Pioneering Projects in Arkansas
By Mark Fogarty
5 min read
Big Emma and Little Emma Spark Downtown Development in Springdale
Many affordable and workforce housing projects have bucolic names referring to picturesque surroundings, like the Stone Mill or Smith Ranch Apartments. Or they reflect lofty hopes for future resident success, like The Aspire. But there’s something distinctive about a project named Big Emma, designed as a pioneer to make a big change in a core city neighborhood in Springdale, AR, and expand the reach of an earlier sister project.
The sister project’s name? Little Emma, of course.
It turns out there is no actual Emma these projects honor, really. They take their names from their location on Emma Street. One (Little Emma, with 26 units) has already been built. The other will break ground this fall. And Big Emma, with 77 apartments planned, will “absolutely” have a positive impact on downtown Springdale, a city of 80,000 in the Ozark Mountains, according to one of the development’s investors, Groundwork.
Is Big Emma replicable? Meredith Bergstrom, senior program officer of the Walton Family Foundation, which has extended a $6.75 million grant on the project, thinks so.
“Multiple parties are coming together to make this happen,” she notes of the public-private partnership. “That type of cooperation makes it a replicable project throughout the region.”
“It is a different model than we’ve used before,” says Ken Hall, an owner of Shiloh Capital, an Opportunity Zone (OZ) partner in the Emma developments. “And we hope to use that model in the future on other projects.”
Robert Burns, Walton Family Foundation home region program director, agrees. “Permanently affordable housing is crucial to providing homes for teachers, nurses and other workers we all depend on. Big Emma will be a model for the region.”
Duke McLarty, executive director of Groundwork, a division of the Northwest Arkansas Council, which received the $6.75 million grant from Walton and has made a low-cost loan to the developer in a similar amount, says 30 of the 77 units have been reserved for workforce housing for the northwest corner of Arkansas, which has three huge Fortune 500 employers, including Walmart, trucking company J.B. Hunt and Tyson Foods. The rest will be market-rate, along with a “possibility” of some project-based voucher units.
Groundwork’s investment means the 30 units will be workforce (up to 80 percent of area median income) in perpetuity. These units will be managed by Community Development Northwest Arkansas.
The total development cost of Big Emma will be about $18 million, says McLarty, which will include some traditional bank debt.
Residents may include workers at Fortune 500 firms and manufacturing firms in the area, as well as the usual workforce cohorts of teachers, hospital workers, police and firefighters.
“It was a no-brainer for our first investment,” he says. “We’ve set a good tone for the type of projects we’ll look at going forward.”
Opportunity Zone Tax Breaks
Downtown Springdale has been designated an Opportunity Zone and that is helping attract investment, McLarty says. (OZs are a Trump administration program designed to capture capital gains after a hold period of ten years.)
“If you invest in an OZ,” McLarty says, “you can recoup your money along with the appreciation, tax-free. It will get money off the sidelines and put it to work.”
“Northwest Arkansas’ rapid growth has caused housing to become increasingly inaccessible for the region’s workers and their families,” says McLarty.
“While growth is great news for the economy, more must be done to ensure there are adequate housing options for the workers that make up the fabric of the community. Groundwork’s first investment in downtown Springdale will provide more affordable housing options near core city centers.”
Designed by BiLd Architects, the mixed-use development will include a ground-floor coffee shop. The unit mix is 57 one-bedroom units and 20 two-bedroom. Construction should take about 14 months after the anticipated September 2023 start.
Groundwork explained the partnership structure of Big Emma this way: “The project will be managed by Community Development Northwest Arkansas to ensure perpetual affordability and to maintain tenant income compliance on the workforce units. The project was originally commissioned by Shiloh Capital, an investment fund owned by Springdale natives Ken Hall, Don Harris and Tom Lundstrum. The group also developed “Little Emma” less than a block away.”
McLarty says there has been one other housing development in the area in recent years, a private market-rate development called 202 Railside.
“There’s been considerable investment on the city’s part,” McLarty says of the public-private aspect, and Big Emma will add a positive effect to a downtown that features restaurants and cafes.
He points to Luther George Park, adjacent to Big Emma, which has had “a complete revamp.” Other recreational opportunities nearby include the Razorback Regional Greenway and The Jones Center.
The Northwest Is Booming
The whole Northwest Arkansas area is seeing a lot of development, with an airport built on the west side of I-49, road and infrastructure improvements to the highway and other projects.
The region has four principal cities: Bentonville, Fayetteville, Rogers and Springdale. Three of the four downtowns have been designated as OZs, McLarty says.
Groundwork dates back a year and a half, McLarty says, and used to be called the Northwest Arkansas Council workforce housing center.
The Northwest Arkansas Council dates to the 1990s and was the creation of three Fortune 500 entrepreneurs: Sam Walton, Don Tyson and J.B. Hunt (plus other area business leaders).
The three companies were looking for a regional group concerned with the long-term development of the area.
The Northwest Arkansas Council also focuses on talent recruitment but listened when its members said effective recruitment requires high-quality attainable housing for its workforce.
McLarty says Groundwork focuses now on three things: housing, for which Big Emma is the first deal, working with the four cities on policy changes and direct investments.
Direct investments are the near-term priority, he says, and policy changes are the long-term goal.
