It’s taken two years, but dirt is moving and steel is rising at the 96-acre Springfield Plaza mixed-use development on the west side.
BioLife Plasma Services LP bought a 3-acre lot to build a 16,000-square-foot building that will serve as the company’s second Springfield location on the northwest end of the development near Sunshine Street and West Bypass. And Empire Bank purchased two lots on the north side of the project facing Sunshine.
Springfield Plaza Real Estate LLC, led by Sperry Van Ness/Rankin Co. commercial brokers Tom Rankin and Jeff Childs, is developing the estimated $78 million project that will eventually wrap around the Wal-Mart Supercenter on the corner.
With $9.6 million in property tax abatements for the project approved by Springfield City Council in 2012, publicly supported streets will connect Sunshine and West Bypass.
“The whole point of the development was to bring something new to an underserved part of the market – the west side of Springfield,” Childs said.
Research by the developers shows roughly 50,000 residents live within three miles of the planned shopping and office complex and nearly 130,000 live within five miles.
BioLife Plasma Services, which operates under the umbrella of Deerfield, Ill.-based medical device and pharmaceutical firm Baxter International Inc. (NYSE: BAX), will spend between $6 million and $7 million for land and construction on its new facility, said Jeff Parke, BioLife regional manager.
After a few sites were considered, Parke said the Springfield Plaza project was the clear winner to complement BioLife’s presence on Delaware Avenue and Erie Street, where the company collects plasma from donors to process into plasma-based therapies.
“We chose the west side of town with this new shopping center because that’s really where a lot of the growth is. The shopping center, we think, will be a next step for Springfield, and we wanted to be a part of it,” Parke said, citing the promise of being next to retail destinations.
Rankin said $1.8 million has been spent on infrastructure for the center, and he expects the roads in the first phase to be finished within 45 days. That includes a new signal at Sunshine and McCurry, a detention basin between Sunshine and BioLife and about 30 acres of underground utilities for retailers.
Retail is the first focus, and Childs said a handful of retail tenants have signed letters of intent, but roughly 180,000 square feet remains available – mostly in a 150,000-square-foot strip. There also are four lots available next to Empire Bank’s lots along Sunshine.
“We’ll have some available on the south end along West Bypass Street, but those are a ways off,” Childs said. “It’s a big project. It takes a lot of time to get all of the moving parts together.”
Rankin indicated a large office tenant was close to committing. Considering the high supply of developers pursuing a finite number of national retail chains, he said the process can take a long time. “They have a lot to look at, and they want to be where they are most profitable,” Rankin said.
On the city’s southeast side, the $22 million, 14-acre Farmers Park has met capacity for its office users, and retail is 80 percent leased, said developer Matt O’Reilly of Green Circle Projects.
The development’s 58 apartments have been lagging. After four months of leasing, the residential units are nearly a third leased at their $1.20 per square foot monthly rate.
“We missed the March to May prime leasing season. They will be full by next summer,” O’Reilly said by email.
By comparison, The U student housing downtown is 100 percent leased after this year’s renovation of the McDaniel building, according to a report during last week’s Salute to Construction Council meeting.
But the biggest dog in the Springfield planned development arena is still fighting to gain traction.
The Crossroads at 60/65, the sprawling 500-acre mixed-use development, has yet to land its anchor tenant five years after announcing plans. According to the development plan, the built-out project would value $400 million and create an annual economic impact of $66 million per year.
R.B. Murray Co. Executive Vice President Dave Murray said interest is building, but retail market conditions present hurdles.
“Retail sales have improved from a few years ago, but things are still anything but rosy,” Murray said. “Retailers are still moving at a snail’s pace, and they all want significant incentives of some type to locate on any site.”
According to the National Retail Federation, overall retail sales in 2014 are expected to grow by 4.1 percent, up from 3.7 percent growth in 2013 – but well below the 9 to 12 percent growth projections for online sales this year. Though retail sales dipped by around 4 percent in 2009, they have climbed by about that same rate in each year since.
As a result, a trend among retailers is to gain public commitments for infrastructure to limit their exposure to store construction costs.
In August, Wisconsin-based home improvement chain Menard Inc. appeared to buck the traditional developer-retailer relationship when it announced it was buying the former Hickory Hills school property on the east side of town for $4 million. Menards was targeted by developer Paul Larino as an anchor tenant for his 46-acre Hickory Hills Marketplace, but the retailer never signed on and Springfield Public Schools took back the former school grounds in December 2012.
While the loss at the ballot in August of the 3/4-cent transportation tax likely hurts development prospects, Murray said he’s not completely hearing crickets among national retailers for the 60/65 project.
“There have been two companies of late that have been to Springfield to look at it, and they are amused by it – that is, they’ve shown an interest. Are they ready to write a check? No. But they are asking the right questions,” Murray said.
“I am encouraged because it is the first time in the past six to nine months there’s been serious, how-can-we-get-this-done type discussions versus sit around and woe-is-me like everyone has done over the last five years.”
