The Impact of Innovation: JVIC and related projects could boost nearby real estate prices

Real estate experts expect property values near JVIC to jump, and developers are banking on increased demand from JVIC’s estimated 80 to 100 employees for lofts and services near the center, once infill on its second phase is complete early in 2009.

Among the corporate partners already operating in the Phase I space of JVIC are Brewer Science, Crosslink, Nantero and St. John’s Health System. The firms are working with students and faculty from Missouri State University to develop new technologies.

JVIC and Missouri State officials predict demand also will be spurred by residential developments nearby, and Springfield City Council already has taken steps to make sure that land is available to meet the area’s needs, earmarking four acres for future development.

Housing developer Carlson-Gardner Inc. is preparing to work on the former D.M. Oberman Manufacturing building, 600 Boonville Ave. The 57,000-square-foot building, constructed between 1917 and 1925, will hold 38 one- and two-bedroom loft apartments, according to developer Mark Gardner.

He said that while the building itself has a lot of “neat” elements – plentiful windows and intact historic design – it also has the makings of a sound investment.

“We’re not interested in buying any old historic building and preserving it,” Gardner said. “We’re always looking for property that we think not only has the potential to be historically preserved but also turns out to be something that makes a contribution to the community and makes economic sense.”

The company, which is redeveloping the building under the banner of Boonville Lofts LP, will spend about $6 million on renovations.

Gardner is one of several developers who see the area near the Innovation Center as a potential hot spot.

Developers Matt Miller, Matthew Miller and Jeff Schrag are working on their $12 million Brick City retail, residential and office complex on Water Street. That development, which covers a full city block, includes offices, retail space and about 100 lofts.

Urban renewal

The Brick City development already has two significant inhabitants signed on. International importer BridgeBlue Sourcing Partners has purchased nearly 57,000 square feet to house its offices and warehousing space, while MSU has signed a lease agreement for 20,000 square feet to house the school’s Art & Design department.

“That’s part of that neighborhood concept that’s already being developed there,” Matt Miller said, referring to the urban research park idea proposed by the city and the university. “It will basically connect our downtown and our civic center.”

Allen Kunkel, MSU’s assistant vice president for economic development, said the plans for the area include intertwining innovation, design, entrepreneurship and art, creating a community of creativity. North to south, that area generally is Chestnut Expressway to Olive Street; it’s loosely bounded by Campbell Avenue on the west and Jefferson Avenue on the east.

“Having the art (and) design folks down here adds to the attraction to create not only additional residential potentially but also daytime retail, more restaurant opportunities, to meet the needs of the students down here and the JVIC workers,” Kunkel said.

Greg Burris, MSU vice president of administrative and information services, said the Brick City development and the Jordan Valley area are a good match for the art department.

“We think the arts are a great fit for downtown,” Burris said. “As we look at the history of the university’s growth into downtown, we believe we were one of the catalysts of downtown redevelopment early on. We think the area just north of the square is a future growth area, and we’re betting on that.”

So is the city. Springfield City Council approved a resolution April 7 to reserve four acres near JVIC so that JVIC and MSU officials can determine the best use for the land, whether that be commercial or private development. The city purchased that land over several years with the intent of using it as Jordan Valley Park greenspace.

Springfield Economic Development Director Mary Lilly Smith said reserving the property ensures that it’s available for the JVIC-related businesses expected to crop up around the center in the near future.

“Occasionally we do have interest from developers for city-owned property,” Smith said. “Before we get hasty and make that available for other development, we should see if there’s a way to springboard off of JVIC’s success and provide either additional space for offices related to JVIC or maybe some light manufacturing space.”

Adding value

Property values are making developable land scarce in the JVIC area, though Miller said the city is working to improve storm-water issues to help remedy that issue.

Developer Gardner is optimistic that those factors will combine to result in higher property values. He said Carlson-Gardner paid just under $1 million for the Oberman building, which the Greene County Assessor’s Office appraises at just $219,000 as of 2007.

“The value of everything in the immediate area will go up,” Gardner said of JVIC. “The development that has already been done there has added to that area, without question. That in turn encourages us to do this building, which adds to the value of the area, which encourages somebody else to do something, which will add to the area. It builds upon itself.”

While developer Miller declined to disclose the purchase price for the Brick City property, he did say that rent prices in the area have doubled in the last 12 to 24 months, up to as much as $15 per square foot.

Smith said that while the city hasn’t done any official analysis of JVIC’s effect on real estate, “you’ve got to believe that after an investment of the magnitude of JVIC, that has improved property values.”

Phase I JVIC renovations cost $12.4 million; Phases II and III total $5.7 million.

Plaza Realty & Management Services principal Mark Harrell, who also serves on the board of Urban Districts Alliance, said that while most of his realty work is in and around University Plaza and other John Q. Hammons properties, he knows JVIC will have a positive impact on real estate.

“We’ve seen a huge increase in the demand and value of downtown real estate over the years,” Harrell said. “I’d say this development – especially the high quality nature of JVIC – will be a boon for the value of the surrounding area.”

Miller agreed; he said land values have to go up in the area north of the square, based simply on demand.

“You go to where there’s activity and where people and businesses want to be, and with all the new investment in that area, more businesses want to be there,” Miller said. “Development is not rocket science; it’s supply and demand.”[[In-content Ad]]