SCA Pharmaceutical LLC, a Little Rock-based maker of compound drugs for 600 hospitals across the United States, said that it will add 175 jobs over the next three years under an agreement to take over the former Southwest Airlines reservation center at Bill and Hillary Clinton National Airport/Adams Field.
The agreement calls for the 10-year-old company known as SCA Pharma to expand its presence at the airport in phases after which SCA will have doubled its Little Rock workforce.
SCA will lease the 42,000-square-foot building at 1901 Kellett Road and surrounding land for nearly $400,000 annually and shoulder the costs of improvements, estimated at $600,000 to $750,000, according to airport documents. Clinton National agreed to be responsible for some roof repairs at an estimated cost of $60,000.
The airport will pay for the construction of a 20,000-square-foot building at a cost of no more than $3 million. The work is expected to take eight to nine months.
SCA will then spend an estimated $8 million to $10 million to create a "clean room," an area of a facility that controls the environment for dust, airborne microbes and other possible contaminants.
Under the agreement, the airport will take ownership of the building in 20 years after SCA had amortized its investment.
The company plans to employ 75 people in 2022, said Jay Chesshir, president and chief executive officer of the Little Rock Regional Chamber of Commerce. It will hire an additional 100 people in 2023, he said.
Michael Kidd, the chief financial officer for SCA, said the agreement was the product of a two-year search for a new location. The company's four sites in Little Rock have been at maximum capacity since 2017. SCA also announced last week that it was expanding its facility in Windsor, Conn.
"We really, sincerely wanted to bring these jobs to Little Rock and make sure that it happened," Kidd said.
SCA is the second drug manufacturer to set its sights on the reservation center, which was built by Southwest in 1994 for $10 million. The airline closed it and other reservation centers in 2004, citing a trend in which most airline tickets are purchased online. About 700 people worked at the reservation center at the time its closure was announced.
Cantrell Drug, which had operations in Little Rock, began leasing the property in 2016 with the promise of adding 150 jobs, but it filed for bankruptcy the next year after inspections by the federal Food and Drug Administration forced the company to temporarily suspend manufacturing and shipping of its products.
Arkansas Blue Cross and Blue Shield leased the building for about 10 years. Southwest held a renewal option but declined to execute it and the building became airport property.
After the commission meeting, the Arkansas Economic Development Commission, which is part of the Arkansas Department of Commerce, issued a news release to formally announce SCA's plans, which came a week after the company announced expansion plans at its 3-year-old facility in Connecticut.
"Little Rock has been the foundation that has allowed for our other expansion projects, and this project will bolster that foundation for years to come," said Milton Boyer, the company's president and chief executive officer.
The company was founded in 2010 and said it has experienced significant growth over the past five years, emerging as a leading manufacturer of compounded pharmaceuticals.
"Arkansas is committed to nurturing its homegrown companies from seed stage upward," Gov. Asa Hutchinson said. "We are proud to see the success that SCA Pharma is experiencing and look forward to the products and services being developed here in central Arkansas that will positively impact the lives of people around the country."
The expansion of both sites also will create the need for technical and highly skilled jobs for both areas, according to the commission news release.
"As a national leader in compounded pharmaceutical manufacturing, SCA Pharma is a great fit for this area of the state," said Mike Preston, state commerce secretary and commission executive director. "The company's decision to expand in Arkansas speaks volumes about our state's business climate and our workforce."
Little Rock Mayor Frank Scott attended Tuesday's airport commission meeting.
"Even in these trying and turbulent times of a global pandemic and its uncertainty, Little Rock is continuing to see companies invest and create new jobs for our citizens," Scott said in the release. "We are thrilled and grateful SCA Pharma is joining Little Rock's momentum and creating high-paying jobs that will have a lasting impact on our economy."