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HIGH PROFILE: Commerce Secretary Michael Paul Preston believes state can compete with any other

Arkansas’ commerce secretary believes the state can compete with any other in the economic realm. He’s working on leveraging the Natural State’s resources to prove it. by Dwain Hebda | December 13, 2020 at 8:39 a.m.
Mike Preston on 11/19/2020 at his office for High Profile Cover (Arkansas Democrat-Gazette/Cary Jenkins)

Through the wall of windows that light up his corner office, Arkansas Secretary of Commerce Mike Preston can gaze down on the flat, sparkling ribbon of the Arkansas River. It's a nice perk, seeing the state's main geographic artery every day and an apt metaphor for his mission: Despite stiff competition and the specter of covid-19, when it comes to the state's business and industry, just keep rolling.

"To me, there's not any state that we can't compete against collectively," he says. "Whether we're going against Florida, Texas, Oklahoma or whoever it is, somewhere in our state, we have the ability to stand up and compete with whomever that might be."

Preston grins at his trash talk. There's something slightly ill-fitting about it, coming from the soft-spoken career public servant and capitalist poster child. Preston's immaculately pressed and meticulously organized nature belies a taste for the fight, but a few sentences in, you know it's there.

"Obviously, we have to know our materials and be good on our toes and know who we're selling to and who our audience is. But we can take all of those things and leverage them," he says. "I like to say, 'At some point, all roads lead through Arkansas.'"

Gov. Asa Hutchinson named Preston to his current role last July, a little more than four years after recruiting the wunderkind from Enterprise Florida, that state's primary economic development organization, to head the Arkansas Economic Development Commission.

During his time at AEDC, Preston traveled the world hawking the Natural State's amenities and quality of life from New York to Nanjing, California to Cuba and Petaluma to Paris. The barnstorming yielded 451 projects where companies signed agreements to locate or expand in Arkansas, to the tune of $9.24 billion in investment and a hair under 20,000 new jobs.

Then, over most of 2020, Preston and team embarked on a new and equally urgent commission: Saving Main Street and corporate businesses alike from the dry rot of covid-19 bringing everything to dust.

"[The pandemic] certainly has changed the dynamics significantly, as far as what our focus has been the last nine months versus the previous five years," he says. "When we were at 3.4% unemployment, it was, 'How are we going to get more people into our state? How are we going to find workers to fill those jobs? We've got a pipeline that was bursting at the seams with projects wanting to come in.' We were running guns blazing on this.

"All of a sudden, it falls off the cliff in the middle of the night because of the pandemic and it slows down. Our businesses are starting to hemorrhage, we had to quickly shift from being that proactive, 100-miles-per-hour, economic development power to what's right here in front of us and what we can do to stop the bleeding. How do we help?"

PEANUT SALESMAN

Preston was born with a natural instinct for opportunity. Just ask anyone who bumped into him during his roadside peanut-hawking days near the entrance to Florida's Ichetucknee Springs State Park, between eighth grade and graduating from high school.

"This was before I could drive. [The park] was close enough that I could ride my bike and go set up, mostly in the summer" he says. "It was a small operation, so the owner just said, 'Here, I'll let you do this and make what you can.' I would set up, rent inner tubes and sell boiled peanuts to the people. I always did stuff on the side, too. Someone would come along and want to barter a little bit. 'I got 30 extra watermelons in the back of my truck. I'll give you those extra watermelons for a pound of peanuts.' It was a little bit of a side hustle sometimes.

"That got me into entrepreneurialism. I kept all the books and did all the math and here I am, in middle school and high school, running this. And we did pretty well. We'd bring in $40,000 over the course of the summertime."

The story aptly illustrates Preston's trait of seemingly never knowing when he was outmatched and winning anyway. Not physically imposing, he nonetheless gritted his way to make the basketball and tennis teams in high school. A self-described "decent" student, he landed at the University of Florida, intent on attending law school. In the wake of 9-11, however, he started looking for a greater cause, which he found during sophomore year in college, taking a volunteer opportunity for underdog Larry Cretul's run for the state House of Representatives. It was a move that changed the course of both men's lives.

"I first met Mike in a parking lot at the University of Florida," Cretul says. "He had volunteered with a group of other young men and women to walk precincts for me during the election. You can identify leadership pretty quick. At that particular time, I could see that he had good leadership skills, great people skills.

"He actually helped organize the walking day sheets and all of that stuff. That's a big job. And then, he would organize the teams that would go out and knock on doors, giving them instructions on how to deal with the people who came to the doors. It was a very, I don't want to say contentious election, but among the demographic of our district, conservative Republicans were not very popular. The way Mike took ahold of that assignment, I was pretty impressed. He also kept me focused and on point."

As the first statewide election since the "hanging chad" controversy of the 2000 presidential race, Florida was under the microscope and as luck would have it, Cretul's race would take center stage.

"In 2002, this was the only recount in the state, this one state house race," Preston says. "All eyes fell on this because it was a pick-up seat at the time for Republicans and Governor [Jeb] Bush. They were really excited about it.

"We just worked harder than anybody else in the race and ended up beating a sitting incumbent by 35 votes. I ended up going to work for [Cretul] in his state house office."

From there, Preston lent a hand in a different state senate race, settling in as chief of staff for the winning candidate. By then, many assumed it was just a matter of time before he would take to the campaign trail himself, but Preston was fast developing a taste for economic development work. He arrived at Enterprise Florida bent on revamping the way the public-private entity worked, recalls then-co-worker Rob Sitterly.

"Florida has a different attitude when it comes to economic development," says Sitterly, now president and CEO of the regional economic development group AR/TX Regional Economic Development Inc. (REDI) in Texarkana. "Their attitude when Mike and I first started, especially from elected officials and even the governor, was businesses want to be in Florida. There wasn't a proactive outreach to go out and recruit them."

"Working in tandem, we said, listen, not everybody wants to be in Florida. We have to proactively go out, we have to be relentless when we recruit businesses."

Enterprise Florida soon gained a powerful ally with the election of Gov. Rick Scott (now U.S. senator), whose outlook on actively recruiting companies and creating jobs was music to Preston's ears.

"When Gov. Scott came into office in 2010, it was the height of the '08 recession still impacting Florida. We had 12% unemployment and the state was devastated," Preston says. "He realized that while tourism was important in Florida, retirees are important in Florida, construction was important, you've got to have that fourth leg of the economy and that's economic development and bringing in those long-term, permanent jobs."

The governor's pro-business, pro-growth mantra may have excited Enterprise Florida staffers, but it didn't always sway state legislators. That job was left to Preston.

"Mike's role was understanding how a project worked and then, understanding how it worked on the public side for compliance," says Gray Swoope, secretary of commerce and the head of enterprise for the state of Florida, during Preston's tenure. "That gave him an advantage over anybody because you had those that were out there that were selling and really didn't understand the other side."

"He understood the vision and understood that it took a team to win competitive projects. So, during those years, that organization performed at the highest level of any in its existence. That was not because of people like me, but people like Mike who were helping us bridge the gap between public sector, private sector and working a collaborative-type project. He was really instrumental in that."

SELLING ARKANSAS

Preston's ability to ignore the odds while leveraging opportunity soon started piling up wins, particularly in foreign direct investment and within the health care and medical device industries. Then one day the phone rang and Arkansas was on the other end.

"We were on the beach at Islamorada in the Keys at a friend's wedding and my phone rang. It was a headhunter that I'd worked with before," Preston says. "He said, 'How would you feel about moving to Arkansas and being the top economic development guy for the new governor who just took office?'

"I knew a little bit about Asa Hutchinson at the time, but not a lot. I knew who he was and a little bit about his background. I said I'd be interested in learning more and he said, 'Why don't you update your resume and send it to me.' I did and about a week later, I got a call and did an initial screening. About another week later, I got asked to come to the state to interview for the job. After that, I got the call from the governor asking me to be his new head of economic development. It all happened pretty quickly."

Such hires are often plum thank-you's to campaign loyalists, or at least awarded to natives with a good sense of where the bodies are buried. So, when Hutchinson brought in the outsider -- and a 31-year-old at that --Preston knew what was waiting for him.

"When I came here, there was some skepticism," he says. "I knew going in that there would be challenges and people would think I'm this person from out of town coming in trying to tell them what to do. Early on, I wanted to get buy-in; I knew I wasn't going to come in and say, 'I've got a cookie-cutter approach, and here's what we did in Florida, so it will work in Arkansas.'

"When we talk about rural in Florida, you're still no more than 60 minutes from a port. Rural in Arkansas means something a little bit different. So, I can't come in and say I'm just a hands-down expert on things. I came in and said, 'Here's what did work in Florida. Here's why it worked and here's what we can try to do in Arkansas.'"

At the same time, being the outsider gave him a fresh perspective on the bottlenecks and rivalries that were pinching off economic development and he attacked them accordingly.

"I quickly realized that Arkansas can be broken up into several different states," he says. "The Northwest is so different from Southeast as it's different from Central and the Delta and the Southwest. Really, it's a microcosm of several different states, but that was something that I experienced in Florida. The panhandle of Florida is much different than Southeast Florida and Miami-Dade and Jacksonville and Orlando.

"It's really about bringing everyone together and saying, 'While we're different, there are some common goals that we can work on.' Before, there was always this wall between Little Rock and the rest of the state and what they were doing. I said, 'No, we have to work together. We can be the economic developers for the state and bring prospects in, but the product lies in the local communities.' That was something that I wanted to make sure our community was really passionate about; I wanted them to be passionate about the state as a whole."

Preston also brought a nimbler attitude toward business recruitment and development. Where previous generations measured success by the number of parking spaces in a factory's parking lot, Preston saw the value in proportional victories, resulting in a more diverse mix of companies, yielding job growth in areas that fit.

"To me, economic development is ever-changing and we've done a good job in Arkansas to get ahead of it. It's not always going to be about the sheer number of jobs and the size of the project," he says. "It's so important for a community to know who they are and what they want to be. Do you want that original equipment manufacturer Toyota plant? Or are you better suited to be the one that makes the components that Toyota is then buying? It's not 1,500 jobs, but it's 200 jobs that pay an even higher wage."

As secretary of commerce, Preston's perspective broadened from the now-humming economic development process alone to working on the larger systemic gaps in the state's business community from labor to infrastructure. Helping communities proactively develop more shovel-ready sites, revising the state's tax structure and stem-to-stern accessibility to broadband are, in his opinion, remaining issues that must be answered for the state to fully realize its potential.

But with covid-19, those priorities have taken a back seat to saving current businesses throughout the Natural State. Since March, the Department of Commerce has worked to direct millions to rural hospitals, small businesses and countless employees negatively affected by the pandemic, most of it without a road map to go by.

"These are things that, this time last year, no one would have ever envisioned or ever planned for," he says. "It's really coming in each day: What is the immediate, pressing concern? How are we going to address this day?

"I'm a planner and I like to think about what we're doing next. What's next week look like? Next month? We've literally had to take this day-by-day. That's really changed the style and the approach that we've been able to take."

Atop the list of requisite attributes for a career in economic development is optimism, be it under sunny skies, during down markets or even in the shadow of a pandemic. Preston has it in spades; cheering on existing companies, leading his troops and scanning the horizon, always searching for the side hustle that even covid-19 can offer.

"We're going to get through this. In fact, to me, it presents us an opportunity for the future," he says. "People are starting to realize they don't have to be in California or be on the East Coast; they could be in the heart of the country and they can do everything they can on either coast right here in Arkansas. We're seeing more companies saying they've just had enough of the Northeast and the West Coast and they're talking about Arkansas.

"All I can ask for is an opportunity to go out there and sell our state. If someone wants to sit down and listen to me about Arkansas, I can sell them on it."

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