story by Rose Ann Pearce
rapearce@thecitywire.com
A new multi-million dollar retail and office multi-story development on South Walton Boulevard could be a catalyst for redevelopment of businesses on both ends of the major thoroughfare through the city.
The Bentonville Planning Commission last week approved plans for a six-story retail and office building, called the 8W Center, to be constructed across the street from the Wal-Mart home office. The proposed building at the southeast corner of South Walton and Southwest Eighth Street is seen as a redefinition of the intersection.
The development is an 180,000-square-foot building and adjacent parking deck with 180 parking spaces. The city has not yet received info what what the proposed structure will cost to build. Based on per square foot building permit values of other class A office space built in Northwest Arkansas in recent years, the cost to build could be around $15 million, not including the parking deck. Also, that cost does not include furnishings.
The bottom floor will be set aside for retail and restaurant space, totaling 80,000 square feet, and the top five floors will be office space, according to the plan approved by the city. Plans include a brick patio with benches on the proposed 20-foot-wide utility easement along South Walton. A 10-foot-wide concrete trail will also be built on the development's west side.
‘HUGE ENHANCEMENT’
“This is a good thing,” said Bentonville Mayor Bob McCaslin. “Those of us in Northwest Arkansas for a long time have seen that corridor go through many versions. This accentuates what we are trying to do and will be a nice example of what we want to see.”
The building now on the site houses a Jimmy John's sandwich shop. Jack Link's Beef Jerky formerly operated out of the other half of the building, which is office space. That business has moved to 1006 Beau Terre Drive, according to a sign on the door. The building is owned by Troy Link Enterprises, according to county property records. The project’s owner is identified as 8W Center LLC, a real estate investment company owned by Troy Link. Newmark Grubb Arkansas is the developer and leasing agent for the project, The company is negotiating with prospective tenants. Jimmy John's will be a tenant in the ground floor.
Construction at the 8W Center is expected to start in October with demolition and site work starting as early as September. Construction may be complete by fall 2016. Dave Grundfest Company of Little Rock is the general contractor.
Troy Galloway, Bentonville’s community and economic development director, said the new 8W Center demonstrates the community confident in what the city hopes to accomplish on North Walton Boulevard. Beau Thompson, senior planner, said the city is working to encourage redevelopment of buildings that have reached their life expectancy along the one-mile-plus stretch of North Walton Boulevard. But that’s not limited to the North Walton section.
“The 8W Center will be huge enhancement to help that corner,” said Dana Davis, president of the Bentonville-Bella Vista Chamber of Commerce.
NORTH WALTON DEVELOPMENT
The Chamber has worked with the city in pushing the North Walton Enhancement Project to encourage development from West Central Avenue north to Ridgefield Avenue along and within a block of North Walton Boulevard.
Two programs have been created to encourage the work. One is free assistance from Bentonville-based CEI Engineering to help draft a site plan for businesses within the designated enhancement project boundaries. The second is a lending program at attractive interest rates for property owners within the enhancement project, Davis said. Eight banks have created a consortium, pledging $2 million each to finance development or redevelopment.
The consortium was announced in January. So far, one project has applied for funding and has received a notice to proceed with plans so that the property owner can apply to the lending institutions for financing, Davis said. He declined to identify the project because it is too early in the project.
The funding is available until December 2017 or until the funds are depleted, he added. The program will be reviewed at that point and could be continued In other parts of the city, Davis noted.
OFFICE VACANCY RATES TO RISE
Given the close proximity to Wal-Mart’s home office and what will be a four-lane corridor that connects to Interstate 49 in north Bentonville, the 8W Center class A office space will likely have no trouble finding tenants. But given the office space already under construction in western Rogers, commercial real estate experts believe vacancy rates will rise in older spaces scattered around Bentonville.
Bentonville already has the highest office vacancy rates among the major cities in the region. The last Arvest Skyline Commercial Real Estate report released in April indicated that the office vacancy rate in Bentonville was 16.3%, compared to 13.8% for the region as a whole.
Kathy Deck, director for the Center for Business and Economic Research at the University of Arkansas, expects vacancy rates to rise in 2016. Coming in 2016 is the Hunt Ventures’ 10-story 225,000 square foot class A office building under construction at the corner of Pinnacle Hills Parkway and J.B. Hunt Drive near the Walmart AMP in Rogers. This project comes on the heels of two other large office buildings constructed in the past few years and operated by Hunt Ventures. Last year the group finished a 60,000 square foot office building near the Walmart AMP.