Wal-Mart helps spawn a modern company town

Northwest Arkansas also is getting other more sophisticated amenities. An elaborate art museum is in the works for Bentonville, and there are plans to bring minor-league baseball to nearby Springdale. A new, mostly privately funded library was recently completed. Golf is plentiful.

Northwest Arkansas Regional Airport, which opened about a decade ago at the urging of the Walton family and others, is expanding quickly to keep up with growing demand. Although there have been no official studies done, airport director Kelly Johnson said she could “very safely say” that at least 50 percent of travelers who pass through the airport are in some way affiliated with Wal-Mart and its vendors.

“It’s hard to imagine us having an interstate highway and an airport of that magnitude without a Wal-Mart. Those things just don’t make sense,” said Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas in Fayetteville, about 25 miles from Bentonville.

There are certainly plenty of other cities that are closely connected to a corporation, such as  Rochester, N.Y. (Eastman Kodak Co.) and Cincinnati (Procter & Gamble). But the Bentonville area is unusual in that it is so rural and so largely dependent on one company. (Although there are two other major corporations headquartered in the region, Tyson Foods Inc. and J.B. Hunt Transport Services Inc., Wal-Mart’s presence is most broadly felt.)

“What makes Bentonville or the northwest Arkansas (area) so unique is to find the largest (retailer) in the world in a city of this size. The other companies are in much bigger cities,” Deck said.

Area not immune to real estate woes
Although growth has been going on for some time now, construction sites still dot many roads, promising new banks, hotels and commercial space.

But the Bentonville area, like many parts of the country, has not been immune to the real estate downturn. Hampered by overbuilding, there’s a hefty vacancy rate for commercial space, and the residential market is sagging. That means it’s a buyer’s market for the next executive who comes to Bentonville looking for a McMansion. A typical listing of $400,000 to  $500,000 features a four-bedroom, four-bathroom house, ranging from 3,000 to 4,000 square feet and including amenities such as a pool, sauna or state-of-the-art kitchen.

The region’s job growth also is down from a peak of adding a whopping 600 jobs a month, although Deck said 350 to 400 jobs are still created monthly. Population growth also remains intense, with the area’s population expected to grow larger than the county that includes Little Rock within two decades.

Deck thinks some speculators overestimated demand for high-end housing in the region, but she doesn’t attribute the real-estate slump to Wal-Mart’s stagnant stock price or other woes. Wal-Mart recently said it would cut back on new store openings as part of a push to improve business at its existing stores.

“Certainly this region is incredibly dependent upon Wal-Mart, but I don’t think that we’re dependent upon Wal-Mart’s quarter-to-quarter financial success,” she said.

Some expect the next wave of growth to come from Wal-Mart’s international suppliers _ the manufacturers in China, India and elsewhere who are also increasingly seeing the benefit of being closer to Wal-Mart’s home office.

Dunn, who is focusing on that business through his firm, Global Supplier Development, said he’s already seeing more restaurants and stores featuring items geared toward international transplants. In another sign of the times, a local church congregation recently asked him if they should consider adding a Chinese minister to the staff.

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