Pumping New Life into Topeka

Although downtown Topeka revitalization efforts have been at the forefront of Topeka’s renaissance, several of the city’s blighted retail and entertainment strip mall centers are also receiving extensive makeovers designed to boost the capital city’s curb appeal and spur economic growth. Benefiting from fresh facades and store configurations, the revitalized spaces throughout southwest Topeka are a welcome development as new and expanding businesses populate the refurbished properties alongside established enterprises.

“I heard someone at a meeting say, ‘Topeka is open for business,’ and that’s the attitude that people involved with these organizations have,” he says. “City employees are like minded too.”

MARK REZAC, Partner and Retail Broker with Kansas Commercial Real Estate Services Inc., says low interest rates, tax-increment financing, and community improvement district funds are key contributors to a recent spate of economic investment from local entrepreneurs and national developers.

He credits the city manager, City Council, Joint Economic Development Organization and GO Topeka for sparking revitalization through public and private partnerships by creating a receptive environment for pitching projects. He also believes that the Greater Topeka Partnership’s Momentum 2022 initiative has further positioned Topeka as a regional draw.

“I heard someone at a meeting say, ‘Topeka is open for business,’ and that’s the attitude that people involved with these organizations have,” he says. “City employees are like minded too.”

And now that collective positivity, planning and perseverance are paying off with the potential to attract additional activity.

“As formerly blighted places come back to life and stimulate economic growth, other developers will look at our demographics and business climate and decide to invest too,” he says.

Work will be underway in August and into 2020 on Phase One of Sherwood Crossing, including replacing the roof and upgrading the strip mall’s appearance with new signage, storefronts and landscaping.

One new tenant, Big Biscuit, a popular regional Kansas City-based breakfast chain, has already signed on as a complement to the location’s existing tenants.

Fred E. Niemann IV, an attorney and director of development and acquisitions for Christie Development LLC in Overland Park, Kansas, is a principal of 29th Street Partners LLC, which was established to oversee the Sherwood Crossing project.

The shopping center currently has a 35 percent vacancy rate, resulting in deferred maintenance challenges that 29th Street Partners LLC is addressing. Nieman says removing dated Spanish architectural elements and a tower will assist with rebranding efforts to entice residents to revisit the area as new restaurants and other retailers move in.

“Our current tenants have a blend of leases, many of which are for five years or more, but we still have room to add other businesses to supplement our existing tenant lineup, whom we anticipate staying for years to come,” he says. “The former JoAnn’s fabrics space is about 10,000 square feet. If we can find a tenant that can use that much space, great, but more likely we’ll convert that space to accommodate two or three businesses.”

While exterior remodeling will be undertaken across the strip center’s entire expanse, individual businesses can have input as to how much interior work they want done or how much influence they want to exert in selecting floor and wall coverings, lighting fixtures and more.

“We may have tenants who negotiate with us to perform remodeling work themselves in exchange for lower rent or tenants who have more extensive needs they want our help with,”says Nieman. “If you own a plumbing supply company, you may want to just paint the walls and put up shelves yourself, but if you’re a chicken wing restaurant, then you might want us to install a commercial kitchen for you.”

For Niemann, the most satisfying aspect of revitalizing neglected retail areas is knowing that the effort’s impact is far-reaching.

“The businesses appreciate the boost to their bottom line and people in the community appreciate the opportunity to have more options for dining, shopping or doing other types of business,” he says. “When the project stays on track, the bank gets paid back too, so everyone involved wins.”

“Sometimes when out-of-town developers come into a community with ideas, the mood can be hostile,” says Niemann, “but Topeka’s welcomed us. The mindset is bring your skills and your capital and help us improve this part of town so we can create jobs and build our economy for the whole community.”

Niemann says that the city’s governing bodies have been receptive but still push back on some things to make sure that recipients of competitive tax-increment financing and community improvement district funds deliver on their proposals.

“Topeka has a great city management team (led by Brent Trout and Doug Gerber) and they were very supportive along the way, but there is also a lot of negotiation in order to get to a deal both sides can live with,” Niemann says. “We ask for things we don’t always get, but we understand that there’s pressure on all sides to be in lock- step and do the project right.”

PHASE TWO calls for the addition of at least one, possibly two, freestanding buildings with 20,000 to 35,000 square feet of retail space behind Kansasland Tire and Service with the store entrance facing the strip center, similar to Crosswind Commons (where JoAnn Fabrics relocated) and also to the north of the existing shopping center.

Depending on the company’s leasing reports, Niemann says work on Phase Two would ideally begin in late 2020 and conclude in 2021.

“We’re motivated to see Phase Two implemented because of the financing agreement we received from the City of Topeka,” he says, “but we’re also motivated because we want to see patches of grass turn into businesses that generate jobs and payroll and sales taxes. That’s good for the community and everyone involved.”

Advisors Excel, with more than 600 employees, has already expanded beyond the capacity of its main campus at 29th Street and Fairlawn Road with about 50 IT employees occupying space in the Tallgrass Office Building. Anticipating continued growth for the innovative financial services marketing company, co-founder Cody Foster and his team evaluated several scenarios during the past year before deciding to re-purpose Gage Center as its satellite site.

The team initially considered renovating new space that would keep the workforce under one roof to facilitate communication and preserve corporate culture but ultimately decided on a model that could potentially encompass multiple spaces and campuses throughout the city.

“We saw a lot of eyesores in Topeka that had good bones but just needed some love and attention,” he says. “By renovating existing structures to meet our growing business needs, we realized we could also address the aesthetics of run- down, high-traffic areas and make the city look better.”

“By renovating existing structures to meet our growing business needs, we realized we could also address the aesthetics of run-down, high-traffic areas and make the city look better.” — Cody Foster, Co-Founder Advisors Excel

Advisors Excel purchased the entire center with the exception of the first building on the corner of the largest strip of stores. Demolition work on two office buildings will begin in late August or early September with staff moves for its annuity operations, finance and IT teams, about 200 people, slated to begin in late 2019 or early 2020.

Foster says part of the center’s appeal for Advisors Excel is the available area in which to replicate services enjoyed by staff at the main campus, including a gym and a food services concept. Although plans are still in flux, Foster says the former Bullfrog’s Live location could be converted into co-working space with multiple meeting rooms for Advisors Excel staff from both locations to use.

One of the first Gage Center developments to benefit Advisors Excel staff and their family members is a company collaboration with Oasis Family Medicine, a full-service medical services provider that staff can access easily and immediately. Led by co-owners Jennifer Harader, M.D. and Holly Cobb, APRN-C, the clinic team includes nurse practitioners and other health care professionals available to handle everything from strep throat and sinus infections to physicals and preventative screenings.

“We’re essentially self-insured with an umbrella policy through Blue Cross Blue Shield of Kansas, and like most companies we’ve been watching rates go up dramatically the past five to seven years,” Foster says. “It’s a huge line item for us so we thought having a clinic would help us control our costs more while also providing a better experience for employees.”

Since the clinic just opened June 15, Foster says the substantial cost savings the company expects to reap won’t be realized right away, but the clinic collaboration has already resulted in other benefits.

“We’ve received several emails from employees who love how easy it is to use the clinic,” he says. “We think it will further enhance workplace satisfaction and give us a huge competitive advantage for recruiting and retaining talent.”

Foster says existing Gage Center tenants, such as Annie’s Place and Los Charros Mexican Restaurant and Cantina, have a variety of short- and long-term leases so the company won’t be proactively looking for tenants, at least initially.

“We have big growth plans, so committing space to other vendors long term past current leases isn’t something we’re exploring right now,” he says.

The former Kmart complex on the southeast corner of S.W. 17th Street and Wanamaker Road will soon be home to five businesses, three of which may be open in time for holiday shopping. Ulta Beauty, Petco, and Five Below, a discount store targeted at teens and tweens with all merchandise priced at $5 or less, will get possession of their new spaces in August. In early 2020, Old Navy and DSW, which sells brand-name footwear and accessories at a discount, will begin interior work on their stores.

Once completed, the $31.4 million project will feature 228,000 square feet of leased space with another 35,000 square feet of empty space in the back of the Kmart building. Slumberland, a longtime tenant in the strip mall, will remain in its location, as will Hobby Lobby and Bed, Bath and Beyond in the adjacent area. Although their facades will not change, the tenants will benefit from upgrades to the parking lot, exterior lighting features and landscaping.

Equity Investment Group, a Fort Wayne, Indiana, company, purchased the property in April 2014—its first in Topeka.

“… without exception, the people we worked with here have been as reasonable and responsive and quick to make decisions as we’ve seen anywhere else in the country,” … “They’re interested in trying to make things happen.” —Bob Sutton, Principal and Chief Investment Officer Equity Investment Group

Bob Sutton, principal and chief investment officer, says the company recognized potential in the complex’s proximity to other retail establishments and prime visibility along Wanamaker Road.

“We didn’t think Kmart would stay long term as a tenant, but we were surprised that the store closed in November of that year right before the holiday season,” he says.

Shortly after Kmart’s closure, EIG worked with Darland Construction, based in Overland Park, Kansas, on plans to renovate the structure, secured permits for signage and landscaping, negotiated leases, and tended to myriad other details.

“With construction, things take as long as they’re going to take, but without exception, the people we worked with here have been as reasonable and responsive and quick to make decisions as we’ve seen anywhere else in the country,” he says. “They’re interested in trying to make things happen.”

At a public hearing in April 2016, governing body members of the Joint Economic Development Organization voted unanimously to establish the complex as a community improvement district, enabling EIG to levy a 1 percent sales tax upon customers in addition to the sales taxes they already pay to help the company cover redevelopment costs.

Sutton says the company had hoped to have new stores open for business nine months ago, but as consumers shift toward online shopping, retailers have become more cautious about their footprint commitments.

“It’s gratifying to take an unattractive, vacant big box space and turn it into a productive place with new businesses serving the community.” —Bob Sutton, Principal and Chief Investment Officer Equity Investment Group

“We decided to be patient and more selective to make sure we got the right mix of tenants and we’re happy we did,” he says. “It’s gratifying to take an unattractive, vacant big box space and turn it into a productive place with new businesses serving the community. We take a lot of pride in our ownership of an area and seeing this project come together is a positive thing for us and the city too.”

“I’ve always thought investing in Topeka was a good idea, especially since the city is the state capital.”

—Jim Klausman Partner Midwest Health

Property located at the corner of 29th Street and Fairlawn Road, once home to a dilapidated, dormant hotel and a couple of meh strip malls, is undergoing arguably the biggest makeover in the city with a $100 million mixed-use development. By the end of the summer, the 14.7 acre site will welcome customers to Johnny’s Tavern, a popular regional sports bar; spin PIZZA!, a specialty artisan pizza chain restaurant; and PT’s Coffee with a drive-through option.

This fall, Spring Hill Suites by Mariott, will begin construction to accommodate overnight guests, and in November, B&B theatres will open with nine screens, reclining seats, DOLBY surround sound, a restaurant and a bar for an elevated entertainment experience. The 28th Street entrance will feature a water fountain. Plans for Phase II of Wheatfield Village include a 178-unit upscale apartment complex with a parking garage.

Business partners Jim Klausman and Butch Eaton purchased the property five years ago primarily because of its location but also out of a serendipitous, nostalgic, affinity for the area since one of their early offices was housed in a strip mall there 33 years ago.

In 1977, the two established Midwest Health, a senior living company, and eventually expanded into commercial development initiatives in Topeka and other communities. Their latest venture is adjacent to the interstate on one side and to the Shunga Trail’s lush woods on the other, providing both convenient access and a green space complement to the complex.

The city had wanted to build a $500,000 bridge to connect the trail to the north side of the creek, but instead the developer was able to dedicate land for the trail’s expansion, negating the need for the expense.

“It’s great for the city and great for us because it’s a beautiful space and we want to encourage people who are walking or biking along the trail to stop and enjoy our outstanding restaurants and other amenities,” says Klausman.

“Jim and Butch’s vision or Wheatfield Village and the investment behind it is something the city hasn’t seen for years, and we’ve been fortunate to have the financial backing to make it happen,” says Jennifer Sourk, Midwest Health’s general counsel.

Sourk credits the project’s approval for tax incremental financing and community investment district funds for ensuring construction could begin.

Angela Broxterman, vice president of real estate, agrees. “We worked with many city departments daily and it was a team-oriented process that really worked well. We needed a lot of cooperation, not just from the city but from the public too, to make this project happen and we got it. It’s been an excellent experience.”

One extensive collaboration with the city entailed widening streets and installing a new traffic light at 28th Street in addition to other improvements to enhance access to and from the entertainment district.

Sourk recently hosted friends who attended Washburn University with her and who now live in Hong Kong. “I gave them a tour of the site, and we reminisced about how we’d hung out at the pool hall and the bowling alley that were once there,” she says. “They were amazed at the corner’s transformation. I think the visual impact of Wheatfield Village and the things it will offer the community will be something that Topekans will be proud of.

Klausman, who has been integrally involved in downtown redevelopment too, says,

“I’ve always thought investing in Topeka was a good idea, especially since the city is the state capital. The community went through a rough economic period, but now people are feeling more optimistic and a number of them are realizing that there are opportunities to step up and collaboratively move the city forward. It’s a lot of being in the right place at the right time.”