FEATURE ARTICLE, JUNE 2007

DELIVERING THE GOODS
Developers are moving quickly to fill the growing demand for retail and restaurants in Quincy, Illinois.
Kathy Mulkern

Restaurant patrons in Quincy, Illinois, often have to wait up to 90 minutes for a table, especially on weekends. That’s because, so far, there are a limited number of national restaurant chains in the area, and residents — from the surrounding western Illinois, southeast Iowa, and northeast Missouri towns — are craving more dining options.

For years, this mid-market community, which is situated along the Mississippi River, has been underserved by both restaurants and retailers, according to the Great River Economic Development Foundation.

“The people in our area love this shopping center,” says Jim Mentesti, president of the Great River Economic Development Foundation. “Customers and store managers tell us we need more big-name restaurants and retailers here.”

Prairie Crossing, which is located on 44 acres at the intersection of Interstate 172 and Broadway, features a 28,000-square-foot TJ Maxx, and is actively seeking out restaurant tenants to fill its outparcels.

But now things are changing. ORIX Real Estate Capital Inc., in a joint venture with St. Louis-based Sansone Group, has opened the area’s newest major retail development. Prairie Crossing, a 431,000-square-foot center situated on 44 acres at the intersection of Interstate 172 and Broadway, has signed a number of national retailers that are drawing droves of shoppers.

Anchoring Prairie Crossing are a 102,000-square-foot Lowe’s Home Improvement Warehouse and a 107,000-square-foot Kohl’s department store. TJ Maxx, with 28,000 square feet; MC Sports, with 13,500 square feet; and Old Navy, with 12,000 square feet round out the tenant mix of stores opened to date. Scheduled to open later this summer are a 20,000-square-foot Best Buy and a 6,800-square-foot Shoe Carnival.

The developer’s strategy was to assemble a roster of tenants that would create an exciting shopping experience and meet the area’s demand for the newest fashions and cutting-edge technology at affordable prices. It can be a risky exercise, but being one of the first to bring new retail product into an underserved market can pay off in a big way. The typical preference in retail development is to sit back and let others bring in the first wave of product. If it is met with enthusiasm and revenue is strong, then other developers will enter the market and begin their own projects.

By all accounts, the ORIX/Sansone strategy of entering the market relatively early is paying off for the developer, and is working well both for the community and Prairie Crossing tenants. The latest reported sales figures indicate that tenants are exceeding projections.

Why Quincy?

Quincy is a historic Mississippi River town, where commerce, manufacturing and agriculture thrive together. The city hosts numerous festivals, and is home to the Oakley-Lindsay Center (an $8 million performing arts and convention center), a raceway and fairgrounds, 25 parks, a 270-slip marina and nature trails.

Quincy is the largest city within a 100-mile radius. A number of new mid-range and higher-bracket residential communities are under construction in and around the city. There are also 11 hotels, three motels, and four bed and breakfasts in the city.

 Quincy is the hub of the tri-state region. The population of the trade area has grown to 225,000 within a 50-mile radius and 600,000 within a 75-mile radius. Residents of nearby communities come to Quincy to shop at major stores such as JC Penney, Sears and Bergner’s, in addition to Prairie Crossing.

Like other small and medium-size commercial markets, Quincy is committed to facilitating economic development. There is an emphasis on high-quality development and planned growth to create an inviting community. To that end, Quincy provides a number of development incentives to prospective businesses.

A project’s location is just as important to retailers as receiving local incentives when developing in smaller, emerging markets. Prairie Crossing boasts access to the east/west-running Interstate 72 and is immediately adjacent to the Broadway ramp of the north/south I-172 expressway, which leads to Hannibal 30 minutes south of Quincy and will be extended northeast to Macomb in 2008.

Local Customer Base

Comprising a large part of the customer base for Quincy restaurants and retailers are students, who dine out frequently and shop regularly for affordable apparel, computers and other technology products. They come from the area’s numerous educational facilities, including Quincy University, John Wood Community College, Blessing-Rieman College of Nursing and Southern Illinois University School of Medicine, among other institutions.

Medical professionals, patients and their families also drive much of the retail and restaurant commerce in Quincy. Blessing Hospital, with 340 beds, is the largest medical center within a 100-mile radius. Staffed with nearly 250 physicians and 2,000 skilled employees, the hospital, soon to expand with a new cancer center, provides patients with a full and growing range of medical services. One can never discount the benefit of having a pool of area businesses as potential customer bases in smaller markets.

Shortage of Restaurants

Only a few of the most popular national restaurant chains are currently represented in Quincy. As a result, Applebee’s, Ruby Tuesday, Chili’s and the recently opened T.G.I. Friday’s are usually packed. Other restaurants in the area are locally owned and operated — and of varying popularity — or are fast food, drive-through operations. The area’s residents would eagerly support additional national chains with strong brand recognition and expansive menus that appeal to adults and children alike. The restaurant industry overall is rapidly growing, having recognized the benefits of entering into new markets as soon as commercial real estate expansion begins. Almost any middle market has a need for more restaurants to service its population.

For this reason, Prairie Crossing is primarily targeting restaurants for the center’s five outparcels.

Along with the current tenants and the restaurant outlots, there are retail spaces ranging from 1,500 to 7,500 square feet in a free-standing building on the east side of the center. For this space, the developers are talking to a variety of local, regional and national retailers, including spas, hair and nail salons, ice cream parlors, insurance offices, jewelers and sandwich shops.

Quincy appeals to national chains because careful planning, both by the city and developers, has created a critical mass of complementary retailers. Shoppers from the local community, as well as thousands from outlying areas, increasingly are making Quincy their favorite shopping destination. Their only other options are St. Louis and Springfield, each approximately 2 hours away.

Kathy Mulkern serves as vice president, asset management, for ORIX Real Estate Capital Inc. Chicago-based ORIX and St. Louis-based Sansone Group are nationally recognized developers and owners with experience in providing Class A retail space to many of the country’s pre-eminent tenants.


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