Originally created 09/22/03

Suppliers' rush to be near Wal-Mart



BENTONVILLE, Ark. -- You could always get cheap scrambled eggs at R&J's diner, where they cost a buck and coffee is 75 cents.

Now, if you want, you don't have to go far to pick up $2.50 cappuccino at The Market at Pinnacle Point, a cafe and gourmet food boutique in nearby Rogers. Or a $60 facial at The Spa Esthetiques.

The spectacular success of Wal-Mart Stores Inc., which is headquartered in Bentonville, helped bring more prosperity to this largely rural corner of Arkansas. Now, an influx of hundreds of the retail company's suppliers is bringing high-level executives who want the same kind of life they had back in Los Angeles, Dallas and other urban centers.

With gated communities featuring homes from $500,000 to more than $1 million, high-rise office buildings and upscale stores cropping up, northwest Arkansas is being transformed into swank suburbia.

It is the nation's No. 1 area for growth, according to the Milken Institute, a Santa Monica, Calif.-based nonprofit independent economic think tank. A year ago, it ranked 23rd.

New arrivals come accustomed to amenities that are sometimes difficult to duplicate.

"My kids were really getting into surfing. Guess you can't surf here," said Bruce Morrison, vice president of retail and business development at Walt Disney Co.'s consumer products division, who moved this summer with his family to the area from Los Angeles.

He said he'll be looking at opportunities for hiking, perhaps in the nearby Ozark Mountains.

Wal-Mart's penny-pinching culture fit the austerity of a landscape long dominated by farms and country roads. Its folksy founder Sam Walton, who drove to work in a red pickup truck.

Walton died in 1992, well before the area's transformation.

"I don't think he would have dreamed of it," said Robert Thornton, a retired Wal-Mart executive who was part of Walton's close circle.

The statistical "metropolitan area" encompassing Benton and Washington Counties, now has a population exceeding 300,000, up from 210,908 in 2000, according to the U.S. Census Bureau. County officials believe the number will swell by 2008 to a little more than 400,000.

Many of those coming in earn a lot more than was typical here. In Benton County, which includes Bentonville and Rogers, 8.9 percent of the 58,242 households had incomes of $100,000 or more in 2000, according to the U.S. Census Bureau. A decade earlier, just 2 percent of the 37,517 households had six-figure incomes.

Two other corporate titans - J.B. Hunt Transport Services Inc., in Lowell, and Tyson Foods Inc., the world's largest meat company, in Springdale - have also helped to feed the area's economy, but as Arkansas Gov. Mike Huckabee told The Associated Press: "Wal-Mart has been the catalyst."

John David Lindsay, principal broker of family run Lindsay & Associates Inc., the largest commercial and residential real estate company in Arkansas, said the demand for houses priced between $300,000 and $550,000 is up 15 percent.

County officials and developers are promoting the southwest part of Rogers, along Interstate 540 - the main artery in Northwest Arkansas - as the most prestigious.

Pinnacle Group, a partnership between trucking magnate J.B. Hunt, and local entrepreneurs Bill Schwyhart and Tim G. Graham, just completed a 100,000-square foot, six-story office tower, which houses the local offices of Kellogg Co. and Johnson & Johnson.

"The biggest challenge is overcoming the image of Arkansas. There's still a perception that it's hillbilly and backwater," said Schwyhart. "We're giving Arkansas its premiere address."

Pinnacle Group is also developing a medical center, two 16-story office towers, the highest in the northwest Arkansas, and a 500,000-square-foot mall that will have a movie theater, a high-end department store, other better-priced shops and restaurants.

National hotelier John Q. Hammonds opened Embassy Suites in May, directly north of the six-story office tower, and is planning a convention center and a 250-room Marriott Hotel on the same plot of land.

Not everyone is thrilled with the changes.

Longtime locals like Tammy Hummel, 40, are happy they don't have to drive too far to get to a mall. But they gripe about commuter traffic and bemoan the loss of rural, simpler living.

"I feel like I'm getting lost in the shuffle," said Hummel, who lives in a farm house in Bentonville's rural outskirts. "I don't like the new skyline and everything seems out of place. Nothing matches."

Hummel runs a small gift catalog business from her home, and says her hopes of renting a store in Bentonville have faded. With rising rents, she said she can't afford it.