A plan to convert the former Springfield Tire Exchange at the northwest corner of West McDaniel Street and South Market Avenue into a mixed-use development hinges on City Council's actions to declare the area blighted and approve a tax-abatement plan, according to the attorney representing developer Jason Murray.
The proposal, which was recommended for approval by the Land Clearance Redevelopment Authority and city staff, would give Murray 100 percent tax abatement for 10 years on new improvements and a 50 percent tax abatement for years 11-25.
Husch Blackwell attorney Shawn Whitney said the $3.3 million redevelopment project hinges on the tax abatement plan.
“It’s just not feasible without the abatement,” Whitney told council.
He said a tax-impact analysis has been completed, and with Murray’s improvements, the 0.61-acre property, which is currently valued at $835,000 and is located across the street from College Station, would be worth $2.6 million.
“The margins are too narrow,” Whitney said. With the abatement, Murray could expect a 5 percent cash-on-cash return, he added.
Murray owns 10 downtown properties that serve mostly residential tenants. Last June, Murray unveiled a roughly $1 million renovation of 11 loft apartments in the Artifacts building at 520 W. Olive St. Murray also owns the Stove Works Lofts, Park Central Lofts and Palace House Lofts through Palacio Properties LLC, according to
SpringfieldLoftApartments.com.
His plans for the former warehouse and automotive garage include constructing 23 loft apartments on the second floor of the two-story building and creating three separate retail spaces and a parking garage on the first level, Whitney said. He said the building, which was once home to Keyes Gallery and the Springfield Tire Exchange, is currently vacant.
Economic Development Director Mary Lilly Smith said water damage and outdated design features exist on the property, qualifying it for a designation of blight. The blight designation is necessary for the developer to be eligible for the tax abatement, according to Smith.
Other than Whitney, no members of the public addressed council about the proposal at last night’s meeting. The redevelopment plan is expected to receive a second reading and a vote at the May 7 council meeting.
For more on the April 23 council meeting, check out the April 30 print edition of Springfield Business Journal.
