Blytheville spreads its wings after Air Force base closing

Federal Reserve Bank of St. Louis - Regional Economist, Jul 1999 by Greene, Stephen

Blytheville Spreads Its Wings after Air Force Base Closing

For nearly 50 years, residents of Blytheville, Ark., proudly supported the Air Force base in their town. Eaker Air Force Base was home to a group of Strategic Air Command B-52 bombers and more than 3,000 military personnel before closing in 1992. At that time, Blytheville was faced with the same challenge that small towns throughout the United States encounter when their military bases are shuttered: redefining its economic identity.

The efforts of Blytheville and surrounding Mississippi County communities to recover is a three-part story spread over three different areas of this northeast Arkansas region:

West Side-The region is luring new businesses to the former Air Force base, now known as the Arkansas Aeroplex, primanly by touting the com plex's 11,000-foot runway.

East Side-Steel mills and sup porting businesses have sprung up near the Mississippi River over the past 12 years, turning Arkansas into the seventh-largest steel producing state in the nation.1

Downtown-Main Street merchants have enjoyed success, but now must compete with a new Wal-Mart Supercenter.

The Aeroplex Plan

The closing of Eaker Air Force Base was anything but a shock to the community. Rumors had been circulating for years. Even before the official closing, the Blytheville-- Gosnell Regional Airport Authority had approved a strategic re-use plan for the 3,771-acre base. Having a plan in place would later make it easier for the airport authority to receive the land from the federal government. More than 30 public meetings were held during the creation of the re-use plan to encourage the suggestions and recommendations of area residents.

"When a military installation closes in a small town, the assumption is that there is going to be gloom and doom and darkness forever after," says Sam Scruggs, executive director of the Mississippi County Economic Opportunity Commission. "But in many cases, it causes local community residents to begin talking and strategizing about how to be more aggressive to improve the future."

The No. 1 priority that emanated from the plan was the creation of new jobs at the site. Today, 48 businesses and more than 700 employees are located at the Aeroplex, but many of the 200 buildings and 928 housing units still sit vacant. Airport authority marketing attempts to attract companies have included direct mail, trade shows and tours. Companies with aviation needs are a natural fit. One such company is Leading Edge Aviation Services.

With 105 workers, Leading Edge is the largest employer at the Aeroplex. The company strips and repaints commercial airplanes. In 1997, Leading Edge moved its operation from Greenville, Miss., to Blytheville in part because of the Aeroplex's runway-the longest in the state and longer than any runway at Memphis International Airport, one hour south.

"We liked the layout of the base," says PaulVolz, general manager at Leading Edge. "The infrastructure was there, and the lease agreements were very appealing."

Donnie Davidson, facilities manager at the airport authority, says lease rates have been designed to reward businesses that keep growing; for example, companies receive incremental price breaks when they hire additional employees. Besides Leading Edge, companies located at the Aeroplex include: Federal Express' driver training school, the YMCA and Floral Distributors Inc.

Down by the River

A void was left in Mississippi County's economy after the Air Force base closed. In 1987, the military accounted for 15.2 percent of personal earnings, the largest of any industry in the county. At that time, durable goods manufacturing accounted for only 14.5 percent of earnings. In 1997, however, durable goods manufacturing leaped to 34.4 percent of earnings-a dramatic increase that can be explained with one word: steel.

Nucor Corp., the nation's secondlargest steel maker, operates two steel recycling mills along the Mississippi River. Combined, NucorYamato (which produces I-beams and is 49 percent Japanese-owned) and Nucor Steel (which produces sheet steel) employ more than 1,200 people and manufacture 5 million tons of steel annually.

The presence of the two steel mills, as well as the more than 30 steel suppliers and customers in town that support them, has helped to mitigate the effects of the Air Force base closure. Some people around Blytheville use the word luck to describe Nucor's decision to open the Nucor Steel mill at almost the same time the base closing was announced.

"Oh yes, we were lucky," says Steve Bell, president of Farmers Bank. "Before the base closed, we knew Nucor was looking to open a second mill here. Our transportation advantages-with the river, the interstate and the Burlington-Northern rail line right here-made us kind of natural for Nucor to open a second mill. It couldn't have happened at a better time."

Despite the strong manufacturing base in the Blytheville area, recent setbacks have occurred. Two manufacturing companies not related to steel-Magna Tech and Acco-closed their plants in the Blytheville Industrial Park in 1998. Each company employed about 400 workers. Overall, Mississippi County's unemployment rate of 11.1 percent far exceeds the state's 4.4 percent rate.