A group of Lawrence developers is starting a project to make more room for small, locally owned companies along the South Iowa Street corridor.

Lawrence developer Jeff Shmalberg is leading a group of investors who plan to start work on a 20,000-square-foot retail and warehouse building at the northwest corner of 33rd Street and Ousdahl Road.

The building will be split into six to eight spaces aimed at attracting locally owned companies that would like to be near the high traffic counts generated by the area’s large national retailers.

“I’m a big supporter of downtown Lawrence,” said Shmalberg, who also is developing the Downtown 2000 project in the 900 block of New Hampshire Street. “But you can’t ignore that there are a lot of businesses out on South Iowa that draw a lot of people.”

The new building will be directly east, or behind, the Kohl’s Department Store, across the street from Wal-Mart and about a block from the Home Depot and Best Buy shopping center.

The project also will have a twist: It will be built as a commercial condominium, meaning businesses will own the space that they occupy instead of renting it.

Cory Brinkerhoff, broker at Brinkerhoff Real Estate, is marketing the project. He said the development group thought small businesses would rather own space than rent it, but they have been unable to do so because of the price of commercial real estate in Lawrence.

Brinkerhoff said many small-business owners were forced to build a larger building than they needed and rent the extra space. He said the cost of commercially zoned land made constructing small buildings financially unfeasible.

“The local businessman, unless he wants to become a developer and a landlord, has very few opportunities to own commercial real estate in this town,” Brinkerhoff said. “That seems to be a major problem.”

Cory Brinkerhoff, a real estate broker, walks near the intersection of 33rd Street and Ousdahl Road, where developers plan to build a 20,000-square-foot retail and warehouse building. Brinkerhoff, who is marketing the project, was pictured last week near the site.

Doug Brown, an agent with Coldwell Banker Commercial McGrew Real Estate, was involved in one of the last attempts to start such a project. His company developed the Monterey Business Plaza near Sixth and Eldridge streets in the late 1990s as a commercial condominium, but it soon abandoned the idea after experiencing a lack of buyers. It became a typical project with businesses leasing some of the units.

But Brown, who is unconnected to the proposed development, thinks the commercial condominium idea is a good one.

“The lack of available commercial property is hurting the small-business owner here,” Brown said. “Our community has always thought constraining growth would help the small-business man, but it has done the exact opposite. Prices have gone up and it has made it difficult for the small-business owner to carry his own weight.”

Prices on the units are expected to start at $250,000, Shmalberg said. He plans to begin construction as soon as buyers are found for at least three of the units, and he hopes that will be by spring.