'Nothing to stop us'

The Heer’s has been the recipient of much fanfare and wishful thinking since the downtown department store closed its doors 20 years ago: In 1995, after the purchase by Springfield businessman Warren Davis; in 2004, when Columbia developer Vaughn Prost took it over; and again in 2007 when St. Louisan Kevin McGowan unveiled his redevelopment plans.

But those close to the current $15.7 million renovation of the long-vacant iconic building say things are different this time around.

Springfield Economic Development Director Mary Lilly Smith said what sets apart the current effort from previous developers is that financing is in place.

“No one else has ever been in that position before,” Smith said of Dalmark Group and Heer’s Luxury Living LLC.

Though the other three developers had plans for how they would secure financing, ultimately the funding pieces never fully materialized.

Smith said a federal tax credit investor has been part of the ownership group from the beginning and Metropolitan National Bank is funding the bridge loan on the sale of state tax credits, which she said would be sold after construction wraps up. Dalmark and Heer’s Luxury Living also have a construction loan in place and a $750,000 small-business loan from the city, as well as property tax abatements lined up for the improvements.

“There is nothing to stop us,” said Zac Nichols, project manager for Lee’s Summit-based Dalmark.

Unfamiliar territory
On June 20, building owner Heer’s Luxury Living held a media tour and public groundbreaking ceremony to thank local supporters and celebrate construction work – a phase the previous owners never knew.   

Workers in hard hats scurry around inside to create 80 market-rate and luxury apartments above first-floor retail space. While rust still clings to some pillars, and graffiti lines the walls of the stairwell, Nichols said the project should be complete by September 2015 in time for the building’s centennial celebration.

“As of today, the Heer’s Luxury Living website is up and running and we are starting the waiting list,” Nichols said during the media tour, which gave city officials and local media a look at the first and third floors. “We are leasing.”

Nichols, the son of Dalmark founder and Heer’s Luxury Living co-owner Jim Nichols, said while general contractor Straub Construction is from the Kansas City area and the architect is from St. Louis, the developers have made a concerted effort to hire locally.

Springfield-based Anderson Engineering Inc. is handling civil work, while Mettemeyer Engineering LLC is over structural designs. Zac Nichols said among the local subcontractors enlisted are EPI Construction, Fitch Electric LLC, Progressive Plumbing Inc. and Signature Home Comfort Heating & Air Conditioning Inc.

 Zac Nichols said among the subcontractors enlisted with local offices are Advanced Surfaces Inc., Overhead Door Co. of Springfield, Jayhawk Fire Sprinkler Co. Inc., Fitch Electric LLC and Progressive Plumbing Inc.

“I went to school here at Missouri State. I lived here for six-plus years, and I still own a home here,” Nichols said.

“This means a lot to me to come back to Springfield. I know for the city this is a really iconic structure.”

Financing mechanisms
Though both father and son said publicly financing was in place on June 20, neither responded to follow-up questions about the sale of the tax credits by press time. Jim Nichols has told Springfield Business Journal the sale of tax credits should garner $5.6 million.

Representing a piece of the financing puzzle, Metropolitan National Bank President and CEO Mark McFatridge said he is confident the developers – and their $100 million development portfolio – will follow through on the plans now in motion.

“In a deal like this, there are several ways for financing companies and banks to get involved, whether it’s the construction loan, the permanent financing, or, in this case, there is some tax-credit financing involved,” McFatridge said, declining to disclose specifics about the bank’s role. “We had to do a lot of due diligence on the project itself, and we had to do due diligence on the participants, and then we had to do due diligence on the financing structure in place to see if there was a way for us to participate.

“They are people who get done what they say they’re going to get done, and those are the kinds of people we like to associate with.”

Allen Casey, owner of Casey Architecture and architect and project manager for the $20 million renovation of the The History Museum on the Square, has had a unique vantage point of the current and past Heer’s development plans.

“Prior developers have had some good concepts, but they weren’t able to make it all add up,” Casey said. “It appears now that Dalmark has accomplished that.”

His office overlooks Park Central Square and faces the ongoing construction at Heer’s. In 2000, Casey bought the Holland Building on the square and embarked on a multiyear, $1.8 million historic restoration of the five-story 1914-built structure.

“I’m looking at it eight, 10 and 12 hours a day and it’s nice to see the construction signs and hard-hat areas,” Casey said. “I am very impressed by the plans and, like everybody, glad that the project is coming together after all of these years. The Heer’s building, partly because of its size and partly because of its history, is just one of the most significant landmarks on the square.”

Casey said he met with Zac Nichols about six months ago to talk about their respective projects.

“I’m not involved in the inner-workings of their project, but I think they’ve looked at all the appropriate tax credits and incentive packages that the city can assist with,” Casey said. “It takes all of those incentives for a project like this to come together.

“This isn’t merely an enhancement for the public square. This has a very serious regional impact. If you think about the impact that more people living down here will have on all the restaurants and retailers in the area, as well as the urban events that are going on, I really think there is a direct connection between the growth and prosperity of the center city to that of the entire region.”