I-240 corridor shifts business center

Journal Record, The (Oklahoma City), Aug 23, 2002 by Matt Maile The Journal Record

Drive along Interstate 240 east of Western Avenue in Oklahoma City and motorists can easily see a transformation taking shape. New retail business is developing where once vacant buildings and undeveloped land dotted the roadside.

Real estate professionals say the I-240 corridor is experiencing a shift in its business center. Big-box retailers like Wal-Mart Stores and Ultimate Electronics have located along Santa Fe Avenue near an existing Lowe's Home Improvement store, while retail growth further to the west, near Pennsylvania Avenue, has softened. Along with the shift, smaller retailers are expected to follow.

"The I-240 business center is transitioning from the area around Pennsylvania toward the east, toward Santa Fe, and that is because of Wal-Mart and Lowe's," said Mark Inman, an associate in the retail properties group at CB Richard Ellis/Oklahoma. "The movement is going away from Penn."

Other real estate professionals say anyplace along I-240 in south Oklahoma City remains a strong site for retail development. The focus of new development, however, has shifted toward Interstate 35.

Wal-Mart Stores had a big role in the move, Inman said. The retailer this year relocated its only store along I-240 from a site between Pennsylvania and Western avenues eastward to a new supercenter at I-240 and Santa Fe.

The new Wal-Mart Super-center sits beside an existing Lowe's Home Improvement retailer, forming a powerful new business center in south Oklahoma City. In front of Lowe's, a new Chili's restaurant opened its doors this year.

Inman said he is representing owners of three land parcels immediately to the west of the Lowe's property -- retail and commercial land that he said is prime development space. The three parcels, which are zoned C-3, total 16.6 acres.

Signs of economic growth along I-240 come not only from Wal-Mart but also from other retail expansions.

A block to the west of Wal-Mart, Academy Sports & Outdoors, the Katy, Texas-based sporting goods retailer, is renovating 80,000 square feet of leased retail space at 7700 S. Walker Ave., at the southeast intersection with I-240. The building was once a Builder's Square facility and has been vacant for many years.

David Gochman, president of Academy, said the decision to open the I-240 location was the culmination of seven years of site selection work. The company has locations in north Oklahoma City and in Edmond but wanted to expand its reach in the metro market.

"We're very excited about it," Gochman said.

Academy's store will be a subdivided portion of the 105,920- square-foot existing building. Gochman said he also plans to lease about 20,000 square feet of a former garden center for use as a display area for Academy's boat inventory.

The five-year lease for the property includes options that could allow renewals for another 20 years.

Marc Weinmeister, a senior associate in the retail services division at Grubb & Ellis/Beffort Brooks Hogan, said the area of I- 240 west of Shields had never fully developed its retail potential. That condition may be changing now.

"It's a corridor whose east side was weak for a long time," Weinmeister said. "What you're seeing now is a re-establishment of that area."

"That's a very essential trade corridor."

Weinmeister said the area of I-240 near Pennsylvania will still be an attractive area for retail, largely because of the heavy residential density in the area and the access provided by the highway. That area will eventually fill in the gaps created by the departure of stores like the former stand-alone Wal-Mart building and vacant space at the Walnut Square Shopping Center on Pennsylvania vacated by Service Merchandise and a Homeland grocer.

Wal-Mart's new supercenter location at I-240 and Santa Fe, however, is helping to re-invigorate retail development there.

"Wal-Mart is its own source of gravity," Weinmeister said. "It draws retail trade toward it. I think that with Wal-Mart there and other retailers, you're going to begin to see more of a retail concentration there."

David Todd, chairman of the board of the South Oklahoma City Chamber of Commerce, said the chamber is preparing new marketing materials that will promote the I-240 corridor to prospective landowners and retailers. The materials are expected to include a pamphlet with demographic trends about the I-240 area.

"One of the focuses of the chamber is that corridor," Todd said from his office recently. "I would like to see some more retail and some more restaurants come to this area."

Todd said the corridor has a lot of traffic and the necessary residential development to support new retail development along the route. He said the chamber has some obstacles to bringing new business to the area, however, including debunking the perception that the south side of Oklahoma City is the "poor part of town."

The number of vacant so-called big-box retail spaces along the corridor remains a big concern for the area chamber. Despite Academy's plans to move into one vacant big box, two other shopping centers lost major retailers. In addition to Service Merchandise's departure from Walnut Square, Kmart's closure of a store left another empty big box in Shields Plaza. And, of course, Wal-Mart's move to its new supercenter also left vacant space at I-240 between Western and Pennsylvania.