Jack Stack: Street frontage on Sunshine is an asset, but no current retail plans.
SRC Holdings Corp. CEO Jack Stack is known to consider all business deals. The potential for new company property on East Sunshine is not one he’s ready to entertain.
Stack has received a half-dozen unsolicited requests to sell land in front of the former Regal Beloit building since December, when SRC subsidiary Southwest Missouri Investments Inc. purchased the 43-acre parcel listed for $11 million.
“It is a hot, hot property,” Stack said. “Twenty-four hours after we announced formally we were moving into the building, we got our first phone call.”
At the 2401 E. Sunshine St. manufacturing site, 7 acres fronting the high-traffic corridor could be repurposed for retail, but Stack has declined the requests of the unnamed callers – one “burger stand” and an outpatient health center – because he said the company is too busy internally.
Now dubbed the SRC Technologies building, the 325,000-square-foot facility is being prepped for SRC Electrical LLC, SRC Electronics, Global Recovery Corp. and The Great Game of Business. Mechanical, electrical and plumbing engineering work started in early March, according to the five construction permits approved by the city, and Stack said the company has spent half of its $3 million renovation budget for plans expected to wrap in the fall.
“We don’t have any time right now to look at that opportunity,” Stack said of selling or leasing on Sunshine, recognizing the upside to sitting on an investment asset. “We had hoped that would provide space for three- to five-years’ worth of growth, but I was notified Friday, we need to be looking for another building.”
Stack and the employee-owned company could be missing out on a cash cow, according to a couple of local real estate brokers.
Mike Fusek of Sperry Van Ness/Rankin Co. LLC estimates SRC’s Sunshine Street frontage is worth $4 million.
“The Sunshine corridor is definitely a hot retail trade area,” said Fusek, who sold a former Burger King a mile east to Oklahoma City-based W.H. Braum Inc., which is wrapping up construction on its sixth Springfield store.
Within blocks of the new Braum’s restaurant, several retail food projects are underway: a Panera Bread at 2641 E. Sunshine; a Zaxby’s chicken restaurant and Starbucks cafe at 3220 E. Sunshine; a Sonic Drive-In in the 3000 block of east Sunshine Street; and Price Cutter is renovating a 50,000-square-foot former Dillons grocery store at 2843 E. Sunshine.
For the commercial draw, Fusek credited consistently high traffic volumes and the relatively high-income levels of people who frequent that stretch of road.
“Within 3 miles of that intersection at Highway 65 and Sunshine there are 42,000 [people], but they have a high household income of around $60,000 a year,” Fusek said. “Plus, it’s a heavily trafficked thoroughfare for people working around Medical Mile, downtown or at the universities.”
Historic traffic volumes for East Sunshine Street between Glenstone Avenue and Highway 65 are roughly 35,000 vehicles per day, according to city of Springfield data. According to Springfield Business Journal research, Sunshine and Glenstone is the busiest intersection in town with over 64,000 average daily weekday vehicles. In fact, four of the top five busiest intersections run along Sunshine.
“You have to go where people are and have the money, and East Sunshine is it,” Fusek said.
Missouri businessman Stan Kroenke found the former Regal Beloit property attractive enough to go under contract last summer with plans for a retail center on the drawing board. Kroenke and his UTW Realty LLC partners backed out of the deal with an uncertain path for securing development incentives.
Commercial real estate broker Todd Chambers said the recent activity along east Sunshine Street represents a revival along the corridor.
“It’s out with the old and in with the new,” said Chambers, who runs Chambers Real Estate Services LLC. “There has just been a flurry of activity along Sunshine.”
Demand is high because available space is low and can be costly.
“There just aren’t that many opportunities along East Sunshine now for retailers and other types of businesses to locate,” Chambers said.
By Chamber’s estimates, if SRC’s Sunshine frontage was divided into 1-acre or 1.5-acre lots, it could garner $15 per square foot. That’s roughly $4.5 million.
The heavy manufacturing-zoned property has a 2016 taxable appraised value of $8.24 million, according to Greene County assessor records.
About two blocks west of the SRC Technologies building sits another vacant street frontage not currently for sale.
Hy-Vee Inc. has had plans to build a $12.7 million store on the 10.5-acre wooded parcel since securing a zoning change in November 2012. The property has never been cleared. Tina Potthoff, a senior communications manager with West Des Moines, Iowa-based Hy-Vee Inc., said the company still plans to build on the south side of East Sunshine’s 2100 block.
“A definitive construction timeline has yet to be established for our second Springfield store on East Sunshine,” she said by email.
Fusek said Hy-Vee’s engineers could have discovered land issues, such as a sinkhole on the property. “I don’t know enough about that property to understand the challenges with development,” Fusek said, “but it is certainly a valuable location with 11 acres. And there are a number of people who would develop that if they’re not going to.”
