Filling Empty Boxes: Businesses, nonprofits reanimate hollow shells vacated by retailers

“We’re the ultimate recycler,” said CBCO Executive Director Don Thomson. “We take fluid from one person and recycle it to another, and so recycling a building, I think, is just great.”

CBCO will spend about $2.5 million renovating the 54,000-square-foot building at 220 W. Plainview Road that formerly housed a Summer Fresh Supermarket. Owners David and Lesley Trottier agreed to sell the nine-acre property to CBCO for $4.5 million after learning that the building was a perfect fit for the nonprofit’s needs.

Businesses, nonprofits and public institutions in Springfield have honed in on big-box buildings vacated by major retailers and grocery store chains in recent years. These spacious commercial cavities typically offer beau coups parking, great visibility and a cost-effective alternative to new construction.

“And recycling a building is to the betterment of our community,” Thomson added.

Square feet savings

Examples of the big-box conversion trend abound.

A year ago, the Social Security Administration moved its 60-plus employees into a more than 50,000-square-foot former Smitty’s grocery store at 1570 W. Battlefield Road after inking a lease with Davis Properties.

In 2003, Vatterott College signed a long-term lease with CRW Properties Inc. for the former Consumers Market at 3850 S. Campbell Ave. and spent $1 million remodeling the 63,000-square-foot space as classrooms, medical labs and administrative offices.

In 2002, Great Southern Bank purchased a 70,000-square-foot building previously inhabited by an Albertson’s grocery store and remodeled the space as an operations center that now houses roughly 200 employees.

Doug Marrs, Great Southern’s director of operations, said the bank settled on the six-acre property at 218 S. Glenstone Ave. after looking at several real estate options, including a hotel and a warehouse. The grocery store was gutted and remodeled as offices, conference rooms and cubicles for employees from the bank’s management, marketing, information technology, accounting and customer service departments.

All told, Great Southern spent about $60 per square foot on its South Glenstone operations center, said Marrs, who conservatively estimated the average rate per square foot for new construction was $110 at the time.

“Coming into an existing building had some real benefits to it, primarily cost,” he said. “It was certainly a lot more cost-effective than going out and buying raw land and building from scratch.”

On the opposite side of town, the Springfield-Greene County Library Center picked up a relatively new building at 4653 S. Campbell Ave. for $2.7 million after lumber and building materials supplier Payless Cashways closed in the late 1990s.

“There aren’t a whole lot of uses for this size facility as a whole, and they had in the contract that it couldn’t be sold for another lumber yard,” said Annie Busch, executive director of the library district.

Rear loading docks, covered staff parking and an ideal setup for a drive-up window were among the building’s selling points, Busch said.

Costs associated with the library district’s first big-box renovation project were palatable, Busch said. Altogether, the district spent about $75 per square foot to acquire the property, renovate the building and furnish the center.

“That’s really the story about this building – what an incredible value it was when it was all said and done,” Busch said.

The library district also renovated a former furniture store on North Kansas Expressway as the Library Station with an attached Panera Bread Co. in 2003, and Busch said she’s learned a lot from the two projects.

“Just because it’s a big building sitting there doesn’t make it a good deal,” she noted. “You have to evaluate the shape that the building’s in, the location, all of those things. If all those things are equal, we like recycling buildings.”

Finite market

Incredible Pizza Co. franchisees need at least 50,000 square feet to open one of the family-friendly funhouses, and that’s not always easy to find, said company founder Rick Barsness.

“It’s the only thing that works for our concept,” he said. “We are in grocery stores, Wal-Marts, Kmarts. We’re in an empty Home Depot as well.”

With 15 franchises up and running and 63 more sold, Incredible Pizza is on the hunt for big-box buildings in high-traffic areas around the country. Finding the real estate is a chore and beating other like-minded companies to the negotiating table is an even bigger challenge, Barsness said.

Hobby Lobby and Burlington Coat Factory are Incredible Pizza’s main competitors when it comes to leasing big-box sites for $5.50 to $7 a square foot in other markets, Barsness said, adding that Wal-mart has emerged as an ally.

“They love us,” he said. “They have usually just gone down the street to a bigger location, leaving the old one, and they don’t want any retail in that location competing with them.”

Like its competitors, Incredible Pizza works with national commercial real estate firms to scout prime spots for new stores, and Barsness said the location of future franchises is largely dictated by the availability of big boxes.

“Five years ago, it was real easy to find them,” he said. “Now, today it’s a whole different ballpark. … It’s become so competitive that we … start bidding on the deal long before the lease is even up.”

Barsness said lower lease rates allow Incredible Pizza franchisees to spend about $100 per square foot on renovation costs, compared to $130 or more per square foot for new construction.

“Hobby Lobby has even started building their own buildings. That’s a first for them,” he added.

“At some point, we may have to start looking at (new construction), because the big boxes are getting taken.”

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