Lower rent, tax incentives fuel north-side commercial

by Christine Ballew-Gonzales

SBJ Contributing Writer

While many retail, commercial and industrial business owners continue to favor south-side locations, interest in north-side locations is still there and could rise as time goes on, according to Kirk Heyle, of Heyle Realtors & Counseling Services LLC.

Heyle said north-side commercial real estate comprises at least half of his business. While the northwest and northeast parts of Springfield have traditionally been thought of as less desirable business locations, Heyle said that attitude is beginning to change slightly.

The northwest and northeast sides have their advantages, the Realtor said. "Most industrial pockets are located on the northwest and northeast sides," he said.

Major thorough-fares, good traffic flow and development interest also contribute to the viability of north-side business locations. The continuation of James River Expressway in the near future could also be a point in the north side's favor, Heyle said. "In the next year or two, we'll have the loop around the city completed," he said.

But perhaps the greatest advantage of a north Springfield business location can be found at the bottom line.

"South-side locations are almost exclusively higher," Heyle said. "In the next 10 years, you'll see a lot of businesses considering the northeast and northwest sides just because of cost."

Market study information gained from Heyle's Web site revealed that office-space lease costs range from $3 to $14 per square foot per year in the northwest and northeast, while office locations in southwest and southeast Springfield lease for $1.25 to $17 per square foot per year.

Retail facilities in the northwest and northeast parts of town lease from $2.85 to 10.50 per square foot per year, with southwest and southeast retail locations fetching $4 to $15 per square foot per year.

Purchase prices for north-side commercial real estate depend largely on the age of the building, but since many north-side properties are older, a buyer purchasing a north-side building for his or her business can sometimes save up to 50 percent compared to a more modern building, Heyle said.

Property values on the north side will also continue to rise, as long as the properties are well-maintained, Heyle said.

"For the most part, properties there will continue to go up in value, as long as they are kept up. You might need to put some money into them, but there are some very desirable north-side properties," he said.

Architectural modifications and buying adjoining properties to increase parking space are two ways to increase the feasibility of a north-side business location, Heyle said.

"These are just a few things that can be done to make older properties work," he said.

Mary Lilly Smith, economic develop-ment coordinator for the city of Springfield, said there are also tax incentives available to manufacturing and warehouse businesses that choose to locate in the enterprise zone.

Choosing the enterprise zone, which primarily consists of the north and central parts of Springfield, means that manufacturing and warehouse businesses can receive state tax credits and local property-tax abatement.

Smith said she has observed growing interest in north-side business locations. "I can see that there are more businesses locating on the north side, and we're getting more franchise interest in that area, as well," she said.

Bob McCroskey, of Bob McCroskey Real Estate, said local pioneers who have fixed up their north-side properties and refurbished north Springfield have been the catalyst for increased business interest on the north side.

"I think the north-side stigma has burst," he said.

More than half of McCroskey's commercial real estate business is comprised of north Springfield properties. McCroskey, who is also the president of the North Springfield Betterment Association, said the affordability of north Springfield locations is a driving force behind the increased business interest on the north side.

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