There was a time, not that long ago, when it seemed there was announcement after announcement about new developments and expansion projects in Springfield. But the announcements have stopped … and some of the large-scale developments that were promised have yet to take place.
While each project has its own unique set of circumstances, one major factor that is preventing many new construction projects from moving forward is the economic downturn.
“It is definitely tougher to get new construction financing today than in previous years,” said Robin Loftus, chief operating officer for Security Bank in Springfield. “New construction is tough because it carries more risk so bank regulators are watching very closely. The other thing is, property values are difficult to determine right now … but there is certainly money to be lent, that’s not the issue. We are sitting around just like everyone else waiting for the economy to improve.”
John B. Clark, a broker/owner of The Real Estate Group, said that during his 40-plus year career in real estate, he knows that the economy will rebound – it always does. But, he does not recall a time when multiple projects were put on hold like they are in Springfield at the present time.
“Residential real estate has definitely improved thanks to the first-time homebuyers program,” he said. “But for commercial real estate, there aren’t as many, if any, incentives out there right now.”
And, for Richard McCord, president and chief executive officer of Illinois National Bancorp, reading articles about whether the worst is over and hearing the term “double dip recession,” makes him unsure of the immediate future.
“I think it’s going to take a further decline in the rate of unemployment,” he said. “We saw a little last month but very, very little. If that is the start of a trend, that would bode well for activity to pick up in the spring.”
Construction projects can’t just start up on whim, there is organization and preparation that needs to happen “and they would want to try to start at the beginning of a construction season and we’re already nearing the end of this one,” McCord said.
“I would love to see some large-scale projects in the capital city and everybody related to the construction industry needs it. It’s not just the banks, it’s the HVAC, and the electricians and the plumbers, everybody needs it,” he said.
Nevertheless, several large-scale projects are still in the works. Here is an update on a few of the local construction projects that have been delayed, but not cancelled.
Scheels and Legacy Pointe
The latest opening day timeline for Scheels, a sports megastore, is July 2011.
The 203,000-square foot store, which will take 18 months to build, was originally slated to open in June 2010.
“With the economic times and everything that all got pushed back,” said Steve Luker, managing partner of Legacy Pointe Development Co. “They said ‘We still want to be in Springfield. We’re 100 percent behind Springfield’ and they’ll say that to today whether they’re breaking ground, which we hope is probably somewhere later this year or it gets pushed back until spring of next year, they still want to be in Springfield, Illinois. They want to be the anchor of Legacy Pointe.”
Luker considers Scheels the catalyst of the 276-acre development – retail business owners will come knocking on his door because they want Scheels as a neighbor.
The original thought was 400,000-to 500,000-square feet of supporting retail businesses would be ready to go when Scheels opens, but the economy has put a damper on that idea.
“Those retailers that were so anxious to see this thing moving forward and verbally committed to coming into the market now have said ‘We need everything to rebound back to where we want it to go,’” Luker said.
While the economy caused a decline in interest, the opening of the MacArthur Boulevard extension is expected to benefit the development.
“Once the roadway opens up out there and people can actually get to the property and understand what’s going on out there that changes a lot of different things. I mean right now we’re in the middle of a cornfield with no access to get there,” Luker said. “We continue to shop it and we have good response on what can happen eventually.”
Scheels is working with Sampson Construction Co. from Lincoln, Neb. and Luker said the building project’s cost, including inventory, will be around $35 to $45 million. Legacy Pointe’s infrastructure is expected to cost around $40 million.
The project can’t get going soon enough for Luker when he considers the possible job creation with Scheels and any other businesses that come into Legacy Pointe as well as the number of expected visitors from outside the Springfield community.
“We’re waiting every day to see where we’re at on the financing. We’re close,” Luker said. “We’ve probably got about 30 to 45 days that we need to get that all done, get the bonds sold and then get what we need done out there for Scheels and then have the ability to go ahead and get construction started this year.”
Calvary Temple Christian Center
Between December 2002 and October 2003, Calvary Temple purchased three parcels of land totaling more than 270 acres on Springfield’s south side.
Today, Dan Shryock, director of worship arts at Calvary, remains optimistic that by next year part of the property will be put into active use.
“We would love to be able to prepare the soil and everything, and then plant grass and do whatever we could do this fall so that it can be ready next year,” he said. “I don’t even know if that would mean all of (the fields), maybe just the six ball fields perhaps, maybe not the soccer fields right away. Just whatever we can do, we just want to see it developed and used.”
Some infrastructure has already been done to what was previously known as the Xanadu sports project along Interstate 72. Calvary purchased the land in hopes to create an opportunity for family and youth sporting events.
“You think, why would a church buy that piece of property? We didn’t even know how that was going to work out, if that meant do we own something like this or would we partner with somebody? We’ve tried to find the best way to make that come about,” Shryock said. “One thing we’ve tried to do most recently is give the land away to the (Springfield) Park District or to the city and for various reasons we haven’t been able to work that out. So we’re still going down that road of developing the ball fields and the soccer fields and those sorts of things so we can get something going for the community out there.”
Since the purchase of the property, a developer created a master plan, which included the sports complex, a church, high school, daycare facility, a senior living community and other options such as a professional building. There was also land for a single- and multi-family home development.
“This again is something that we don’t want to do personally, we’re a church,” Shryock said. “We don’t want to be building houses and stuff so we’ve talked to developers who would like to purchase that land for that purpose to put homes on.”
The original thought was to sell pieces of the property and use that money to help pay for building a new church. But with the economic slowdown, undeveloped property is not a hot commodity. So for now, Shryock said they are considering moving forward with plans to build the church.
Calvary Temple is working with Martin Engineering to find out the infrastructure needs if they want to build the 70,000- to 85,000-square foot church in the near future. An early estimate for the church project is around $12 million, Shryock said.
“So we’ve just started looking at that and we haven’t gone to the city with that approach and specifically asked them what we need to do,” he said. “The big thing is traffic, having traffic studies done that are just taking into account let’s just build a church. What are those traffic studies going to show and what are they going to require as far as road improvements, street improvements, turn lanes, new streets?”
Going forward with building the church is a change from the original plan, which was to build the high school because of the space crunch Calvary Temple is currently feeling at its Jefferson Street location.
“It just became clearer to us the longer we looked at those plans and talked amongst the board and the congregation that you know we’re really a church, we want a new church and we just felt that we were going down the wrong road and we shifted gears and we thought what we need to do is start with the church.”
H.D. Smith
Plans for the expansion of H.D. Smith’s corporate headquarters in Springfield appear to be on hold. The original plans, which were announced in March 2007, called for the construction of a $50 million corporate campus in Park South and the creation of 600 jobs in five years.
Dale Smith, chairman and chief executive officer, and Chris Smith, president and chief operating officer, declined an interview with Springfield Business Journal “just because we don’t have a whole lot of definite plans in place for the expansion,” said Allison Worrell, from H.D. Smith’s marketing department. “It absolutely is happening but we would feel more comfortable waiting until we have some more definite details before we scheduled an interview.”
H.D. Smith is a national supplier of healthcare products.
Raegan Hennemann is a freelance writer from Springfield.
