O'Reilly, BKD looked at Heer's for headquarters

The country's third-largest aftermarket auto parts retailer and 10th-largest accounting firm both kicked the tires on the Heer's building before deciding to build headquarters elsewhere in Springfield.

Officials with O'Reilly Automotive Inc. and BKD LLP told Springfield Business Journal that their companies were among those that briefly explored the possibility of relocating their corporate offices to the former department store overlooking Park Central Square.

When BKD vetted the vacant downtown building, Jefferson City developer Vaughn Prost was still the owner. And O'Reilly was one of the prospective tenants courted by St. Louis developer Kevin McGowan, who bought Heer's from the city in November 2007 and now plans to renovate the building as 61 loft apartments above a Mike Shannon's Steaks and Seafood Restaurant. McGowan is awaiting final approval of an $11.8 million loan guaranteed by the U.S. Department of Housing and Urban Development to partially finance the $20 million to $25 million redevelopment project.

"There were three (Springfield-based companies) that looked at that building here in the past year," said McGowan, president and CEO of St. Louis-based Blue Urban. "All three would have been single-purpose users, and two of the three really took a hard look at it. ... The third made an inquiry, and we just never heard back from them."

McGowan said confidentiality agreements prohibited him from naming the companies, but he did say that the cost of leasing parking spaces in the adjacent Heer's Car Park likely discouraged the two more serious prospects from pursuing the deal.

"The cost of the parking was prohibitive," McGowan said.

O'Reilly spokesman Mark Merz said Heer's presented a number of challenges, including its distance from the company's main campus at 233 S. Patterson Ave.

"It was a facility that was in the price range that we were looking for; however, from a logistics standpoint, it just wasn't going to work for us," Merz said.

In June, O'Reilly began site work on a 117,000-square-foot headquarters just south of its corporate office. When the building opens in spring, it will house about 600 employees currently scattered throughout several Springfield offices.

In July 2008, O'Reilly acquired Phoenix-based competitor CSK Auto Corp. The $1 billion deal added 1,345 CSK stores to the O'Reilly chain, which now has 3,337 stores in 38 states. The pulled O'Reilly within striking distance of No. 2 auto parts chain, Virginia-based Advance Auto Parts. It also resulted in a 15 percent increase in corporate staff in Springfield.

BKD is another growing Springfield company that sniffed around Heer's when the firm's partners began considering expansion options three years ago. The accounting firm - the 10th-largest based on 2008 net revenue of $391.2 million - has been a 22-year tenant of Hammons Tower, where it currently occupies space on eight of the building's 22 floors.

On Aug. 28, the firm will begin moving its offices to a $21.5 million corporate headquarters immediately south of Hammons Tower. BKD will lease the second, third and fourth floors of the four-story, 109,000-square-foot building from developer Opus Northwest LLC.

BKD also ruled out Heer's due to logistical obstacles, said John Wanamaker, managing partner of the firm's Springfield-Branson-Joplin region. Large support columns spaced throughout the building's eight floors would have made it difficult to configure employee workstations, he said, adding that new construction offered several advantages over Heer's.

"We weren't too keen on doing a rehabbed building," Wanamaker said. "We really wanted something new. We were looking for a signature corporate office building for BKD."

At 5 p.m. Aug. 28, movers hired by BKD will begin the 48-hour process of transferring the firm's offices from Hammons Tower to the new headquarters across the street at 910 E. St. Louis St. Employees will report to work at the new offices on Monday, Aug. 31, Wanamaker said.

SBJ was unable to confirm the identities of the other two companies that McGowan said were potential commercial tenants for Heer's. Monett-based financial and corporate software developer Jack Henry & Associates Inc., which is building a Springfield campus near Battlefield Road and U.S. Highway 65, never expressed interest in Heer's, according to Scott Whisman, general manager of corporate services.

Carol Jones Commercial Realtor Skip Liebman, who previously worked with Prost to recruit office tenants to Heer's, said several Springfield businesses have long had an eye on downtown, but that suitable real estate is scarce.

"There's people out there that still want to move down there, and hopefully someday that will occur," Liebman said.[[In-content Ad]]