HP cat out of bag, officially

Dealmakers now free to comment on four-month negotiation

Published Friday, June 20, 2008

It's official. Technology giant Hewlett-Packard is coming to Conway, and those involved with the closely guarded, four-month courtship between one of the largest information technology companies on the globe and one of Arkansas' fastest-growing cities are now free to comment.

"It was incredible," Brad Lacy, president and CEO of both Conway Development Corp. and the Conway Chamber of Commerce said. "It was a team effort and it was probably the fastest project I've ever worked on. These guys (HP) are incredible with their speed, and we've got to make sure we are as fast and accurate in delivering what we said we would."


What the chamber promises to deliver to HP is a $28 million, 150,000-square-foot building in CDC-owned The Meadows Office and Technology Park, which was built to the standards of the Leadership in Energy and Environmental Design (LEED) Green Building Rating System.

Conway is also dedicating about $5 million to preparing the site and improving or building new roads in and around the technology park. The deal also came with a $10 million incentive from Gov. Mike Beebe's Quick Action Closing Fund.

Also heavily involved in enticing HP to come to Arkansas was the Arkansas Economic Development Commission. AEDC Executive Director Maria Haley said that, with one exception, the deal went perfectly.

"On the second visit they (HP) made a decision that they liked a site for us to focus on in Arkansas, which was the one in Conway," Haley said. "At that point we were just one out of many sites, but they did focus on Conway in Arkansas. Eventually, there were phone calls between the CEO of HP and the governor, lots and lots of conversations, negotiations, answering the questions, responding to them immediately when they ask questions, being able to meet the deadlines when they told us they needed, proving that we have the workforce and introducing them to Dr. Mary Good, who is the head of the College of Engineering and Information Technology at (The University of Arkansas at Little Rock) and meeting (University of Central Arkansas President) Lu Hardin; all of that was part of the courting process, as you call it."


One of the first conversations between HP and the city, Lacy said, was about the park and city design guidelines.

"They wanted to make sure whoever followed them would build a quality structure, that the other people in that park would build to the same standard as their building," he said. "When we were going through the city and seeing the housing stock and colleges, they were very impressed by how the community looked. They were very impressed with downtown and what it's become.

"They had seen enough to know there is some pretty progressive leadership in city government, which seemed to impress them."

To Lacy, the decision to choose Conway over other locations, many of which also met every criteria set out by HP, is a vindication of efforts to promote and improve Conway, both in terms of tangible attractions for business and the less tangible perception of the city.

Council-approved ordinances such as 2006's controversial sign ordinance and 2007's city-wide design standards were not well-received by some residents, Lacy agreed, but both ordinances were effected chiefly to present Conway as a city that values quality of life.

"That is important to people," Lacy said of the city's efforts to project a high-quality image. "It's important to people who are from different places, and those are the people that make decisions like the one that was made today."

Mayor Tab Townsell said at Thursday's press conference announcing the deal that some "didn't understand" CDC's 2001 decision to purchase almost 200 acres of land off Sturgis Road for the technology park either. After the conference, Townsell said, the worth of the technology park and the city's efforts to promote a high quality of life is evident, both to the city and the state.

"Where are the people that HP are going to recruit and employ? Where do they want to live? We think it's the higher-quality environment that speaks of good design standards, a good sign ordinance and quality parks," Townsell said.

In an Arkansas Economic Development Commission press release, Townsell said the city has been "shaping itself, transforming, directly preparing for this day for years. To have those efforts recognized and appreciated by a company like Hewlett-Packard is incredible. Today's announcement is that work realized."

Townsell also credited the courage of the Conway City Council's actions he believes were a factor in HP's decision.


As many details of HP's plans have yet to be worked out, Lacy said, it's too early to gauge the economic impact 1,200 new jobs with starting salaries of more than $40,000, but he has an idea of what could happen to the city.

"My crystal ball would tell me, I hope, that this will be the first of several companies that will do this," he said. "I believe this is true for the state and I think we may see some more in Conway because we have some credibility today that we didn't have yesterday.

"If we do our job right, and HP comes to town and hires 1,200 people, every private developer is going to get something out of it, plus you have to think about, whatever the payroll ends up being, that money working its way through our local economy will fuel more restaurant growth, retail growth, more services, all of that will have a great impact on small business.

"Let's take someone who's existing," he said. "Let's take Acxiom, with a payroll of $100 million: if that payroll left this community, people in Conway would see their house lose value, there would not be the number of goods and services, it would hurt our school system, our health care system, our parks. Adding payroll like HP does indirectly benefit everyone because that money will turn over."

Without the homegrown IT business Acxiom to demonstrate that Conway contains a steady workforce suited to technology jobs, he added, HP may not have been as interested in Conway.

Lacy said CDC paid $1.8 million for the property on which the technology park sits and another $1.2 million for basic infrastructure. The city dedicated about $4 million to infrastructure and the city council voted at a special meeting Thursday morning to dedicate about $5.2 million in additional infrastructure and street improvements.

"Really, for the people of the city of Conway, the public dollars that have been invested in that technology park, had those dollars not been there, we wouldn't have had today's announcement," he said after the press conference, adding that when the HP building is completed and fully staffed, the city should see significant returns on its investment "almost immediately."


The four-month courtship of HP "would have been sort of perfect," Haley said, had one state business magazine not published details of the deal three days prior to the official announcement. By disclosing this information, which had been closely guarded for months, Haley said the publication jeopardized one of the most exciting deals in recent state history.

"I was very stressed with the fact that there were a lot of people who spoke anonymously about this project and that some of the press was very eager to report it before the announcement," Haley said. "I find that extremely irresponsible. This should be a case study of how not to handle a project. It's very disappointing.

"All the people who knew about the project did not comment: Hewlett-Packard had no comment, the Governor had no comment, we had no comment and the CDC had no comment; and that should have been a signal."

(Staff writer Joe Lamb can be reached by e-mail at joe.lamb@thecabin.net or by phone at 505-1238. Send us your news at www.thecabin.net/submit)

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