City, developer near agreement on Civic Plaza plan

Before the first nail is driven for Civic Plaza, city officials must hammer out the details of developer Bill Jester's center city plan.

The plan for Civic Plaza, a project of Jester's Resource Development Inc., calls for a six-story office building comprising 185,000 square feet of leaseable space primarily for office use and an accompanying five-story, 865-space parking garage. Located in the 300 block of East Central Street, east of the Busch Building, the complex is estimated to cost $28.5 million.

The two parties have been in negotiations since the city announced in late June its selection of RDI's proposal the only one submitted. According to officials involved, the major hang-ups have been related to financing and finding new offices for soon-to-be-displaced city workers.

"We're in the process of nailing all of that down with the city," said Jerry Hill, RDI's chief operating officer and legal counsel. "It's a complex project, and it's taking a while to put things together."

Both sides are confident a contract will be agreed upon in less than a month. Jester hopes general contractor Walton Construction can begin work by the end of the year and finish in late 2003.

Bond, retail issues

It's possible Jester and the city could reach an agreement similar to that between John Q. Hammons and Springfield, in which the city issues municipal bonds to fund the development and the developer guarantees the bonds.

"Conceptually, it's the same (as the Hammons agreement)," Hill said. "The bonds are paid back by the developer and the city is protected by the developer for liability of those bonds."

It is unknown how much of the $28.5 million will be paid for with the bonds.

What is known is that the city will own the facilities after 50 years. Jester will lease the land from the city for $1 a year until then.

Assistant City Manager Bob Cumley, who is heading up the project for the city, said the proposal is just what the city was looking for when it sent out the request for proposal.

"It met the city's criteria," he said, which was first-class office space with retail establishments.

Some of the retail possibilities include restaurants, coffee shops, dry cleaners, convenience stores and financial services, said Ken Schwab of Wilhoit Properties, who will be managing the lease space.

It is too early to name any possible retail tenants, Schwab said, but they will target the workers in the area. The first floor of the office building is designated for retail use.

"The retail in this is designed for pedestrian traffic," Hill added. "It's really designed to serve the several thousand people that will be on this block (300 E. Central) during the day. ... We envision that most of that retail is targeting foot traffic that is already in the area for business."

Demolition

The proposed site consists of five city-owned and -leased buildings. Demolition of those structures will displace the city workers occupying the buildings.

"We've got a number of employees that we're going to have to find a new home for," Cumley said.

Approximately 75 employees of the Health, Public Works, information systems, purchasing and accounting departments now occupy those buildings.

Added costs are prohibiting the city from taking the most logical solution of placing those employees in the new office building, Cumley said. However, it is a possibility some will move in there; others will relocate to old City Hall or to an off-campus site, he said.

Public versus private

Civic Plaza is Jester's first public/private project in Springfield.

Jester has developed other public/private projects in Texas, California, Michigan and Illinois, "all of which involved some city cooperation," he said. They were primarily developments for nonprofit organizations.

In this case, the parking garage has been the No. 1 challenge, he said. "Springfield is not a city that's accustomed to paid parking like a lot of cities are. You have to absorb more of the cost of a parking structure into the cost of a building."

But the garage does solve a long-term city problem. City Manager Tom Finnie said that since the early 1990s, the city has been interested in developing better use of the area, led by a need for more parking.

"It's one of the greatest felt needs that that entire complex has," Jester said. "The biggest problem is also the biggest opportunity."

Jester said tenants and city employees that work in the building will have parking provided, but others using the garage may be charged.

One tenant nearly locked in is the law firm of Husch & Eppenberger LLC. In fact, Bill Hart, managing partner of the firm, helped prompt Jester to devise the proposal.

"I had indicated to him that we were looking for office space in the downtown area that would be close to the courthouses," Hart said. His search came up empty. "There just wasn't much around," Hart said, that would meet his need for top-quality space of 20,000 square feet or greater.

He found that most of the new office space was being constructed in south Springfield.

The law firm likes the proximity to the courthouses, City Hall and its clients. "We have a number of clients that are headquartered downtown."

Jester has all but secured the top floor for the firm.

While the office building meets a downtown need, it also complements the activities of Jordan Valley Park, said Cumley.

"It will complement everything we're trying to do with Jordan Valley," he said. "Everything feeds off of one another. Anytime we can get a quality development in this area, it will encourage other quality development or redevelopment."

Jester sees it working both ways, too.

"Jordan Valley Park and all the things going on there just enhanced the potential of what this building could be and could mean for the city," he said.