People. People need supplies and services. The more people, the more the need for supplies and services. And who delivers supplies and services? Mostly, they come from commercial establishments that operate from commercial real estate locations.
In 1960, Conway had 9,719 residents. Now, just more than 50 years later, the number has increased to about 62,000, a more than six-fold increase. All these additional people are customers who are served by establishments housed in commercial real estate.
Commercial development in Conway today is robust. Building permits for all types of commercial, industrial and institutional buildings, excluding UCA, averaged $75 million per year in the past five years. This figure does not include the cost of the land, land improvements or infrastructure expenditures. Projects on the horizon — Central Landing, Lewis Crossing, Markham Street project, Baptist Hospital and additional restaurants — may dwarf this yearly average in the future.
Commercial real estate values depend largely on zoning classification. In Conway, there are three broad classifications: Office, commercial, and industrial. These classifications have sub categories that limit usage. For instance, commercial zoning has four subcategories: C1 central business district, C2 neighborhood commercial district, C-3 highway service and open display district and, C-4 large shopping center commercial district.
The purpose of zoning is to establish regulations that promote the general welfare of the community. Before a building permit is issued, a proposed commercial structure and its use must demonstrate adequate infrastructure, safety, environmental and aesthetic qualities and that the building/use is compatible with the neighborhood.
Today, high-dollar real estate is used for retail establishments, including restaurants. The price of the land is highly dependent on location. (The old adage that land value depends on three important factors: 1) location, 2) location and 3) location is very true.) An acre of land on East Oak Street near the Commons Shopping area will bring a much higher price than an acre on Washington Street, even though both have the same zoning classification.
A large parcel of raw undeveloped land, 10 acres or more, suitable for an auto dealership or a shopping center runs in the neighborhood of $100 to $200 thousand dollars per acre. Small parcels of commercial land on Dave Ward Drive sell for as much as $400 to $500 thousand per acre. The old airport, Cantrell Field, will become Central Landing Shopping Center. At an approximate $6,000,000 price, this 150-acre parcel sold for about $40,000 per acre. Smaller parcels are usually priced by the square foot and run between $4-$10 per square foot. In terms of acreage, this is approximately $200,000-$450,000 per acre.
Often land is not sold but leased to a developer or business that builds and maintains a facility. This can be the best of both worlds for the owner who leases for long-term usage. A lease usually contains provisions for inflation and taxes. It gives the landowner income without the headaches of maintaining a building. Also, the land can often be sold at a premium if it includes a good lease.
“Repurposing” is the current word for “renovation.” Repurposing is alive and well in Conway and has been for a long time. Conway in 1960 had an aggregate of about 10 blocks (Old Town Conway) of commercial establishments. All have been renovated and, except for a few buildings such as Farmers State Bank (First Security Bank) and Cox Drug (Baker Drug), all are now serving purposes different from what they did then.
Most existing commercial structures require considerable renovation when new businesses occupy them. Two examples are Tacos 4 Life on East Oak Street (formally Tokyo Japanese Steakhouse) and First Service Bank on Washington (formerly Mazzio’s Pizza). Both structures were essentially gutted and rebuilt. A third example is the former Dean Chevrolet dealership on East Oak Street. There have been rumors of new businesses there but each envisioned extensive renovation.
The master at repurposing industrial and commercial sites in Conway is George Covington. An example of his early work is the former Boat Works at the corner of Harrison and Garland that now houses La Huerta restaurant. Another example is the successive renovations of Conway’s first Walmart store at Garland and Markham that now houses Larry’s Pizza. This area is Covington Midtown Center and it houses businesses in addition to the two cited. This area would be a shuttered eyesore in many towns. Thanks to his vision and entrepreneurship, this area and others such as Universal Nolen (Carrier) on Harkrider, Baldwin Piano on Sturgis, United Motors at Deer and Chestnut and the former Log Cabin Democrat building on Front Street have been repurposed. Soon, the Tiffany manufacturing facility on Salem Road will join this list. In addition, the Halter building on the corner of Oak and Front Streets, acquired by the SEAY Company, developers of Conway Commons, is another example of a remodeled building that could have slipped into eyesore status in the heart of town.
The sales leader of commercial land and development is Nabholz Properties. Charles, Tom and Greg Nabholz have been selling and developing commercial land in Conway since 1983. Their developments include the medical plaza at the corner Dave Ward Drive and Nutter Chapel Road, the commercial properties along David Ward Drive, and those along Amity Road.
About 60 years ago the newly-formed Conway Development Corporation established an industrial park south of Conway. It successfully lured manufacturers such as Kimberly Clark, FMC (now Snap on Tools) and many others. The park expanded and the industries there provide many jobs and tax revenues. Nevertheless, the demand for industrial manufacturing sites has waned as several large facilities such as Nucor, Tiffany, Baldwin Piano and Ward Body Works ceased operations.
Today, commercial real estate is doing well in Conway, primarily because of the wide variety of businesses that serve the population and the supply of workers for those businesses.
I thank my friend Chris Spatz for editing and helping me with this article. You can obtain more information on the economy of Conway and Faulkner County by going to the Pulse of Conway website (www.pulseofconway.com).