Magnolia has bloomed in the last couple of years, but local leaders say the south Arkansas city — despite its lack of interstate access — is on the cusp of even greater growth.
Consider:
Southern Arkansas University, expecting the largest freshman class in its history this fall, is opening more dorms and an alumni center.
Two coming elections could net the town about $36 million to build an aquatics/recreation center, sports complex for baseball and softball, a ninth-grade academy and a junior high auditorium that could help accommodate Magnolia’s burgeoning arts scene. City voters will decide on a sales and use tax Oct. 10, and Magnolia Public School District residents will vote on a millage increase Sept. 19.
Magnolia has hired Garver LLC of North Little Rock to produce an economic development study. The $72,000 study is expected to be completed in about a year.
Meanwhile, the downtown square, with vibrant murals all around and a courthouse at its center, had just one empty storefront as of Aug. 18 after losing several businesses in February — mostly to retirements.
The newcomers are Java Primo, The Perfects on the Square, The Perfect Cup Café, The Perfects (all owned by the same woman), Gunter Hill Collections, Bella Magnolia Salon & Spa, Bridget’s Flower Shop and SAU Beyond the Campus (which will sell branded items and host community education classes). The Bella Magnolia will be the square’s first-ever spa.
SAU’s building was donated to the university by the previous owner and an alum, Bobbie Ruth Webb. Another notable square resident, though not new, is the Magnolia Arts Center.
Officials with the Magnolia Economic Development Corp., Magnolia/Columbia County Chamber of Commerce and Triangle Economic Development Corp. all agree that the town’s investments in itself will encourage business owners to make Magnolia home, and consistent messaging plus a regional approach to recruiting them are crucial.
Sales & Use Tax Vote
The aquatics center and sports complex depend on a proposal that has three parts. It asks voters to:
• Refinance the bonds approved in 2007 to construct the city-owned Magnolia Regional Medical Center, which would drop the interest rate on that debt from 4.33 percent to 3.6 percent;
• Add approximately $16 million to the bonded debt to build the indoor aquatics/recreation center and sports complex; and
• Lower the city’s sales and use tax rate from 2.375 percent to 2.2 percent.
Mayor Parnell Vann told Arkansas Business that Magnolia can afford to lower the sales tax because a healthy retail base is generating “more money than we need.” In addition, he said, the aquatics/recreation center and sports complex would bring more people to town for tournaments and family outings, which would mean more tax money and more customers to attract new businesses, like a movie theater or bowling alley. If people see the city investing in itself, they may invest in it, he said.
“The City Council and I see that as a moneymaker for our city, having visitors in our town,” he said.
“I’ll put it this way: We’d love to have a Blossom Festival once a month,” Vann said, referring to the crowds drawn by the annual Magnolia Blossom Festival held in the downtown square each May.
The festival, a weekend of family entertainment that celebrates Magnolia, is named for the blossoms on the Magnolia trees surrounding the courthouse at the center of the square.
“We’d like to have 5,000 to 8,000 visitors once a month in our community because we understand that sales tax is what makes it all go,” Vann said.
A main goal, he said, is to provide activities for SAU students.
Ellie Baker, executive director of the Magnolia/Columbia County Chamber of Commerce, said the city needs these projects to continue to grow rather than flatline.
Some residents would prefer a movie theater, but the mayor said the city can’t build something like that, and it probably wouldn’t survive anyway. “Every person in this county” — 27,000 of them, including SAU students — “would have to commit $20 a week till they die to that theater for it to make it,” Vann said.
For now, residents have to patronize theaters in Texarkana (53 miles away), El Dorado (34 miles) and Springhill, Louisiana (26 miles).
The mayor, however, does see a way for a theater to be viable once the rec center and sports complex are built. “Now, once a month, you [could] have 5,000 to 8,000 visitors in town. Put that on top of your population and the fact that those out-of-towners, they’re going to go to a theater because they get tired of sitting in a hotel. Now the theater works.”
SAU has even offered to lease land for a movie theater, or any quality-of-life amenity, such as a bowling alley.
Baker said people should understand that the bond refinancing proposal and the millage vote are an “all-in-one investment in the community” and will lead to even bigger projects.
Vann added that, ideally, the city would be paying off the hospital bonds for only one additional year in exchange for the aquatics/recreation center and sports complex.
Magnolia still owes $28 million, which is expected to be paid off a few years earlier than its 2037 deadline. If voters pass all the parts of this new proposal, the deadline would be extended to 2044, but the debt could be retired as early as 2038, the mayor said.
Millage Increase
In addition, the Magnolia Public School District is asking its voters to increase their property tax rate by 3.4 mills, to 33 mills. The millage has been unchanged since the 1990s, and Mike Waters, president of the school board and market president for BancorpSouth Bank, said it’s high time for an increase.
Right now, Magnolia’s schools are supported by the seventh-lowest millage among 240 districts in the state, Waters said. Even the proposed rate is lower than that of at least half the districts in Arkansas; the statewide average is 37.1 mills.
Waters says the tax increase would pay for a new ninth-grade academy on the high school campus. Ninth-graders currently attend the junior high school with seventh- and eighth-graders.
The additional tax should also pay for a new 700- or 800-seat auditorium to replace the 60-year-old auditorium at the junior high campus and for needed roof repairs, parking lot improvements and slight modifications at a new elementary school, he said.
Mayor Vann said lowering the city sales tax would help offset the additional school millage.
Growth at SAU
SAU President Trey Berry said the school’s goal is to have 5,000 students by 2020 and he’s confident about getting there. The campus has seen enrollment grow for the last five years; it was at about 4,700 students last fall.
SAU’s greatest challenge in recruitment is quality-of-life amenities — like that movie theater on everyone’s wish list.
Berry said the community is working on that and its relationship with the university is “symbiotic.” He credits SAU’s growth to Magnolia being welcoming and the university having a “culture of caring” and new academic programs.
Its budget this year is about $63 million (24 percent comes from the state). The university launched a five-year, $22 million “Love & Loyalty” capital fundraising campaign in October. It has already raised $8.5 million. Tuition was also increased for the 2017-18 school, by 1.86 percent.
Berry said all that money will help SAU continue to grow.
The university has also increased its offerings, adding engineering, wildlife biology, marine biology, cybersecurity, video game design, entrepreneurship and business programs in the past few years. SAU is planning to launch the region’s first doctoral program in education leadership next year, Berry said.
Thirty-five companies have pitched in too, offering internships to SAU students.
A record 1,900 students are living on campus, and Berry said SAU opened two new dorms on Aug. 20.
In addition, the university opened two new dorms last year and plans to open a new alumni center this year.
David Rankin, president emeritus of SAU and chairman of both the regional Golden Triangle Economic Development Corp. and Magnolia Airport Commission, said SAU “just has a tremendous impact with nearly 400 employees and 4,700 students in a town of about 12,000.”
Small Business Development
One of the newcomers to Magnolia’s downtown square that may be attractive to the college students is JavaPrimo Coffee House, Cafe & More.
Its owner is investing more than $1 million to open the shop and install five apartments on the second floor, according to Cammie Hambrice, executive director of the Magnolia Economic Development Corp. JavaPrimo has locations in Hot Springs and Arkadelphia. The shop in Magnolia, which it expects to open in late November, would be its third location.
Perfects on the Square retail shop just opened. Its owner has five other businesses in Camden. She also bought a second building on the square to open a gift shop/bridal registry business and a third for a cafe, Hambrice said.
“We always refer to the square as our calling card. Because, when you look at other communities the size of Magnolia, a lot of their downtowns are boarded up and ours has never been that way,” she said.
She and Baker, the Chamber of Commerce director, go in person to recruit newcomers, and Hambrice said one advantage for any new business coming to town is that obtaining loans isn’t as difficult as it might be elsewhere. Two local banks she named, Peoples Bank and Farmers Bank & Trust, compete in Magnolia with Bank of the Ozarks of Little Rock and BancorpSouth of Tupelo, Mississippi.
Jennifer Hubbard has operated her women’s clothing shop, Jennifer’s, on the square for 37 years. She said that when any neighbor, even a competitor, goes out of business, it hurts her business because a variety of destinations attracts shoppers. She’s pleased with the influx of new neighbors.
Still, all of the small businesses are challenged by online shopping, which Hubbard is combating by promoting a “shop local” initiative and providing personalized services to shoppers.
Industrial Development
Magnolia hasn’t been as successful in recruiting large industries, though it does have a diverse base that includes a CMC Steel mill, Albemarle Corp.’s chemical plant, furniture maker Southern Aluminum and fuel cell bladder producer Amfuel, to name a few.
Hambrice said the area’s economy is driven by sectors that aren’t doing that well right now, mainly oil, gas and timber. Waters, the BancorpSouth banker, believes all three are on the rebound.
Historically, if one industry is laying people off, another is hiring, Hambrice said, but recruiting larger industries is still difficult because the city can’t be reached by interstate.
It’s about 45 miles from Interstate 30.
If a request for information comes from an industry seeking a site close to an interstate, “I don’t even get to fill it out,” Hambrice said. “So even though I have tax dollars that I could offer for things — or purchase a building or property, that kind of thing — I don’t get that opportunity …”
A quarter-cent of the city’s sales tax is dedicated to economic development. Of that, 80 percent goes to the Magnolia Economic Development Corp., while the balance goes to the city government for matching grants.
Some industries, however, need to be near rail transportation, and Magnolia can accommodate them.
Rail runs down the north and south sides of its 20-year-old, mostly-empty industrial park, which offers 250 acres of shovel-ready land with utilities.
That’s not to suggest nothing has been done with the park, Hambrice said, pointing to a $2.3 million building that houses the SAU Tech Adult Education Center and the local office of the Arkansas Department of Workforce Services.
The building opened there two years ago to develop the workforce that industries need in Magnolia.
But what she; Baker, the chamber of commerce director; and other officials can do ultimately depends on the dollars coming into the city.
“What we’re going to find ourselves asking is what do we want and what are we willing to pay for?” Hambrice said.
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