Springfield, area leaders expect major investment in 2019

Area counties saw several big projects come to life last year after heavy permit values in 2017, and local experts expect this year to be another high dollar year for local developers.

The value of commercial permits is a signal of the amount of investment in the region, but those numbers can vary greatly from year to year. Even in a healthy economy with increased consumer spending and growing development, 2018 didn’t reach the same permit levels as 2017.

Nearly $30 million in new projects were started in 2017 in Springfield, down to $16.8 million in 2018. But much of the investment and construction on permits spilled over into the next year as major projects can take years to complete.

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"Just because you see the number and the valuation down in 2018 does not mean necessarily that the economy was down," said Horton Hobbs, vice president of economic development. "It just means the timing may have been in 2017 when the permits were filed."

In 2017, the city pulled 519 permits, but it pulled nearly triple that number at 1,533 last year, despite the sharp decline in total valuation. During a healthy economy, there’s typically an uptick in activity, but it doesn’t always translate to dollar value, he said.

"Depending on the types of expansion , they may have a little bit less valuation necessarily than a new construction, s o I think it's really the type of investment versus the volume," Hobbs said.

Instead of high dollar new construction, 2018 was full of several smaller permits like remodels at Walmart and Kroger, leading to the large number of permits despite lower values.

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The economy saw strong growth in 2017 and many businesses began investing money in the Miami Valley, including Clark and Champaign counties.

“They had the extra funding or whatever was needed, so they took advantage of it in that year,” Jene Gaver, Springfield’s chief building official.

Several big projects boosted values across the region, including Wittenberg’s $40 million indoor athletic facility and Topre’s $55 million expansion in Springfield.

In Champaign County, more than $70 million in permits were filed in 2017 including Navistar’s $12 million manufacturing warehouse, a new Memorial Health facility, renovations on a new ColePak building and additions at KTH Parts Industries and Weidmann Electrical Technology, said Marcia Bailey, economic development director for the Champaign Economic Partnership.

In 2018, Champaign’s permits dropped to $2.6 million in valuation.

“It’s just that the big projects did happen in ‘17 with openings in ‘18 and then for ‘18 we didn’t really have major projects going on, but I think we’re going to see more permits this year again,” said Bailey.

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Looking into 2019

Springfield leaders echoed Bailey’s optimism, with Gaver saying he expects 2019 to outpace 2017. In 2018. the permits were smaller sprinkler, fire alarm and mechanical permits that followed the major construction values of 2017.

“It’s just timing, honestly. I project that in 2019 we’re going to see an uptick because there are a couple of bigger projects that are continuing into 2019,” Hobbs said.

Last year, Topre announced plans of another $73 million expansion. Along with the growth comes 138,000 square feet and 204 jobs at the Champion City Business Park. Topre has had back-to-back expansions since it first built in the city in late 2016.

Silfex also plans to finish its $223 million facility in 2019. When complete, the project will add 400 total jobs to Springfield.

A major housing development near the Tuttle Road Walmart could bring 226 new homes as well. Construction could begin as early as March or April on the 37 acres with homes meant to handle increased hiring in the region.

Other projects include a second phase to senior housing Community Gardens and a $5.5 million parking garage with funds from the state, county and city.

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“There’s a lot of stuff going on . I mean , it’s just we’re constantly busy,” Gaver said.

Local investors in Champaign County are working on a proposal for a new Cobblestone hotel in Urbana. Mercy Hospital in Urbana is also continuing facade changes.

A potential downtown project could turn an Urbana building, along with North and South Elementary schools, into affordable senior housing. If that project develops, it could redevelop a longtime eyesore downtown, find a new use for two of the school district’s aging buildings and provide more senior housing options for residents.

“If we see this hotel start being built , we’re hoping that’s going to spur more activity along that same corridor,” Bailey said.

How development impacts Springfield

Higher permit values are a good thing because they often represent more real estate taxes. Many of the big values that received incentives are about to expire, so the counties could pull more taxes, Bailey said. But it’s also a tradeoff because some new projects could also receive incentives.

“If you’ve got these high permits, usually it means you’ve got manufacturing coming in,” Gaver said. “When manufacturing comes in, it means more people; more people means more housing, so it just kind of trickles down.”

When commercial is up, usually residential is down and vice versa, but Hobbs said he expects both the be up in 2019 when hundreds of jobs could come to Springfield.

"The more money that's generated here in the city of Springfield , the more people to come in here and spend money , the more places will be open up and survive," Gaver said.

Even though permit values didn’t have high dollar values in 2018, it doesn’t mean the companies weren’t expanding and improving, Hobbs said.

“There is investment that goes on in companies that may not actually require the point of a permit , but that doesn’t mean that they’re not investing in , you know , infrastructure or they’re not investing in equipment or those kinds of things,” he said.

Clark County, which has its own building department had $14.6 million invested in permits last year, down slightly from the $15 million in 2017.

Parts of the planned $43 million Speedway expansion could also show up 2019 permits, boosting those values. The expansion could bring 200 new full-time workers over the next few years.