Benton Mayor Rick Holl-and said he is proud of the City Council’s recent decision to provide financial incentives to an incoming grocery chain building a store here.
The Harps store is being built at the corner of Arkan-sas 5 and Scott-Salem Road.
Holland said there were several factors prompting city officials to consider the incentives it offered to the Harp’s development.
The city is providing $158,273 for street and drainage improvements that facilitate construction of the store, city officials have said.
“The city’s considerations went beyond simply the tax-base increase, but also the attempt to stop, or stem the leakage of, tax monies going to other cities as well as the potential growth in the area where Harp’s is being built,” Holland said.
Losing tax monies to other cities and the potential growth in the store’s locations are the factors that made these incentives “a win-win for the city,” Holland said.
“With the sales projections given by Harp’s, the city will receive about $120,000 in sales tax alone a year from this one development,” he said.
He pointed out that of this $120,00-per-year increase in sales tax collections, around $20,000 will go into the quarter-cent special street fund; another $20,000 will go the parks department; and the majority of the balance will support the police, fire and communications departments.
“Without Harp’s in that location, the majority of the $120,000 would be spent outside of Benton,” Holland said.
Alderman Bill Donnor predicted that the city will recoup even more in the first year of the store’s operation.
“This was a good move on our part,” Donnor said. “This is the kind of thing we need to do to increase our tax base and create more jobs here.”
Holland and other city leaders believe the success of Harp’s will open up additional retail outlets in its proximity and also increase the possibility of additional retail development from that area to Hurricane Estates and Interstate 30.
“This development also will provide additional and needed services to the citizens who reside in the area near the Alcoa Exchange shopping center,” he said.
Holland noted that this is the first incentive package the city has ever offered to an incoming business, but added that “hopefully, it will not be the last.”
“Incentives have become common practice in the economic development of most cities,” he said. “Offering incentives to businesses that are considering locating in Benton will bring growth, tax money and jobs to our city.
“The goal is to grow a tax base in ways that will not put additional tax burdens on our citizens,” he said. “Incentives for retail development are one way we can do that.”
Holland commended the council for its decision.
“We are fortunate to have an economic-minded council, and I am excited to have Harp’s become a part of the city of Benton and its future.”
Not everyone supports the city’s position. A group identifying itself simply as “concerned citizens and business owners” objects to the council’s financial incentives for Harps.
The council’s decision to provide the funds for the street and drainage improvements at the Harps construction site was unanimous.
The “concerned citizens” who have objected to the city’s action are represented by Benton lawyer David McCoy, who has declined to identify his clients.
“I’m not at liberty to do that,” McCoy said when asked for the names of the individuals. “They have hired me as a lawyer ... . I’m their mouthpiece and that’s as much as I can say.”
The Harps chain was founded by Harvard and Floy Harp in 1930, according to the company’s Web site. They started the first store with $500 in cash that Harvard had saved while working in the citrus industry in California. The first store was Harps Cash Grocery and was located in Springdale. During the next 34 years they remodeled, expanded, and moved to bigger buildings as their business continued to grow.
By the early 1950s, Harvard and Floy’s oldest son, Don, had joined them in the business. In 1964 Harps became a small chain when the second store was opened in North Springdale. By the mid-’60s, two other sons, Gerald and Reland, were involved in making the company a success. Don ran the company from the late ‘60s until 1994 when Gerald took over as president. The company purchased Don’s interest in 1995. Roger Collins, the current Chairman and CEO, became the president in 2000. In 2001 the Company’s Employee Stock Ownership Plan purchased all the outstanding stock from the Harp family and management; the company became 100 percent employee-owned. Since 2001 the employees have seen their stock price more than double. Participants in the ESOP were allocated over 10 percent of their pay in stock in their ESOP account for the year-ended August 2004.
With 53 stores in Arkansas, Oklahoma and Missouri, the company has aggressive growth plans. Its strategy has been to differentiate itself from the competition based on quality, service and freshness at competitive prices. The company promotes no solution/no sodium-added fresh beef, pork and chicken. With Green Giant produce, customized cakes, Martha Harp fried chicken, doughnuts and rolls, the Harps’ name signifies quality. Combining that image with employee-owned service, Harps has become one of the grocery industry’s most recognized independent chains and is a national success story for grocery companies competing against large discount grocery chains
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