Let downtown's leasing game begin

The $20 million mixed-use development is nearing completion, but developer Scott Tillman of Tillman Redevelopment LLC has yet to name a single tenant besides Oregon-based Hollywood Theaters. The movie theater chain – the country’s eighth-largest – has hired Louisiana-based Mapp Construction LLC to oversee the $4.7 million infill project, according to a Springfield building permit.

Tillman nabbed Wilhoit Properties to market College Station’s two main commercial components.

The Theater Plaza Shoppes, which adjoin the 14-screen theater complex, will comprise about 40,000 square feet primarily for restaurants.

Leasing agents also are seeking tenants for another 40,000 square feet on the ground floor of College Station Car Park immediately south of the theater.

In addition to the gargantuan space in College Station, Tillman owns a host of other downtown properties, many of which have been vacant for months, even years. And last month, two of his longtime tenants – Well Fed Head Books and The Wellspring Café & General Store – decided not to renew their leases. Well Fed Head’s lease at 331 S. Campbell Ave. runs through August, and Tillman is soliciting buyers for the building that housed Wellspring – about 5,000 square feet – at 300 W. McDaniel St.

The bookstore has moved to the Fremont Center on East Battlefield Road.

Other downtown landlords looking to shore up commercial space in recent months have had mixed results, although those with property closer to Park Central Square seem to have had the hardest time finding tenants.

Click here for a map of open space in downtown.

Commercial Realtor Bob McCroskey said his efforts to lease 1,460 square feet just west of the square have been hampered by uncertainty about the Heer’s redevelopment project as well as disruptive construction work near College Station. The space at 301 Park Central West became available earlier this spring after Marco’s Pizzeria moved to a prime spot at Walnut Street and South Avenue.

“Everybody wants to open with a bang, and you couldn’t have opened with a bang in the last few months,” said McCroskey, who’s negotiating lease terms for the former pizzeria space with a potential restaurant tenant.

Gauging tenant demand

On the opposite side of the square, McDaniel Building owner Brett Loethen has three street-level storefronts – ranging from 1,300 square feet to 4,500 square feet – available for lease on Park Central East.

The square’s eastern spoke has emerged as a hotspot for restaurants and bars in recent years, but Loethen, who concedes he hasn’t actively marketed the space, said inquiries have been limited.

“That corner spot – I always thought that would be a good restaurant-type facility,” he said of the largest suite. “It just seems like so many people are doing the wait-and-see thing.”

Much of the newer commercial space available downtown, however, is attracting plenty of new tenants.

Wilhoit Plaza, 431 S. Jefferson Ave., is at 94 percent capacity, said Matt Miller Co. co-owner Matt Miller. Despite the recent closing of Ophelia’s Tapas & Wine Bar, Wilhoit Plaza has snagged several new tenants, including Moxie Cinema and Bohdi, which Miller described as a high-end salon and spa. The U.S. Census Bureau and a call center affiliated with a company Miller declined to name also have signed leases.

“We’ve kind of been on fire recently,” he said. “We’ve had Wilhoit for two, three years, and we just had a run on space there in the last six months.”

Only a 5,000-square-foot area on the 100,000-square-foot building’s west end is still available, Miller said, adding that the first-floor space could be subdivided.

Just north of Wilhoit Plaza, a building renovated by developer Craig Wagoner at 323 E. Walnut St. has attracted two retail tenants, said Murney Associates leasing agent Dan Compas. Good Girl Art Gallery, 215 W. Olive, is relocating to the building, formerly Sothern Studio, and Envy women’s clothing store also has signed a lease, Compas said. Another 1,850 square feet on the ground floor is still available.

“We’ve had leases signed before the spaces were ready,” Compas said. “That’s pretty significant.”

Morris Dock, who purchased the former Wheeler’s Furniture building at South Avenue and Walnut Street from owner Dick Bennett earlier this year, also said interest in the 12,000-square-foot first floor has been abundant. He’s negotiating a lease with his preferred tenant but said other options are available, if the deal falls through.

Waiting and watching

While there are still a fair amount of businesses gambling on downtown, Miller said he thinks many more are waiting to see how College Station shakes out.

Will the new movie theater complex attract 500,000 people in its first year as predicted? And which restaurants and shops will be in the mix?

“I would say tenants are probably sitting back and saying, ‘Hey, I’m not going first. I’m going to see this thing open. I want to see feet walking up and down the streets. Then after that, I’m going to step in,’” Miller said.

If all goes as planned, Miller said regional and national chains would likely move in and compete with local businesses for downtown’s existing inventory of leasable space. Much of that inventory belongs to Tillman, who did not respond to Springfield Business Journal’s request for an interview.

Tillman owns the 32,000-square-foot Woolworth building on the square, which has been for sale since he purchased it in late 2005 from Mister Furniture owner Byron Thomas. He also owns the building at 313–315 South Ave., which has been available for lease since Tradewinds Furniture Co. closed late last year.

Miller counts himself among the downtown developers questioning how Tillman can afford to hold onto buildings that aren’t generating steady income from tenants.

“I’m not developing retail and restaurant space right now,” Miller said, noting his bent toward condominiums and his Six23 Condo project on West Walnut. “I think Tillman’s King Kong with that. He’s got that handled. He doesn’t need my help.”

Skip Liebman, a Realtor with CJR Commercial Group who keeps a close eye on downtown real estate, agreed with Miller’s assessment but drew an unlikely comparison.

“I think Battlefield Mall is a great example of what you will probably see in downtown,” he said. “As the mall grew in strength and became the center focus of retail in the city and leases came due on these local tenants, they … couldn’t afford to stay in the mall. … I think you’ll see the strong survive.”[[In-content Ad]]