Archive for Sunday, October 28, 2001

North Lawrence awaits boom

Property investors remain optimistic in face of economic slowdown

October 28, 2001

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A string of for sale signs in front of North Lawrence businesses isn't a sign of a neighborhood faltering during a slowing economy, several investors and real estate agents said last week.

Drive up and down North Second Street, the main commercial strip in North Lawrence, and you'll find more than a dozen commercial properties up for sale or lease in a 2.5 mile stretch.

The properties range from a now out-of-business salvage yard to an antique store, but the large number of listings aren't necessarily an indication that business owners are fleeing the traditional blue-collar area with the threat of a recession looming.

"I think all the property for sale is a healthy sign, not a negative one," said Samih Staitieh, owner of North Lawrence's Westheffer Co. and a principal in the ownership group of the former Tanger Factory Outlet Center property. "I think they see that by moving out they can get more for their property. I think they see that a redevelopment of North Second Street is going to happen."

Money matters

Doug Compton, president of Lawrence-based First Management Inc., not only has seen the potential in North Lawrence but also the value, which has led his development company to invest in the area.

Compton is planning a 17-acre industrial park immediately north of the TeePee Junction on U.S. Highway 24/59. The park, as yet unnamed, would feature five 3-acre tracts geared to small industrial users, such as contractors, excavators and other industrial service companies.

"I think North Lawrence is going to become one of the hotter areas for commercial and industrial development," Compton said. "The reason is called supply and demand, and also affordability.

"If you compare land prices north compared to what people are paying south of the (Kansas) River, I think the better value is probably north right now."

Ted Boyle, president of the North Lawrence Improvement Assn., agrees that land prices have a lot to do with the real estate activity in North Lawrence, but he thinks it has created an attractive situation for both buyers and sellers.

"Most of the commercial property on North Second Street has probably doubled in value in the past 10 years," Boyle said. "That has made it attractive to folks looking to sell. But North Lawrence property is still much cheaper than South Iowa Street or West Sixth Street. That makes it attractive for people looking to buy."

The land values also might help North Lawrence during the rocky economic times that many investors are bracing for.

"I think the idea today is that people are looking for a value more than ever, so North Lawrence might benefit from that," said Doug Brown, of Coldwell Banker Commercial McGrew Real Estate.

Whether that's the reason or not, most investors agree that North Lawrence already is getting its fair share of inquires.

"I think the reason a lot of people are listing their property is because a lot of people have been looking north, and that some times creates a frenzy with sellers," Compton said.

A key property

One property that many in North Lawrence are keeping an eye on is the former Tanger Factory Outlet Center, now called the I-70 Business Center. It has been just more than a year ago that a group led by Staitieh took ownership of the struggling outlet mall and changed its focus to attract more office users than retail businesses.

The strategy hasn't produced overnight success. The 88,000 square foot center still has more than 20,000 square feet of space available to lease and 5 to 7 acres of ground that hasn't been developed yet. But if the center does take off, some are predicting that North Lawrence will too.

"Probably the very best thing that could happen for North Lawrence is for the Tanger site to be full again," said Steve Glass, whose LRM Industries owns 6 acres of undeveloped ground along North Second Street. "I have always seen that as the key piece of property in North Lawrence."

The center currently does play home to a test-scoring center for NCS/Pearson, an office for the Kansas Department of Motor Vehicles, and several other smaller offices.

"In some ways, I think if it develops with office uses, it will be even better for North Lawrence than if it were a mall," Glass said. "All those employees will be there everyday and they'll need a place to eat, a place to shop, a place to fill up their car."

Staitieh said he was confident the center would attract more office users in time. He said marketing efforts for the center have focused on attracting larger corporate office that can take advantage of the center's 700-space parking lot and need good access to I-70.

Staitieh said the group continues to market the center's undeveloped property to be used by a grocery store to serve the growing residential population, but has not yet found an investor.

"So far, we think the center is doing well," Staitieh said. "Obviously we would like to see more people coming in, but we have had some good inquiries. But when you are working with larger companies, these deals don't happen overnight."

A new look

The changes that already have taken place in North Lawrence haven't happened overnight either. It's a consensus in North Lawrence that road, landscaping and drainage improvements made in the North Second Street area by the city in the mid-90s started investors looking at the area in a different light.

The light has gotten brighter as talk of industrial development occurring around the Lawrence Municipal Airport has increased, and with the hope that North Lawrence will become a popular area to serve fans at the nearby Kansas Speedway.

"I think the race track has created some curb appeal for North Lawrence," said Kelvin Heck, a commercial real estate agent with Grubb & Ellis/The Winbury Group in Lawrence. "I'm not sure there is a lot of substantive aspects to that right now, but it probably has the potential to add more hotels and restaurants in the area."

Neighbors are expecting that to happen, along with other commercial developments that would serve a growing residential population, Boyle said.

"We think what we're seeing on North Second Street is the beginning of a change from more of a car-lot, auto-repair strip to a more diverse retail and service area," Boyle said. "We think North Second Street will look a lot different in the next three to five years."

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