BUSINESS MATTERS

Pulp mill for Clark County a long time coming, took a lot of work

If pressed, Eric Hughes, chairman of the Economic Development Corp. of Clark County, could make an educated guess about the information on his business cards.

To be fair, it's the side printed in Chinese that gives him pause.

When Hughes, an Arkadelphia lawyer, took over as chairman of the organization three years ago he was told that new business cards were a must. All of the standard information you'd expect to see is on one side in English, and the other side has, he assumes, the same information in Chinese.

"I'm honestly still not entirely sure what it says, but I know it was something I needed," Hughes said, laughing. "When I started with the alliance, I was told I was getting new business cards. It was important."

That second side was added to Hughes' business cards as part of a nearly five-year effort to attract Shandong Sun Paper Industry Joint Stock Co. to Clark County. Sun Paper announced plans last week to build a $1 billion pulp mill near Arkadelphia. The announcement came during a news conference with Gov. Asa Hutchinson, Arkansas Economic Development Commission Executive Director Mike Preston and others.

Depending on who is laying out the timeline, efforts to draw Sun Paper to the state began as far back as 2011. Hughes began serving as head of the economic development organization's board too late to make a trip with then-Gov. Mike Beebe and a delegation from the state and county.

Still, Hughes was what he describes as "intimately" involved in securing a project that will provide 250 jobs at the plant, plus another 2,000 construction jobs over the nearly three years it will take to build the mill. Hughes was a presence during negotiations with company officials, helping sell them on locating in Gum Springs instead of at other possible sites in Arkansas or Mississippi.

As vital as those negotiations with Sun Paper executives were to securing the plant, Hughes also played a part in selling the proposal to an even more important group: his neighbors.

In 2009, Clark County adopted a half percent sales tax dedicated to economic development. Voters were asked to re-up in 2014. County leaders had Sun Paper in mind but had to be careful what they said publicly about their efforts.

Granted, Sun Paper was a poorly kept secret in timber country. Whispers of a Chinese company looking for a spot to operate in south Arkansas have been public and reported for at least three years.

Still, the tax had to pass for the county to be able to put together its incentive package to secure the plant. Hughes and others were actively promoting the extension by detailing previous economic development success stories.

They could point to a $500,000 investment in infrastructure and other things that enticed Georgia Pacific to expand its plant in Gurdon. Half of the money went for necessary sewer improvements in the town of nearly 2,200 in an effort to secure the $37 million plant expansion from Georgia Pacific.

Smaller scale investments were also touted as Hughes and others pushed the tax extension. With $8,000 the county purchased a piece of equipment for a machine shop that resulted in the addition of one job.

Voters passed the sales tax by 69.8 percent in 2014, paving the way for Sun Paper's recent announcement.

Construction on the pulp mill is scheduled to begin in the first half of 2017. Once proper permitting is secured, it will take 2.5 years to build the plant.

Building the plant -- expected to stretch a half-mile long -- will require 2,000 workers. Each phase of construction will employ about 500 people at any one time, Hughes said.

Incentives offered by the county are staggering. Not only will it pony up $10 million to help with infrastructure costs, county officials agreed to a 65 percent abatement of property taxes over 20 years. That's a total of $92 million the county will give up to secure the Sun Paper plant.

You're reading that correctly. Ninety-two million dollars.

But as the pro-abatement argument goes: "What's 65 percent of zero?" Meaning, if the incentives aren't there, then neither is the plant and the millions in taxes the county will get even in forfeiting a huge chunk of them.

All of the incentives and five years' worth of negotiations and expenses, like the cost of printing up business cards he can only read half of, Hughes says he believes in.

"It's been a long project to work on, and I've got to give credit to people of Clark County," Hughes said. "Unless the people of the county voted for that economic development sales tax, none of this happens. This is the county investing in itself, the people investing in themselves."

If you have a news tip, call Chris Bahn at (479) 365-2972 or email him at cbahn@nwaonline.com

SundayMonday Business on 05/01/2016

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