The current surge of commercial construction in Allen County isn't the result of a burst in population. According to civic leaders and commercial developers, it's the mad dash for "new" buildings as opposed to recycling older real estate.
Retail stores, theatres, restaurants, and grocery stores are springing up on a regular basis in the city, with primary commercial building efforts taking place in the suburbs. One must wonder how our slow population growth will support these new businesses and what will happen to dozens of spaces that continue to stand empty.
There appear to be many reasons for this sudden construction surge in newly- manufactured buildings, strip malls, and medical facilities in the outlying areas of Fort Wayne. Developers say the strong economy we are experiencing has prompted national businesses to look to the Midwest to expand. Areas like Fort Wayne are hotbeds for growth with our outstanding school systems, low crime, ready infrastructure, and accessible workforce. Residential building is peaking in the Allen County area and where wide-spread residential areas develop, so does the need for service-related businesses.
Currently, the hottest retail and residential market in the county is the Dupont Road and Coldwater Road area. It's an area that has developed in excess of 20 different subdivisions of individual residential homes in the last two years.
"We have had several years of fierce residential growth," says Jim Norris, Allen County building commissioner. "Nearly 2,000 single family homes were built last year - the year before 1,930 new homes were constructed. We used to think that the rule of thumb was 1,000 to 1,200 new home starts within a year was the norm. Now it's much higher."
It's also prime property for new businesses. "We have actually done that at Pine Valley Shopping Center," says Stan Phillips, vice president at Harding Dahm. & Company. "It is a 93,000 square-foot shopping center that needed to be rehabilitated badly. We worked out an agreement with the owners to bring in a contractor and do a major renovation of that center. They want to be able to walk through the development, or to be able to see it before they commit."
In addition, Phillips believes the rapid growth of the Dupont and Coldwater Road area is primarily due to the initial development of two new hospitals (Parkview and Lutheran) and a medical facility.
While the northwest quadrant of the county is currently realizing rapid commercial growth, community leaders and developers are diligently working toward the expansion of businesses in the northeast and southwest. However, the biggest obstacle appears to be utilities' infrastructure and restrictions on types of industry that can occupy current real estate and proposed manufacturing sites.
"There is a master plan within the county for three large economic development zones," says Phil Laux, president of the Greater Fort Wayne Chamber of Commerce. "We actively market the community in a number of ways. Probably one of the areas of focus where we have spent a lot of time and energy and money in the last two years is at the airport-the Airport Development Zone. The airport has 450 acres and through a piece of legislation developed in 1995, we are able to provide a number of tax incentives for companies to locate in that zone just as Kitty Hawk did."
While that sounds inviting, there is a dilemma. The restrictions set in place by the Airport Authority require that any business locating in the zone must be air related, which immediately eliminates manufacturing companies. Unshaken, Laux is optimistic they will soon have occupants on the property that do comply with the covenants.
"There are other service businesses for cargo companies and in fact other cargo companies that we are working with both domestically and internationally," Laux says.
Additionally, Summit II, a light industrial park is developing on 116 acres of property located between Washington Center Road and Ludwig Roads, just north of the city. Aesthetically, Summit II, which is being developed by Miller-Valentine Group, will feature the same appointments that are provided in Summit I, including curbed streets, professional signage, and an assurance that all of the buildings located on the property will meet the strict specifications of the developer.
Another area of light- to mediummanufacturing that will soon realize a facelift and added industrial development is the Centennial and Congressional Industrial Parks.
"As the property managers of the Centennial Industrial Park, we are working with the city to redo all of the streets and radius intersections throughout the park, and add a traffic signal at the intersection of Hillegas and Independence Drive," Phillips says. "We are hoping to kick that off later this year or in 2001. Funds have already been committed for it and we are ready to go."
Even so, the question still remains as to why developers invest millions of dollars into new property when so much existing, vacant commercial property exists? Consider the Scott's Food Store in the Parkwest Shopping Center, which remains vacant when just across the street Jefferson Pointe Mall and Apple Glen Crossing are under construction.
Who can overlook the fact that years have passed and Southtown Mall remains virtually empty? In addition, there are literally hundreds of uninhabited storefronts and office spaces in downtown Fort Wayne. With a reported miniscule 2 percent increase in population, where will the market come from to support the widespread growth of commercial and industrial properties?
"We do have an inventory of vacant properties and it's really driven by the client and whether they want to retrofit something," Laux says. "When recycling current real estate there are some serious issues to consider, including the number of facilities that are currently available that have environmental problems. Until there is total absolution from any liability, I am not sure that anybody is willing to go into those buildings."
"One of the things that we as a community need to do a better job of is learning how to recycle real estate," says Don Steininger, president of Steininger Development. "There are a lot of vacant commercial buildings that exist at great locations, but they just don't fit what people expect anymore. The dynamics have changed, the population base has changed and the types of shopping that people want have changed."
"Eve yone wants new," Phillips says. "The national firms want to build to their own specifications. They do not want to retrofit. I just think that there are some current retail developments that simply offer the wrong sizes at the moment. For instance, consider the Scott's Food Store in Parkwest, they have a 43,000 square-foot store that's available right now. The big box users are 65,000-90,000 square f
eet in size. You can't expand that particular facility, so what one needs to do is accept lesser-sized national tenants, or subdivide the space to accommodate smaller users.
"You ask whether our small increase in population will have the capability of filling all these new retail marts, and I really can't tell you," Phillips adds. "I just can't give you a good answer on that. No one has a crystal ball."
Of course Southtown Mail has its own set of statistical problems. For years the Fort Wayne community has been waiting for some signs of improvement to the property. The size of the mall has always been a problem. Even though it is located on prime property, many view Southtown Mall as a crumbling building with little potential.
"The problem with Southtown Mall has always been its size," Laux says. "My own personal belief is that you have to knock about half of it down, and improve its curb appeal. Chain link fencing and asphalt gives it the look of a prison."
"If the mall was originally built half the size it was, it may have succeeded," Steininger says. "Because it is so big, they couldn't maintain it at that size and therefore they started doing everything from cheapening the basic product that they sold to having stores sitting empty. They were doing all the things that you don't want to do unless you are desperate, and once you start down that road, there is no way of turning it around."
"I don't think that retail in that large of an environment is the answer," Laux says.
"There will soon be big news concerning the future of Southtown Mall, but at this time I am not at liberty to announce anything," Steininger adds.
In order to eliminate the excess of unrecycled properties, real estate developers have even considered imposing a clause in the original contract that would dictate the owner or new buyer of the real estate would be compelled to restore, recycle, rebuild, and reinvest in the property within a certain period of time. It is unlikely, however, that such a clause would attract new ownership.
"My own personal belief is that if I am in the market and I can turn something around and you impose a restriction like that on me, I will go away," Laux says. "I'm willing to roll the dice on a certain amount of risk, but if you put restrictive clauses and covenants in the deal, I will find another deal."
While a current population growth of only 2 percent in Fort Wayne isn't considered major, it has, as patterns reveal, contributed to steady growth over the past 10 years. Will it have the ability to sustain the recent influx of new retail, commercial and industrial growth? Some believe that if the economy is doing well, businesses will succeed and we will realize even more new growth to the area.
"The one thing that I am convinced of is that retail is driven strictly by how much money people have in their pockets," Steininger says. "We don't have tremendous growth in Allen County, we have pockets of it. The answer is simple, as long as the average person has more money to spend, there will be someone there to give them that opportunity."
A well-used term in the real estate industry has always been location, location, location. As the need for growth and available space continues, so too will the yearning for new stores, new atmospheres, and big-city recreational opportunities.
"I just heard a phrase used by another community leader who happens to be a good friend of mine, Jim Johnston at National City Bank," Laux says. "Johnston said to me that while he has been in town a long time and with everything that's going on right now, this is the most excited he can remember being about the future of Fort Wayne."
