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The Best and Worst of 2010
Best News for Art Lovers
Crystal Bridges Museum of American Art in Bentonville finally announced an opening date: 11/11/11. That will be more than five years after construction began on the museum, expected to bring crowds of tourists to northwest Arkansas to see some of the finest American art anywhere.
Worst Sketch Comedy Debut
There is nothing funny about being fired. Certainly no one was laughing when three reporters and a photographer from KARK-TV, Channel 4, were fired over a newsroom spoof they filmed at their then-workplace, which was subsequently posted to YouTube for the world to see. There’s a good chance nobody was laughing at their handiwork, either. The short spots lampooned the world of small-market TV news and dropped dozens of F-bombs but failed to hit any comic targets.
Best Retail Improvement
It wasn’t that long ago that retail experts were preparing obituaries for Dillard’s Inc. of Little Rock. Near the end of 2008, its stock price had sunk to $2.50 and sales were plummeting. But since then, the stock price has been climbing. Last week, it was trading at $37 a share. And for the first three quarters of Dillard’s current fiscal year, Dillard’s reported a net income of $70 million, up from a net loss of $11 million for the same period last year.
Worst Marketing Decision
Little Rock National Airport Executive Director Ron Mathieu‘s taxpayer-funded $40,000 ad buy for a 7-foot-by-10-foot spot on the football field at Little Rock Christian Academy, the private school his son attends. It didn’t help his case that Mathieu obfuscated when, months before the Arkansas Times broke the story, he was quizzed by airport Commissioner Thomas Schueck about why the ad budget for the airport was $40,000 more than the year before. He mentioned something about pushing the airport’s website. LRCA returned the money and Mathieu apologized and began repaying expenses he charged to airport credit cards.
Best New Martha Stewart
That would be P. Allen Smith, the founder of a growing – literally – media empire. Gardening guru, designer, writer, TV host, Smith has even impressed The New York Times, which in August devoted 2,400 words to the entrepreneur, based in Little Rock and with an estate in Roland.
Worst Public Scolding
Johnny Allison, colorful chairman of Home BancShares Inc. of Conway, didn’t seem to be joking when he realized that no investment banker from Stephens Inc. attended the bank holding company’s annual shareholders’ meeting in April. Representatives from Howe Barnes Hoefer Arnett of Chicago, RBC Capital Markets of New York and Keefe Bruyette & Woods of Richmond, Va., found their way to The Peabody Little Rock, but “I guess it’s too far for Stephens to drive over here,” Allison said, knowing full well that The Peabody is connected by a skywalk to the Stephens Inc. building across the street. “I’ll remember that the next time I talk to them, and they’ll remember it forever.”
Best Educational Development I
Starting in the fall of 2010, Arkansas high school students are required to take a unit of economics in order to receive a diploma.
Best Educational Development II
The Ross Foundation and Southern Bancorp, both of Arkadelphia, announced in November that current seniors and future graduates of Arkadelphia High School who are eligible for Arkansas lottery-funded scholarships will have the balance of their college tuition and fees paid by the new Arkadelphia Promise Scholarship. Last week, Southern Bancorp’s Delta Bridge Project announced a $263,000, three-year matching grant to establish the Great River Promise Scholarship program to help graduates of high schools in Phillips County to attend Phillips Community College of the University of Arkansas.
Worst Educational Development
The average student who graduated from an Arkansas college or university in 2009 owed almost $20,000 in student loans.
Best Student Achievement
University of Arkansas teams mentored by Carol Reeves won nine of 14 national and international business plan competitions they entered in 2010. “Can you imagine – against MIT, Harvard, Stanford, London School of Economics – that MBA students from little ol’ UA have opened a serious can of kick-butt on all of them?” asked UA entrepreneurship instructor Jeff Amerine.
Worst Revisionist History
Under pressure from the federal Office of Thrift Supervision, First Federal Bancshares of Arkansas, the publicly traded holding company for First Federal Bank of Harrison, restated its 2009 results, increasing its net loss for the year to $46.2 million from the $27 million it originally claimed.
Best Safeguard to Property Values
The cachet of Little Rock’s Prospect Terrace neighborhood was juiced up considerably when Cliff Lee saw a 5,700-SF house he just had to have. The residential deal by the left-handed ace (now with the Philadelphia Phillies) weighed in at a whopping $2.85 million. Bet this major-league transaction bumped up the comparable sales data for Prospect Terrace.
Best Retention-Expansion News
Announcement of a $62.5 million, 20-acre office development for Southwest Power Pool Inc. in west Little Rock generated smiles for economic boosters.
The 150,000-SF office building and a 33,000-SF operations center will allow SPP, which oversees an electricity power grid in eight states, to consolidate its Little Rock operations. The project also will house an expanded staff envisioned to include 150 new workers during the next three years.
Worst Economic Development Fizzle
That would be the Polymarin Composites plant that was supposed to bring 630 jobs to central Arkansas, along with another 200 by supplier Wind Water Technology. After the big announcement in late 2008, the Dutch company announced a delay of “three to six months” in late 2009. By mid-year, Polymarin’s local phone number had been disconnected, its parent company no longer listed an American branch on its website and the 300,542-SF industrial space that Polymarin had secured in a former Levi Strauss & Co. distribution center at 15000 Panatela Parkway was back on the market.
Worst Performance by a Bankruptcy Petitioner
Northwest Arkansas real estate developer Brandon Barber took the witness stand in U.S. Bankruptcy Court to explain the inconsistencies in his bankruptcy filings. He couldn’t do it. A bankruptcy judge denied his bankruptcy, which leaves him on the hook for the unsecured portion of his bankruptcy claim – more than $30 million.Worst Government Defeat
The estate of Charles Murphy Jr. battled the IRS – and won. Years after Murphy’s death in 2002, the IRS sent the estate a bill for back taxes for an additional $41.8 million. The estate held its nose and paid the bill, but then sued to get the money back. In the summer, a federal judge ordered the IRS to repay the estate $58.4 million, for the back taxes and interest. The IRS first filed paperwork saying it would appeal the ruling, but then reconsidered and dismissed the appeal.
That occurred when Curt Bradbury, COO of Stephens Inc. of Little Rock, walked onto the trading floor at Crews & Associates, Stephens’ bond house rival, in November and laid a kiss on the cheek of Crews CEO Rush Harding. Harding had made a $100,000 gift to help the Arkansas Arts Center reduce its debt, and he did it in honor of Bradbury and his wife, Chucki.
Worst One-Two Blow
A criminal indictment on five counts of loan fraud and Chapter 7 bankruptcy filing provided a one-two punch in July for Little Rock developer Steve Clary. Subsequent courtroom documents indicated that his personal fortune plummeted from $92 million to nothing in three years. Hammered by failing business ventures outside of real estate, Clary allegedly borrowed money under false pretenses in a vain attempt to stay on his feet.
Best Way to Draw Ex-Employer’s Ire
Officials at Little Rock’s One Bank & Trust weren’t happy to discover that Kelly Harbert allegedly defrauded the bank of at least $277,800. Soon after her dismissal, bank execs were even less happy to learn the former commercial loan officer allegedly would be traveling to Cabo San Lucas for some fun in the sun.
One Bank considered her vacation plans to be in bad form, went after Harbert in court and sought, among other things, to restrict her passport options.
Worst Evidence of a Debilitating Illness
The October sentencing hearing for bank fraudster Dana Washburn of Rogers lasted three hours and was interrupted by about a half-dozen trips to the restroom by the defendant. But extensive evidence of Washburn’s severe urinary incontinence was undermined by her acknowledgement that she had taken three vacations to Mexico this year, international travel that prosecutors only became aware of because it was mentioned in her medical records. U.S. District Judge Leon Holmes was not persuaded that Washburn’s condition was such a hardship that she shouldn’t have to serve time in a federal prison; he sentenced her to 41 months, which will commence in February.
Worst Ending for an Arkansas Company
National Home Centers Inc. made a 38-year run as a family-controlled enterprise before a Chapter 11 bankruptcy sale ended the show. A court-approved $15 million sale of assets to Stock Building Supply Holdings LLC of Raleigh, N.C., took care of the secured creditors and preserved some jobs. “It’s a funeral, I tell you,” said Dwayne Newman, company founder. “The outcome was just awful, to start something and it end like this. I figured I would die, and some National Home Center entity would be around, and it wouldn’t have vanished.”
Best Compliment for an Undergarment
Women are saying of Dillard’s new 3-D Curves Wire bra that “I could sleep in this thing,” according to Bill Dillard III, VP of merchandising at Dillard’s.
Best Effort to Maintain One’s Lifestyle
Mary Anne Shula, who is married to NFL Hall of Fame Coach Don Shula, carried out a legal battle with her former stepson, Warren A. Stephens, the CEO of Stephens Inc., over a $1 million annual alimony payment from the estate of her former husband, Jackson T. “Jack” Stephens. Mary Anne Shula sued the estate in an attempt to have it post a bond to ensure the lifetime annual alimony payments don’t stop. A Pulaski County Circuit Court judge ruled that the estate didn’t have to post the bond.
Best Vote of Confidence
In February, the W.K. Kellogg Foundation of Battle Creek, Mich., announced that it would send $11 million to Southern Bancorp of Arkadelphia to further its mission of revitalizing the Mississippi Delta. But the money didn’t come in the form of a traditional grant. Instead, the foundation made a $5 million equity investment in the rural development bank company itself and deposited an additional $6 million.
Best Way Not to Rewin Clients
John Turbeville counted it a privilege to have worked with the city of Jacksonville Policemen’s Pension & Relief Fund since 1989. But when the Little Rock financial adviser lost the $5.8 million-asset pension fund as a client despite his lobbying efforts, Turbeville decided if you can’t woo ‘em, sue ‘em. Turbeville claimed pension fund officials weren’t responsive to his request for public information and didn’t provide all the public information requested. The pension fund voted against Turbeville, in part, because he wasn’t responsive to questions about his forced exodus from Merrill Lynch or consent orders signed by his former and current employer linked to him and investigations by the Arkansas Securities Department and Arkansas Insurance Department.
Worst Company Promise
In November, Phoenix Renewable Energy of Hot Springs promised it would soon unveil plans for a wood fuel plant in Camden. But the announcement hasn’t appeared. We shouldn’t have been surprised. The groundbreaking for a $110 million plant Phoenix held in August 2009 never got off the ground either. Raising money became more difficult after the company was hit with a cease-and-desist order from the Arkansas Securities Department in May. And the company’s top officers, CEO Sam Anderson and COO Stephen Walker, both have criminal records too.
Best New Place for Care
In July, the University of Arkansas for Medical Sciences opened a $130 million 12-floor expansion of the Winthrop P. Rockefeller Cancer Institute. The stunning glass building adds 330,000-SF to the Cancer Institute and connects to the existing 11-story 200,000-SF Cancer Institute building.
Worst Sisterly Affection
In April, a jury awarded Debra M. Evans of Little Rock and M. Gail Graves of Conway a $1.9 million verdict against their sister, Vicki A. Stephens of North Little Rock, whom they accused of breach of fiduciary duty, fraud and theft as trustee of a family trust. Stephens subsequently filed for Chapter 11 bankruptcy reorganization listing $2.9 million in debt, including the judgment owed to her sisters, and $2.6 million in assets. Worst Delay in Justice
Houston resident Jeffrey Scott Rand, formerly of North Little Rock and Hot Springs, was arraigned in U.S. District Court in Hot Springs on March 10, almost exactly two years after a federal grand jury charged him with five counts of securities fraud and 20 counts of mail fraud. The charges are related to the same misrepresentations to investors and misappropriation of their dollars that were alleged by the Arkansas Securities Department in a cease-and-desist order issued against Rand and his Wave Energy Inc. in December 2006. After Texas legal legend Dick DeGuerin withdrew as his lawyer, a public defender was appointed for Rand in November and his trial was scheduled for July 2011.
Best Second Chance
Investors in Clean Technology International Corp. held their first real shareholders meeting earlier this month after state securities regulators succeeded in forcing Darrell Lainhart of Sherwood to turn over real estate, personal property and more than 300 million shares of CTIC stock. Investors whose money supported a lavish lifestyle for Lainhart and his wife can now try to market CTIC’s technology: a machine that apparently can produce large quantities of carbon nanospheres.
More than eight years after it was completed in an exercise of irrational optimism by the Arkansas Teacher Retirement System, the Victory Building at 1401 W. Capitol Ave. in Little Rock is finally nearing capacity. The Arkansas State Medical Board recently signed a lease for more than 18,000 SF that brings the occupancy rate of the 282,000-SF building to 98 percent. Irwin Partners represented ATRS as leasing agent, and the Arkansas Building Authority represented the ASMB.
Best Place to Be Hungry
Shackleford Crossings is home two three of the 10 top restaurants in Little Rock during the first nine months of 2010. Those eateries would be Copeland’s of New Orleans, which sold more than more than $2.9 million worth of food to rank fifth in the city; Texas Roadhouse, $2.5 million at No. 8; and Cracker Barrel Old Country Store, $2.4 million at No. 9. Oh, and an Arby’s will be joining the menu.
Worst Restitution Prediction
When former Little Rock lawyer Gene Cauley admitted stealing $9.3 million from a client trust fund, he thought he’d be able to come up with the restitution before he was sentenced in November 2009. By the time he was sentenced, however, he had only been able to repay $500,000 and thought it would take at least a year to pay the remaining $8.8 million. A year after his sentencing he had made five more installments totaling $63,400.