The $8.4 million deal to purchase two prominent downtown buildings by a national financial institution last week may spur interest from other commercial and retail developers, real estate experts said Wednesday.
EF Hutton America purchased both the 10-story tower at 1 Main St. and the State Theater, 9-17 and 19 S. Fountain Ave., for about $8.4 million from local nonprofit SpringForward, according to property records recorded this week.
The buildings were sold to EF Hutton at the appraised values, SpringForward board member Ted Vander Roest said. The organization wrote a long-term note for EF Hutton, which will be paid back over several years, he said.
“It’s a wonderful step to keep the momentum going,” Vander Roest said.
The non-profit will use the money to fund other projects in downtown Springfield, including at some historic downtown buildings, he said.
The financial firm, which will make its headquarters in Springfield, said it will bring at least 400 jobs downtown over the next several years last week. The name of the former Credit Life Building at the corner of East Main Street and South Limestone Street was changed to EF Hutton Tower.
The company’s total investment here is projected to be about $22 million.
More than $400 million has been spent downtown on big developments over the past decade, including the new $250 million Springfield Regional Medical Center. The Bushnell Building renovation, new Ohio Valley Surgical Hospital and medical office building, Clark State Community College Hollenbeck Bayley Creative Arts and Conference Center, Mother Stewart’s Brewing Co. are other major developments.
Former building owner Jim Lagos and his wife, Nike, gave the properties as a charitable donation to SpringForward with no strings attached, Lagos said.
“(SpringForward) was the ideal vehicle because it’s sole purpose is to promote downtown Springfield,” Lagos said.
A charitable contribution can be written off for tax purposes, according to the Internal Revenue Service. A person who donates property other than cash to a qualified organization can generally deduct the fair market value of the property, according to the IRS website.
Lagos wouldn’t disclose how much he paid for the property when it was purchased in 1993 and no sales records were available at the Clark County Auditor’s Office.
Credit Life spent $7 million constructing the 154,000 square-foot-tower in 1980 and an early 1990s appraisal set the value at $14 million, according to News-Sun archives. In January of 1993, Lagos and his brother purchased the tower but didn’t have to reveal the price paid for it because it sat on land owned by another party.
“There’s been a whole lot of money (put into it). … For us, this was a good thing,” Lagos said on Wednesday. “We’re absolutely delighted to help facilitate it anyway we could.”
The property at 1 Main St. — previously known as 1 S. Limestone St. — was valued at $2 million by the Clark County Auditor’s Office.
EF Hutton’s move to Springfield will benefit every property owner in downtown, Lagos said.
“I do believe a rising tide lifts all boats,” Lagos said. “Having 400 people come (downtown) is going to be totally transformative and that’s why we did it.”
An anchor tenant in the financial services industry can lead to other businesses taking a look at Springfield, said Norton Francis, a senior research associate at the Washington, D.C.-based Urban Institute. Those skilled jobs are typically higher-paying and can bring employees who want to buy houses in the area, he said.
“The upside risk is pretty good,” Francis said. “It could change the optics of Springfield and make it more noticeable to companies who wouldn’t otherwise consider it.”
The new jobs will likely bring more developers looking to add retail to the area, said Aaron Wiens of Toledo-based Tolson Enterprises Broker/Leasing and Development.
“Those jobs are going to need to be serviced somehow between food, restaurants,” Wiens said. “They may take a look at downtown who may not have (before).”
If EF Hutton America implements its plan and executes it properly, the company will have a major spin-off effect in downtown, including adding more restaurants, meeting spaces and after hours entertainment — similar to what happened on Bechtle Avenue, said Tom Loftis, a commercial real estate developer with Midland Properties.
“Traffic is the driver of small business,” Loftis said. “Look at Bechtle Avenue, it has a lot of attractors down there. The more people who go to those attractors, each business gets a little spin-off from it. … I’m very optimistic and hopeful it will be a real turning point for the community.”