$50M complex filling downtown vacancy

A California-based developer is planning a $50 million housing complex in downtown Springfield, and project officials are targeting a groundbreaking next month.

College Town International LLC, a Los Angeles-based development company, is building a five-story, 194-unit complex at the site of the former Arbor motel on St. Louis Street. A mostly vacant lot for over a decade, the property is adjacent to The Old Glass Place and across the street from the Discovery Center of Springfield Inc.

Dan Weinstein, managing partner of College Town International, said the roughly 225,000-square-foot complex would offer layout options from studios to four-bedroom apartments. Weinstein said he’s been working on plans for the past nine months, and the company’s goal is to begin preleasing the fully furnished apartments in spring 2021. The development will be geared toward students and young professionals, he said.

“We are generally attracted to projects in areas that are seeking new redevelopment,” Weinstein said. “As downtown becomes revitalized, we think this would be a nice option for students and young people that may want to live downtown or close to work.”

Kansas City-based Hollis and Miller Architects Inc. is the primary architect, with local support from H Design Group LLC.

Rob Haik, principal architect for H Design Group, said building amenities include a fitness area, community kitchen, study area, pool, and indoor and outdoor lounges. He said a coffee shop is slated on the first floor. The five-story complex also is designed with an underground parking garage for roughly 170 spaces, he said.

“The interiors to this project and what they’ll offer is at a whole different level than what Springfield is accustomed to,” Haik said.

Development incentives
Weinstein said the lot at 505 St. Louis St. was appealing because it was in a qualified federal opportunity zone. The site is where the former Arbor motel was demolished in 2007 and early 2008, according to past Springfield Business Journal reporting. Weinstein said the site purchase – facilitated through LW MSU LLC and comprising four parcels and 1.79 acres, according to Greene County assessor records – was nearly $4 million.

Qualified opportunity zones, established by the 2017 Tax Cuts and Jobs Act, are designed to create economic development in distressed communities by providing tax benefits to investors, according to the city of Springfield website. Investors receive capital-gains tax deferrals and reductions for long-term investments, as well as other incentives.

“Without the opportunity zone, it would be a very difficult project to pencil – certainly not at this scale,” Weinstein said.  

The apartment complex, which is expected to cover nearly half a block, also will occupy space where a pair of nearly century-old vacant downtown buildings were demolished in 2014. The roofs of the structures had collapsed, creating a public safety hazard, according to past SBJ reporting.

Project officials also are seeking Springfield Land Clearance for Redevelopment Authority approval. Matt Schaefer, senior planner with the city of Springfield, said an application for tax abatement under Chapter 353 was submitted in mid-July. Schaefer said the LCRA committee will review the application in October, and if approved, it will go to a public hearing with City Council in late October. He said the process takes about 70 days.

If approved, the property owner would receive up to 25 years of partial real property tax abatement. Weinstein declined to disclose how much he was seeking in abatements.

“We feel we’re making a significant commitment on our end, so we’d like to see the same thing from the city,” Weinstein said. “For us to execute the design we have in mind, we’d have to get more support.”

College Town International is working with potential lenders on financing, Weinstein said. The company also is developing six similar housing projects, mostly in opportunity zones, in Southern California and Texas.

For the Springfield project, Crossland Construction Co. Inc. was hired as general contractor, Haik said. Engineers on board are Olsson Inc., civil; Hollis and Miller Architects, structural; and Kansas City-based Henderson Engineers Inc., mechanical, electrical and plumbing.

Downtown housing
Rusty Worley, executive director of the Downtown Springfield Association, said the St. Louis Street and Benton Avenue corner has been blighted for over a decade.

“We’re excited to see some significant development happening in that block,” Worley said. “We wanted to continue to have more development to improve that St. Louis Street corridor to better link the convention center with downtown.”

Weinstein isn’t the first developer to invest in downtown housing. 

The Vecino Group LLC has opened five apartment complexes in the last five years within four blocks along Jefferson Avenue totaling over 300 units. 

Tim Roth, president of student housing for The Vecino Group, said he welcomes any new development downtown. However, he’s concerned the planned housing complex may siphon renters from other complexes.

“It does take a lot of effort every year to get leased, so adding more product into the market will continue to make that a task that has to be dealt with,” Roth said.

Roughly 350 beds just entered the downtown market, with the recent opening of the $23 million Vue on Walnut, just down Jefferson at the Walnut Street intersection. That large project comes on the heels of a 10-year development boom centered on student housing in Springfield. Nearly $185 million had been spent on new student housing across the city between 2009 and 2018, according to past SBJ reporting. The research includes projects outside of downtown, such as Eko Park off Kansas Expressway and Greenway Studios near Ozarks Technical Community College.

A recent comprehensive urban housing study by Southwest Valuation LLC found loft occupancy in downtown and the Commercial Street district averaged 96% in 2017, and student housing was at a 93% average occupancy rate.

Though College Town International’s planned development isn’t coined as a student housing complex, Weinstein said his target residents are students and young adults. 

The company has worked on many housing projects, including a recent project near the University of California-Davis that Weinstein said has since sold. 

In an effort to broaden the portfolio outside of California, Weinstein looked to the Queen City. 

“We liked the location relative to the campus. We think it’s walkable at times, and other times the Bear Line will be there, as well,” Weinstein said. “We also like what’s going on with the campus with President [Clif] Smart.”

Though MSU’s 2018 enrollment was its second-highest figure on record, school officials reported a 4.6% preliminary enrollment drop in August to 20,330 students from 21,309.

Development officials aren’t worried about the attendance figures or the nearby competition.

“I don’t think we’ll have any problem with leasing,” Weinstein said. “The research we’ve done shows people want to live downtown, they want to live within close proximity to MSU, Drury and OTC. There’s a robust emerging market for that.”