Student-housing development is nothing new to center city, but one complex soon to add to the St. Louis Street skyline represents the largest project to date among a flurry of apartments taking root over the past six years.
According to Springfield Business Journal research, 17 student-housing developments have been built or are under construction around center city since the $8.5 million Eko Park kicked off the boom in 2009. The estimated value of those projects is over $140 million.
None, however, has been as large as the $40 million Aspen Springfield, which is slated for completion across from Hammons Field, at 1028 St. Louis St., in July 2016.
Representatives of Austin, Texas-based Aspen Heights Construction LLC say investment is low risk as demand in the area is strong. They are not worried about filling the 564-bed apartment complex.
“With the growth of the university, we feel like there is plenty of demand,” said Tony Curp, vice president of development. “Some of the competition even supported us at zoning.”
Craig Edwards, a representative of Springfield student-housing developer Bryan Properties – which recently finished a third phase of the $30 million Bear Village along South Kimbrough Avenue – spoke in favor of Aspen Heights’ plan at a City Council hearing last year. He said the market could support the project.
With over 30,000 college students in Springfield each year, SBJ estimates around 10 percent of the student population, or roughly 3,000 beds, have been added to the student-housing market since 2009.
The most recent Queen City development is near MSU’s main campus, which since 2010 has set a fall enrollment record every year, except one. Last year, the second largest university in the state drew 22,385 students for the fall semester, a 2.7 percent increase compared to the previous year, and a 6.9 percent increase from 2010, according to SBJ archives. Between 2005 and 2010, Springfield campus enrollment was up 9 percent.
Stuart Watkins, a spokesman for Aspen Heights, said the company has been busy building in college towns across the Midwest and mid-South since it launched in 2006. The construction and management company has developed more than 12,000 beds at properties in college towns, such as Stillwater, Okla., Clemson, S.C., Auburn, Ala., and Columbia. Properties range in size from nearly 400 beds to over 1,000, all of which feature the kind of amenities college students on the go might be interested in.
Features coming to Springfield include a pool and spa, a Starbucks coffee machine, a fitness center, a game room, private study rooms and outdoor grills.
Curp said lease rates have yet to be determined but would be near the average market rate of $600 per month with amenities. Aspen Springfield will follow the lease-per-bed model that has characterized the Springfield student-housing boom.
“We feel like it gives our tenants a lot more flexibility to not be tied to their roomates’ situation,” Curp said.
Aspen Heights has developed 24 properties in 11 states, and four more projects already are in the works, he said.
“We go for colleges with good, long-term growth history. Missouri State has had a nice, solid growth pattern over the past several years,” Curp said.
Spencer Fane Britt & Browne LLP attorney Shawn Whitney estimated during the past five years, he has helped eight to 10 developers submit plans to the city and secure property tax abatements on more than 20 apartment projects near Springfield campuses. Beyond student-focused developments Deep Elm or The Jefferson, Whitney has helped pave the way for downtown housing projects such as the $15.7 million Heer’s Luxury Lofts and the $9.7 million Frisco Lofts by working to submit redevelopment plans and proposals for tax abatements, which the city approved. Citywide, over $50 million in estimated tax abatements have been secured for center city projects since 2009, according to SBJ research.
While opponents to the incentives have argued public schools and other taxing districts take a hit with such projects, Whitney and other supporters have said costly redevelopments often wouldn’t occur without them.
Whitney believes the recent development activity is caused by a confluence of factors, including steadily rising enrollment at MSU, pent-up demand for quality student housing and a desire among students to be within walking or biking distance of campus and downtown.
“There was very little development during the recession. But more than that, there’s been very little new student housing that had been developed in Springfield in decades,” Whitney said. “If you recall, it wasn’t that long ago that most students lived in converted single-family residences.
“The quality of housing available to students in Springfield for many years was substandard. The market has changed.”
Morelock-Ross Builders Inc. Project Manager David Ross said the contracting firm, which has worked in recent years for student-housing developers Bryan Properties, C. Arch Bay and Russell Meck, is helping to improve housing stock by demolishing many rundown homes. He estimated its student-housing projects since 2011 have eliminated nearly 20 old houses.
“If three to four houses per development are taken down, sometimes more, the value of those houses may have been $300,000. These developers are putting multimillion-dollar facilities back in their place,” Ross said via email.
And the projects mean jobs.
“I’d estimate that we average 20 to 25 subcontractors and suppliers on each of these projects, all with multiple employees on site for extended periods of time. That amounts to hundreds of people working on these projects,” he said.
General contractors, such as Build LLC, have realized significant growth amid the student-housing boom. The firm, which was honored this year in SBJ’s Dynamic Dozen for its 112 percent three-year revenue growth, generated over $38 million in revenue last year. Since opening in 2008, roughly 75 percent of its local business has come from student-housing projects.
Aspen Heights uses its own general contractor, Aspen Heights Construction, though Missouri-based firms Emery Sapp & Sons Inc. and J.E. Dunn Construction Co. also are working on the project.
Matt E. Miller of Miller Commerce – whose student-housing project list includes the Pad Madison, The Monroe and The Q’Ube – said demand remains strong even with Aspen Springfield entering the market.
“Our downtown BlueBlock Lofts properties have a waiting list and leasing at the MORe Student Living properties are noticeably more robust up to now this leasing season than they have been in previous years,” he said via email.
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