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Wal-Mart project spawning spinoff: $50 million center is largest construction job in the state.

IF YOU BUILD IT, THEY WILL come.

McLane Co. executives may not have considered that paraphrase from the movie "Field of Dreams," but it has happened with their 750,000-SF grocery distribution center in Clarksville.

The facility, estimated at $50 million, easily was the largest construction project in Arkansas last year.

McLane, based in Temple, Texas, is a $4.7 billion subsidiary of Wal-Mart Stores Inc.

With completion of McLane's job still a few weeks away, another $8 million warehouse in nearby Russellville is almost finished.

Zero Mountain Inc. of Fort Smith is completing a 147,000-SF warehouse for cold storage and food distribution. It hopes the warehouse will keep frozen food products for suppliers to Wal-Mart.

The second-largest job begun in 1992 was the $25 million Rohr Inc. jet aircraft engine components plant near Arkadelphia.

Work on that facility, which could employ more than 300, has slowed as Rohr looks for a new chief executive officer.

The largest job begun last year in the central Arkansas area, and the biggest construction project by an Arkansas-based company, was R&G Sloane Co.'s $17.6 million, 416,000-SF complex in Little Rock.

The distribution center, which will handle more than 15,000 items and employ about 300, is the first McLane has built to service Wal-Mart's Supercenter stores.

Supercenters combine a full-line supermarket and discount general merchandise department store under one roof.

McLane is the world's largest distributor of food and non-food products to convenience stores, but this will be the first time it has built a warehouse to distribute food products for stores as large as Wal-Mart's Supercenters. McLane distributes to more than 25,000 convenience stores and food service retailers in the country.

The cost of the McLane center is between $25 million-$50 million, according to estimates made by F.W. Dodge, McGraw-Hill Inc.'s Construction Information Group.

Christi Lucksinger, McLane's corporate communications director, will not disclose the value of the project. But she acknowledges it is at the "high end" of Dodge's estimate.

One insider, however, says the cost is more than $50 million.

Supercenters in eight states will be serviced by the Clarksville facility, the largest of McLane's 15 distribution centers in 12 states.

"Wal-Mart has said they are going to be the largest in the world in groceries by the end of the decade," says Mark Rumsey, whose father founded Zero Mountain at Johnson (Washington County) in 1955. "They've hit every projection so far. So, knock on wood, they are going to continue. I think they will absolutely revolutionize the way grocery stores do business.

"We are looking at going to the Wal-Mart vendors, on the West Coast or the East Coast. Instead of storing on the East Coast and then shipping to Wal-Mart, we would like them to go ahead and bring their products to our freezers. Then, we'll get those products delivered to Wal-Mart for them as a customer service."

Nearby Facility

Zero Mountain's Russellville warehouse is about 20 miles from the McLane distribution center in Clarksville.

Structural Systems Inc. of Fort Smith is the contractor for the Zero Mountain warehouse.

Rumsey says Zero Mountain probably got into the frozen food storage business too early and had several years with little profits.

"The original Zero Mountain warehouse is underground in Johnson," Rumsey says. "It has 250,000 SF of freezer space."

Zero Mountain has been very successful in recent years, however. It stores poultry products for Tyson Foods Inc., ConAgra Inc., Cargill Inc. and Stillwell Frozen Foods.

SSI, which has built plants for Zero Mountain since 1985, also built a $5 million cold storage food distribution warehouse for the company last year in Lowell.

"We've built the two most modern facilities in the country," Rumsey says. "The refrigeration controls are the most modern in the world."

Bill Stewart of Zero Mountain designed the controls, Rumsey says, and has designed refrigeration controls all over the world.

Rohr's 231,000-SF plant at Gum Springs, near Arkadelphia, may not be completed until late next year, says Warren Loupe, construction manager for Butler Construction Co. of Kansas City, Mo.

Mark Bergherr, manager of corporate relations for Rohr in Chula Vista, Calif., says it may be two months before Rohr hires a new CEO.

"We have informed the state that because of the severe cutbacks in the industry, we may not be able to go ahead with the entire effort as planned," Bergherr says.

Del Boyette of the Arkansas Industrial Development Commission says Rohr has told the AIDC that when the firm hires a new CEO, it will re-examine the Arkadelphia plant.

"Hopefully, as far as we're concerned, the new CEO will look positively at completing the facility and employing the people that they had planned on employing," Boyette says.

May Construction Co. of Little Rock is building three structures for R&G Sloane on a 100-acre site at the Little Rock Port Industrial Park.

The first two should be finished this summer and the 350,000-SF plastic pipe manufacturing plant should be completed this fall.

R&G Sloane will move its corporate headquarters from Sun Valley, Calif., when the complex opens.

Jim May, co-owner of May Construction, says the manufacturing plant will be a unique, state-of-the art facility when it opens.

May says all the utilities for the plant will be built inside 8-foot by 8-foot tunnels running beneath the floor of the building. No utility lines will be run from the ceiling.

"We've got cranes overhead, and obviously if you have pipes hanging down from the ceiling, the cranes cannot move about easily," says Jack Lane, purchasing manager for R&G Sloane. "It conceptually is new thought. We have not done anything like this in any other facility. We're confident it's going to work out great for us."

Sloane selected May Construction and Cromwell Truemper Levy Thompson & Woodsmall of Little Rock after taking proposals from three teams of contractors and architects.

May says Sloane recently has shipped several silos to the plant that will be used to store the plastic pellets used in manufacturing the PVC pipe.

Here is how last year's largest construction projects in the state break down by categories.

An average value is used for projects with cost estimates. For example, a project that ranges from $5 million-$10 million is averaged at $7.5 million to determine the totals for each category.

Highway projects ($69.6 million total) -- $16.6 million Crawford County Frog Bayou to Mountainburg U.S. 71 relocation; $12.2 million Jefferson County Bobo Road-state Highway 15 project; $10.7 million Jackson County U.S. 67 project; $8.6 million Crawford County Interstate 40 to Frog Bayou U.S. 71 relocation; $5 million-$10 million Little River County Red River bridge structures; $7.4 million Forrest City state Highway 131 widening; $6.6 million Garland County state Highway 7-state Highway 128 project.

Manufacturing ($65.1 million total) -- $25 million Rohr Industries jet aircraft engine components plant; $15 million Tyson Foods Inc. poultry processing plant; $17.6 million R&G Sloane plastic pipe manufacturing facility; $5 million-$10 million Maverick Tube Corp. plant.

Education ($62.2 million total) -- $24.5 million University of Arkansas at Fayetteville Bud Walton Arena; $11.3 million Arkansas STate University at Jonesboro library expansion; $7.6 million University of Arkansas Chemistry Building renovation; $5 million-$10 million Russellville middle school complex, grade school and junior high school classrooms; $6 million library at Hendrix College in Conway; $5.3 million Springdale auditorium expansion.

Warehouses ($50.5 million total) -- $25 million-$50 million McLane grocery distribution center in Clarksville; $8 million Zero Mountain cold storage food distribution warehouse in Russellville; $5 million Zero Mountain cold storage food distribution warehouse in Lowell.

River projects ($33.1 million total) -- $18.8 million White River Beaver Dam cutoff wall rehabilitation construction; $7.9 million Helena harbor construction; $6.4 million grading and structures on Illinois River.

City and county government projects ($23.2 million total) -- $11 million city of Hot Springs wastewater treatment plant; $6.9 million Sebastian County jail and sheriff's office building; $5.3 million city of Fayetteville water transmission line.

Apartments, office buildings ($19.8 million total) -- $11.2 million Systematics Technology Center building, an expansion of Systematics Information Services Inc. in Little Rock; $8.6 million Lost Springs Apartment Complex in Rogers.

Health care ($12.3 million total) -- $7.3 million University of Arkansas for Medical Sciences Eye Institute building in Little Rock; $5 million Conway Regional Hospital ambulatory center and medical office building.
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No portion of this article can be reproduced without the express written permission from the copyright holder.
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Title Annotation:Wal-Mart Stores Inc.
Author:Smith, David (American novelist)
Publication:Arkansas Business
Date:Mar 29, 1993
Words:1419
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