That’s considered a favorable development for a housing market that remains overshadowed by high prices, a legacy of COVID-fueled activity.
Meanwhile, the inflation attack plan remains in force and the order of the day: Make the cost of borrowing money more expensive, which should decrease spending and in turn reduce demand and produce lower prices.

No. 2: Big Players Back Lithium
With two of the nation’s biggest companies pouring hundreds of millions of dollars into the region, southwest Arkansas moved forward this year to become the nation’s capital of lithium production.
Exxon Mobil Corp., the country’s largest energy company, announced plans in November to build its lithium industry in south Arkansas to feed a surging battery market, and Standard Lithium of Vancouver discovered record concentrations of lithium in the region’s underground brine. The company also published feasibility studies for lithium plants near El Dorado and Magnolia.
ExxonMobil paid more than $100 million to Galvanic Energy for mineral leases on 120,000 acres in Columbia and Lafayette counties, and Gov. Sarah Huckabee Sanders said the petroleum giant would be investing hundreds of millions more in the Smackover geological formation. ExxonMobil hopes to be producing lithium there by 2027 and to be a leading global supplier by 2030.
Standard Lithium, which has been refining lithium carbonate at a test plant in El Dorado for years, teamed up with affiliates of Koch Industries, the country’s second-largest privately held company, to perfect a process to directly extract lithium from brine. Koch made a direct $100 million investment in Standard’s efforts, and delved into plant planning. Standard says a planned commercial plant in El Dorado, a partnership with bromine producer Lanxess, could produce 5,000 tons of lithium per year, matching total current U.S. production. A much larger $1.3 billion plant on 118 acres that Standard bought in September in Lafayette County could produce 35,000 tons per year, officials said.
Albemarle of Charlotte, North Carolina, is also looking to add lithium to its longtime bromine operations in Magnolia and elsewhere in south Arkansas. It is the world’s largest lithium producer.
Sanders assessed lithium’s potential this way: “Arkansas is moving at breakneck speed to become the lithium capital of America.”

No. 3: Insurance Skyrockets
In 2023, soaring insurance rates caused headaches for industries ranging from health care to school districts.
Extreme weather and high interest rates created volatility in the insurance industry and were blamed for the high costs of property insurance. Tornadoes, hailstorms and pipe-bursting flash freezes pushed Arkansas’ school property insurance programs into a crisis last fiscal year. In July, Gov. Sarah Huckabee Sanders announced that the state would help school districts cover the rising cost of insurance premiums as schools faced premium increases averaging nearly 130% in the 2023-24 school year. Sanders authorized the state to cover 30% of the cost increase, which will amount to about $11 million.
Insurance rates also became a battleground between health systems and insurance companies.
Baptist Health of Little Rock, the largest health care provider in Arkansas, could be out of UnitedHealthcare’s insurance network starting Jan. 1 if an agreement over reimbursement rates isn’t resolved with the insurance company. Conway Regional Health System initially left UnitedHealthcare’s network on July 1 after tough negotiations over reimbursement rates failed to produce an agreement. But in August, Conway Regional announced it had a new deal with the insurer, based in Minnetonka, Minnesota.
Arkansas also made national headlines during the year over the state’s removal of tens of thousands of people from Medicaid, which provides health care coverage for low-income and disabled patients.
As of October, the Arkansas Department of Human Services had removed more than 427,000 Arkansans from Medicaid since April 1. That was the date when normal eligibility requirements were reinstated after the end of the federal COVID-19 public health emergency, which prohibited states from removing people from Medicaid.
“We do expect a great number of people to lose their coverage, which would impact hospitals, because they’re uninsured when they come into the hospital facility for treatment,” Bo Ryall, president and CEO of the Arkansas Hospital Association, said in March.

No. 4: Tyson Weathers Foul Year
Tyson Foods Inc. of Springdale had a rough fiscal 2023, with the publicly traded meat processor posting a loss of $648 million.
The company lost money in the second, third and fourth quarters, the first nonprofitable quarters for Tyson Foods since 2009. The poor financial results were spearheaded by a disastrous year in the chicken segment, which lost more than $770 million in operating income for the year.
Tyson Foods CEO Donnie King began 2023 by dismissing poultry head David Bray and replacing him with Wes Morris in January. It was only the first of several moves Tyson Foods made to try to stem the losses in the segment.
The company announced it was closing six chicken processing facilities, including plants in Van Buren and North Little Rock, affecting hundreds of workers. It also laid off 250 employees from a plant in North Carolina.
The company also said it would cut its leadership positions by 15% and its corporate positions by 10%. It eliminated hundreds of positions held by employees who did not make the move from Chicago and South Dakota offices as part of its OneTyson initiative, announced in 2022.
In August, Tyson Foods announced it would not renew contracts with integrator farmers whose contracts were expiring in the next two years.
Dozens of farmers in Arkansas will be affected.
“While economic headwinds persist, we are moving in the right direction and managing what we can control,” King said in a fourth-quarter earnings report release.
“The decisions we have taken have made us more operationally efficient,” King said. “The strategy and leadership team we have in place will allow us to take advantage of the long-term opportunities in front of us and drive shareholder value.”

No. 5: Assault on the FOI Act
The assault on the Arkansas Freedom of Information Act, one of the strongest in the country, began during the Legislature’s regular session that began in January.
One bill, by Rep. David Ray, R-Maumelle, would have exempted law enforcement records involving ongoing investigations as well as almost all communications between agency officials and agency attorneys. It also would have required those seeking public records to pay the state to obtain the records. Another bill, by Rep. Mary Bentley, R-Perryville, would have made it easier for public officials to meet in private. Both bills failed in committee after drawing widespread criticism.
However, a bill sponsored by Sen. Kim Hammer, R-Benton, and Rep. Bruce Cozart, R-Hot Springs, that created what was called “a significant gap” in the FOI Act did make it through the Legislature. Act 883 allows school boards to meet behind closed doors in executive session on matters that were previously subject to the act.
Then in June, Attorney General Tim Griffin announced the creation of a bipartisan group intended to review the state’s FOI Act and modernize it, noting the increase in the use of digital records and new communications technologies.
And in September, Gov. Sarah Huckabee Sanders called a special session to lower the state’s top individual income tax rate and to “update” the FOI Act to make government “more efficient.”
Her proposed overhaul of the act drew vehement and bipartisan opposition, causing Sanders to limit the proposal to shielding records about her security detail. That amended measure passed the Legislature.
The attacks on the state’s sunshine law resulted in a campaign to enshrine the act in the Arkansas Constitution, with Arkansas Citizens for Transparency submitting a proposed Arkansas Government Transparency Amendment to Griffin last month for approval.

No. 6: The Sanders Agenda
In her first year as governor, Sarah Huckabee Sanders went big, aiming for no less than a major overhaul of Arkansas’ education system and its venerable Freedom of Information law (see No. 5). One was more successful than the other.
Sanders had teased elements of her ambitious LEARNS Act leading to the 2023 regular legislative session. And her appointment of Jacob Oliva, an education leader for Florida governor and fellow Republican Ron DeSantis, in December 2022 telegraphed some of LEARNS’ key provisions, including restrictions on teaching “gender identity, sexual orientation, and sexual reproduction” before fifth grade.
But the centerpiece of LEARNS is a universal school voucher program that redirects state money to private schools, a process phased in over the next three years. Arkansas’ GOP supermajority approved the law mostly along party lines and quickly; Sanders signed the final, 144-page bill only 16 days after it was released.
Critics said the overhaul will harm Arkansas’ public schools by siphoning taxpayer money from them and directing it mostly toward families already able to send their children to private, charter or home schools. Others said the bill was overstuffed, containing good ideas and bad, and should have been broken up. For example, the bill raised starting teacher pay from $30,000 to $50,000.
Sanders enjoyed other victories, including cuts to the state’s top income tax rate during a special legislative session in September, which continued a series of tax cuts that began under Gov. Asa Hutchinson. Sanders, though, has said she aims to eventually eliminate Arkansas’ income tax.
And she continued to fight the culture wars, signing executive orders to ban what she called “woke” and “anti-women language” — as well as the term “Latinx” — from state government documents.

No. 7: Workforce Challenges
Workforce and labor issues were a top concern for Arkansas business leaders in a wide variety of industries in 2023.
Jake Nabholz, CEO of Nabholz Construction Corp., said in November that if the Conway construction company keeps growing, it won’t have the people to meet the demand. “The industry has to do a better job recruiting people and retaining talent,” he said.
Dr. Bruce Murphy, CEO of Arkansas Heart Hospital, said in October that the Little Rock health system is “constantly looking for qualified workers to join our team. As with all health care providers, our greatest challenge is a talent shortage — from food services to nursing and beyond.”
He wasn’t alone.
A July poll by Arkansas Business of 541 of the state’s chief executives representing a diverse range of industries revealed that their most pressing concerns were the difficulty hiring and retaining workers and rising costs.
Some organizations did their part to improve the workforce. In May, the Little Rock Regional Chamber unveiled its campaign to lure former residents and out-of-state workers with Arkansas connections with $10,000 in cash incentives to move to the city.
In November, the Newport Economic Development Commission held a grand opening for its nearly $4.3 million workforce and technology complex.
Meanwhile, Arkansas’ unemployment rate remained around a record low during the year. In January, the rate in Arkansas was 3.4% and by July it had fallen to 2.6%. The unemployment rate started to creep up in August and was 3.1% in October — still below the U.S. jobless rate of 3.9%, which itself was near historic lows.

No. 8: Tourism and the Buffalo
A redesignation suggestion for the Buffalo National River in northwest Arkansas caused a furor this year.
In October, the Madison County Record in Huntsville reported a survey had been commissioned to measure public sentiment about changing the river’s designation from a National River to a National Park & Preserve. The survey was commissioned by the Runway Group, co-founded by Tom and Steaurt Walton, grandsons of Walmart Inc. founder Sam Walton.
Proponents believe that a change in designation would attract more visitors and result in increased infrastructure funding.
The river’s defenders reacted quickly and vociferously. Their fear was that the redesignation, which could allow state control, would result in overdevelopment of the Buffalo, which is considered a paradise by canoe and kayak enthusiasts. The river, designated as a National River in 1978, starts in Newton County and runs 135 miles eastward to the White River.
The outcry caused proponents to back down from the redesignation drive for the time being.
In other tourism news, Gov. Sarah Huckabee Sanders in January appointed a 17-member Natural State Advisory Council, led by her husband, Bryan, to promote the state’s outdoor recreation industry. He said his goal was to double the $3.5 billion tourism contributes to the state’s economy within the next 10 years.
The council identified four state parks — of which the Buffalo River was not one — in which improved infrastructure could attract more visitors interested in outdoor recreation.
And in June, Mike Mills resigned as secretary of the state’s Department of Parks, Heritage & Tourism after less than six months as agency chief. Mills, founder of the Buffalo Outdoor Center in Ponca, was replaced by Arkansas State Parks Director Shea Lewis.

No. 9: Tornadoes Wreak Havoc
Broadcasting live at about 2:30 p.m. Friday, March 31, from their studios in Little Rock’s Riverdale area, KATV meteorologists Barry Brandt and Todd Yakoubian grew increasingly alarmed as they tracked a possible tornado moving toward Little Rock.
“I am going to tell my wife to take cover now, and Barry’s family, too,” said Yakoubian, who has since left KATV. A weather camera zoomed in on a swirling, black vortex barreling toward west Little Rock.
The National Weather Service rated the twister that ripped through Little Rock, crossed the Arkansas River and continued into North Little Rock, Sherwood and beyond as an EF3, with maximum winds of 165 mph. Dozens were injured. One person died in North Little Rock. Thousands of structures were damaged or destroyed. A tornado this strong had not hit Little Rock since 1999.
A couple of hours later, a separate powerful tornado shattered the town of Wynne, killing four people and demolishing the high school, the First United Methodist Church and several businesses.
Arkansas is still recovering, and the costs are significant. In Wynne, administrators filed a record $122 million claim for the high school — a claim that along with others in 2023 more than doubled the cost of property coverage for the state’s 237 school districts (see No. 3).
In Little Rock, numerous homes are gone. It will cost $14 million to repair the Calais Apartments on Napa Valley Drive. Repairs to The Landings at Rock Creek, a 154-unit apartment complex on Chenal Parkway, are expected to hit $6 million.
By November, the badly damaged Kroger in the Colony West Shopping Center reopened its doors. Restaurants have begun to reopen at nearby Breckenridge Village, which sustained $2 million in damages.
Arkansas Business caught up with Jake Keet minutes after the tornado slammed into his offices in Breckenridge Village. KBK-Breck LLC, an investment group led by the Keet family, recently purchased the complex. “It’s bedlam out here,” Keet said as he walked through shattered glass, collapsed walls and tangled wires. “It is something … you would not believe it.”

No.10: The Buzz Over Bitcoin
Bitcoin mining operations became a political flashpoint in 2023 as Arkansas citizens rallied against them, complaining about noise and excessive power use, even as lawmakers and the governor passed a law preventing local authorities from regulating them.
People in Harrison, Pine Bluff and Vilonia rebuffed plans for cryptocurrency mines, but projects near Greenbrier and DeWitt moved forward despite local opposition.
A federal judge ruled in November that a strengthened noise ordinance in Arkansas County was unenforceable because it ran afoul of a new state law enacted earlier in the year, Act 851. The law limits local authorities from “discriminating” against data centers by setting restrictions.
Several counties and municipalities raced to set limits before Act 851 took effect on Aug. 1. Bitcoin mines often emit high-pitched noises, and sound complaints from nearby residents drew attention in Bono (Faulkner County) and DeWitt. The two data mines are owned by affiliated limited liability companies with ownership stakes traced back to Shanghai.
Chinese ownership has played into the controversy. The DeWitt operation’s manager, Yizheng “Ethan” Wang, is also the agent for the LLC running the Bono mine, and he led the derailed efforts to put facilities in Vilonia and Harrison.
An Arkansas County coffee shop owner, Tammy Hornbeck, said bitcoin center opponents hate the noise and fear the facilities’ potential environmental and security risks.
But lawyers for Jones Digital LLC, which owns the DeWitt Center, said that a hearing by U.S. District Judge Lee P. Rudofsky found no evidence that the mine would pollute the area or affect its significant duck hunting industry.
Hornbeck and others are asking Gov. Sarah Huckabee Sanders and state lawmakers to repeal or modify Act 851. “We’re concerned that we don’t have any way to defend our county,” Hornbeck said. “People are concerned that these businesses are foreign-owned and associated with security threats.”

Runner-up: License Roulette in Pope County
2023 provided no certainty about who will build a $300 million-or-so casino in Pope County. The issue has been up in the air since Arkansans voted to authorize casino gambling with Amendment 100 in 2018.
Two rivals for the state’s fourth casino license — Cherokee Nation Businesses and Gulfside Casino Partnership — have taken the issue in court, each gaining victories and enduring reversals.
In October, the Supreme Court ruled that the Arkansas Racing Commission went beyond its powers in awarding the license to Cherokee Nation Businesses, based in Catoosa, Oklahoma. The justices found that the license was issued to two entities when Amendment 100 called for only one company name on the license.
The commission had first awarded the license to Gulfside Casino Partnership of Mississippi in June 2020, but in October 2021 the high court voided that decision. That led the commission to nullify Gulfside’s permit and award the license to CNB in November 2021.
Gulfside filed suit against the commission and other state entities, and in October, the Supreme Court reversed that licensure.
This month, the Pope County Quorum Court — with the blessing of County Judge Ben Cross — voted 7-6 to support CNB’s bid.
Confused yet? Here’s the bottom line: Both rivals are expected to apply when the state launches a new application period.
“The Racing Commission is waiting for the Supreme Court to rule on the [CNB’s] petition for a rehearing,” state spokesman Scott Hardin said. “The Commission hasn’t discussed a potential time frame for a new application period.”
CNB, which has already bought $35 million worth of land for the project along Interstate 40, wants to build a $225 million facility with 50,000 SF of gaming space and a 200-room hotel.
Gulfside’s plans for a $254 million entertainment destination would include a 500-room hotel and 80,000 SF of gaming space.