For the first time in two years, a developer is constructing a building in Johnson County that will be ready for a business to move in.
The Peterson Co. plans to spend $5.3 million to erect a 132,000-square-foot building in Greenwood because of a growing need for shell buildings where the inside is left undeveloped, allowing a business to build the interior walls, ceiling and floors based on its needs.
This week, the Greenwood City Council approved 6-1 a 10-year tax break on the building, which could someday be home to a light industrial or manufacturing company.
That is exactly the type of business city officials want on the east side of Interstate 65, which is why they wanted to offer the tax break even before the developer finds a tenant.
The Johnson County Development Corp. President and CEO Cheryl Morphew said building a facility without knowing who will occupy it is not a risk, and Johnson County communities need these types of buildings.
Companies that are relocating aren’t looking for land to build on, she said, they’re looking for buildings that are ready move into.
Morphew said the development corporation regularly takes calls from businesses that are looking at the Greenwood or Franklin area for potential relocation, and they ask for available buildings to move into. And each month, she hears about lost opportunities because the county doesn’t have these buildings, she said.
“The speed of business is faster today than it ever has been and many companies cannot wait on new construction. They don’t have time to build,” Morphew said.
“If they can find an existing flexible shell building that allows them to build out to their specifications, which reduces the project timeline, that’s a huge benefit.”
The Peterson Co. is erecting the building on a speculative basis, which means there is no commitment from a company to move in. But the building will have a lot of flexibility to accommodate multiple types of companies, company Chief Operating Officer Larry Siegler said.
More than 10 years ago, multiple speculative buildings were constructed in Greenwood. But that development ended during the recession. Instead, local governments stepped in to help pay to construct shell buildings, with the goal of attracting a new business. Franklin recently built a shell building that was purchased by Hetsco Inc. in 2013, and Greenwood was considering building one of its own last year.
But the city is not planning to invest any cash in this new building and is offering only the tax break, Greenwood Mayor Mark Myers said.
The new speculative building will be built on Gerdt Court in the Precedent South Business Center, near Main Street and Interstate 65. The Peterson Co. also built the buildings that house Nestle Waters, Poynter and Mays Chemical in the same business center.
The new building would be the first developed in the business center in almost two years.
Myers and city officials want to see light industrial and manufacturing development companies that bring plenty of jobs and salaries at or above the county average wage of $16.52 on the east side of Interstate 65.
A shell building will be more attractive to a company wanting to relocate or expand, Myers said. Businesses that look at Greenwood won’t have to wait because this building will be ready, he said.
“We only have one empty shell building right now, but we get calls. We see a need on the market for buildings this size. And the majority of the types of companies that occupy them are more of a light industrial or manufacturer,” Myers said.
“The abatement helps the city and The Peterson Company. The builder can sell the building quicker, and it helps bring more to the city’s economy.”
The abatement also helps The Peterson Co. gain an edge on other speculative buildings in other cities that prospective companies may be considering, Siegler said. Without the abatement, the company wouldn’t have built in Greenwood, Myers said.
The Peterson Co. will have a group of commercial real estate agents work to lease or sell the building after the shell is built. And the group will seek a tenant with the desired type of development and companies the city has in mind, Siegler said.
Once a company moves in, the city can collect taxes on personal and business property used at the site. More tax abatements could be added.
Siegler said construction could take from six to 12 months with hopes of breaking ground early next summer.
The could be used by one tenant or it could be split in half, potentially welcoming two companies to Greenwood, Morphew said.
Getting more speculative buildings constructed is a goal, Morphew said. She envisions mixed-use buildings of about 75,000 square feet in Greenwood, where two or three companies can share the facility.
In Franklin, expandable buildings used for manufacturing or food processing would be ideal, Morphew said. Shell or speculative buildings with 150,000 square feet and room to add 100,000 square feet are what she has been discussing with city officials, she said.
“We talk with the city of Greenwood and Franklin about additional building inventory. If they want to be competitive, they need to have shell buildings,” Morphew said. “And a win in one community is a win for all of us.”