MIDDLE MARKET HIGHLIGHT, JUNE 2006

Springfield
Karen Stone, CCIM

Strong momentum from commercial development in 2005 is continuing to create jobs and bring investment dollars into the Springfield market in 2006. In October of last year, T-Mobile announced that it will be building a new in-bound call center facility in Airport Plaza, a mixed-use development in the northwest sector of Springfield. “This announcement was very welcome considering the announcement by MCI in late April of this year that it will be closing a call center here,” says Greg Williams, CEO of Springfield Business and Development Corporation. “Although this means we will be losing 400 jobs, the T-Mobile facility, which is scheduled to open this summer, will create approximately 700 jobs.” Springfield-based Carleton Properties is the contractor for the $20 million, 77,000-square-foot call center. In addition, JP Morgan Chase also recently announced that it will open a 1,600-seat in-bound call center in Springfield.

The next big project on the horizon, according to Williams, is the Jordan Valley Innovation Center (JVIC), which is being developed in partnership with Missouri State University on the site of a former feed mill plant in downtown Springfield. “This project is designed to house advanced manufacturing research and development companies. The 100,000-square-foot first phase will be ready for occupancy spring 2007,” Williams notes.

Springfield’s industrial development program has experienced a good amount of activity so far this year. Partnership Industrial Center (PIC), a master-planned, 350-acre industrial park, is now 100 percent built-out, and is occupied by 21 facilities that created $200 million in new investment. Partnership Industrial Center West (PIC West), a 400-acre project located adjacent to the Springfield-Branson Airport, is seeing a good bit of activity, with 5 parcels sold to companies that will bring high-quality manufacturing jobs to the market. In addition, the developer, Springfield Industrial Properties, has developed its first spec building, which totals 75,000 square feet and is currently in final negotiations to be acquired.

Rankin Company, a local real estate company that will soon join Sperry Van Ness as an affiliate, is continuing to develop the 110-acre North Creek Business Park, located on the west side of Interstates 65 and 44 across from the Bass Pro distribution center. “We are focused on marketing to distribution users that are not served by PIC and PIC West,” notes Tom Rankin, managing member of Rankin Company. The 60-acre first phase is 80 percent built-out, and includes a 50,000-square-foot facility occupied by Chicago-based Chem Central and a 60,000-square-foot building owned by Huntsville-based American Tire and Distribution. Prime Source, a building products distributor based in Texas, opened an 80,000-square-foot building in January. Phase II of North Creek Business Park, which Rankin Company is developing in partnership with local investor Charlie O’Reilly, is underway and a yet-to-be-announced 45,000-square-foot user has committed to 4 of the 50 total acres.

Mary Lilly Smith, economic development director for the city of Springfield, expects the strong growth, which has brought more than $300 million in investment dollars into Springfield’s center city since 1997, to continue. Scott Tillman, a local developer, is currently building the College Station Theater at the corner of College Street and Campbell Avenue. The $13 million, 14-screen theater development will also include approximately 50,000 square feet of retail space. Springfield-based Butler, Rosenbury & Partners is the architect for the project, which will open in fall 2007 and will be run by Hollywood Theatres. In connection with the project, the city is building an $8 million, 400-space parking deck.

Matt Miller Co. is redeveloping a 100,000-square-foot building that is located on a full city block bounded by Elm and Pershing streets and Jefferson and Robberson avenues. The renovation will create ground-level restaurants, retail and office space, and second-story lofts.

The medical community, another vital component of the economy of Springfield, is expanding into more of a regional healthcare center. Both of Springfield’s primary healthcare systems, Cox Health System and the St. John’s System, have announced expansion plans that will be ongoing for the next 3 to 5 years and cost in excess of $1 billion. “Our expanded capabilities in medical services are now drawing patients from a 150 mile radius,” Williams notes. “And the healthcare sector, which combined with the education sector, employs more than 32,200 people, has helped Springfield to outpace the job and income growth of St. Louis and Kansas City.”

“We are recognized by the state of Missouri as the economic engine of the state and overall the Springfield economy is very strong,” Rankin says. “The rise in interest rates is not yet slowing down development and we have been experiencing strong, continuous activity in the industrial sector. Activity is still stronger on the acquisitions side than on the leasing side, the fundamentals haven’t tipped the scale yet. And new buyers keep coming into the market because our cap rates are more reasonable here than in other parts of the country.”

©2006 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.