More housing needed in downtown, study reveals

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A recent real estate market study of downtown Springfield confirmed what city officials have known about redeveloping center city: the ingredients for success are a combination of housing, office and retail developments. |ret||ret||tab|

The housing sector is leading Springfield's pursuit for redevelopment, according to city planners. |ret||ret||tab|

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Housing|ret||ret||tab|

While many people work downtown, residences are hard to come by. The study reports an employee-to-resident ratio of nearly 4-to-1; there are about 7,800 employed downtown compared to a population of 2,000. |ret||ret||tab|

"It's a red flag," city planner Bill Weaver said of the ratio. "What it's saying is that there's a shortage of residents in downtown, certainly in what you'd expect to see in typical downtowns."|ret||ret||tab|

Weaver served as the city's research coordinator on the study that suggests as many as 300 new housing units are needed. The city is seeing about 10 to 20 new housing units each year.|ret||ret||tab|

"We're advocating more," Weaver said. He'd like to see 300 units come online over the next five years.|ret||ret||tab|

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Office|ret||ret||tab|

Center city's 29 single-tenant office buildings and 20 multitenant buildings make up 28 percent of the region's office space, the study showed. Seventy percent of downtown office space is leased.|ret||ret||tab|

The average rental rate is less than $9 per square foot. "The market is encouraged to look at that estimate and look at their projects," said Weaver. "If you can't rent for that rate, then it's not time to build that development it's not feasible."|ret||ret||tab|

But Weaver said rental rates could be rising with renewed interest in downtown properties.|ret||ret||tab|

"There are more sales occurring," he said. "That activity probably is resulting in some of these properties showing an increase in value. You've got to be very careful about that because you've got to purchase the building at a price that will allow you to do all the work to it and still rent it at a feasible rent."|ret||ret||tab|

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Retail|ret||ret||tab|

The good news in retail is diversified tenants and positive occupancy rates; the bad news is a lack of national retailers. |ret||ret||tab|

"This suggests that the retailers in the study area do not rely on the surrounding buying power from households but instead rely on the daytime employment, arts/entertainment/nightlife draw and destination customers," the study stated.|ret||ret||tab|

Although national retailers are nowhere in sight, Springfield Center City coordinator Vern Morgan likes the mix of retailers: of 86 establishments, 33 are eating and drinking places, 33 sell retail goods and 20 offer services. The occupancy rate is at 86 percent.|ret||ret||tab|

"That is a pretty nice mix," he said. "At this point in time, we don't necessarily have the demographics to attract those national retailers."|ret||ret||tab|

Southwest Valuation LLC, located at 333 Park Central East, Ste. 505, performed the study beginning in July and released the data in November. |ret||ret||tab|

The area studied is bordered by Chestnut Expressway, Benton/Kimbrough Avenue, Elm Street and Main Avenue.|ret||ret||tab|

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