Norman sees boom in development

By Darren Currin
The Journal Record
8/20/2004

Over the past several weeks, Norman's economic development efforts have been thrust into the spotlight as a result of the city's friendly competition with Oklahoma City to lure the customer care center that Dell Computer intends to build somewhere in the metro area.

During that time, both communities have talked about what each has to offer companies looking to expand into the area. To Judy Hatfield, president of Norman-based Equity Realty, the dialogue over what Norman has to offer is not just talk and she adds that the city has a story of growth and stability to tell.

"The activity in Norman is just phenomenal," she said. "I would say as we approach football season and continue to have a very favorable ranking, there will be certainly a lot of attention coming to Norman because people want a piece of that sizzle."

According to Don Wood, executive director of the Norman Economic Development Coalition, there are some interesting developments that are taking place in the suburb not just in terms of real estate opportunities, but with the city's corporate base as well.

He said one of the most notable occurrences of the past few months was the announcement of Saxon Publishers' acquisition by Texas-based Harcourt Achieve, resulting in a relocation of Saxon's operations from its 130,000-square-foot warehouse and 60,000-square-foot corporate headquarters. While the initial loss of the company is not good news for Norman, Wood said the exit of Saxon does present the city with an opportunity to market a first-class facility that is in the midst of a tight commercial real estate market.

"The bad news is we are losing those jobs," Wood said. "The good news is that we've got some properties that normally would not be available in our market. We have received several inquiries about those properties, and I think they will move fairly quickly."

Hatfield also confirmed that there has been strong interest in the Saxon properties that are located along Hwy. 9 in southeast Norman near the U.S. Postal Service's training facility. In addition to its facilities, Saxon also has an adjoining 50 acres that is being marketed for sale.

Another corporation located along Hwy. 9 is also making news. The fast-growing Yamanouchi Pharmaceuticals recently announced it sold the Shaklee product line of pharmaceuticals. While the company will continue to produce Shaklee products for 30 months, Wood said Yamanouchi intends to grow into those vacant Shaklee jobs over the next several years.

"There is a potential that those Shaklee jobs could be relocated," Wood said. "The net effect to the community would be positive or neutral at worst. We are attempting to meet with the people that bought Shaklee to try to talk to them about keeping production in Norman."

Furthermore, the University of Oklahoma's construction of Stephenson Research and Technology Center is also aiding in Hwy. 9's growing reputation as being one of the most active business corridors in Norman. The anchor to the university's development in the area is its research campus that currently consists of 400,000 square feet of space with an additional 1 million square feet under construction.

The 250,000-square-foot National Weather Center is one of the crown jewels of the research park, according to Wood. The south portion of the campus, which is dedicated for corporate tenants, landed its first big company last year in the form of Weather News, whose facility will be completed this fall.

"That's exciting news because (Weather News) is bringing all the jobs related to their corporation from California to Norman," Wood said.

Additionally, Norman officials are confident that OU's commitment to weather research in the research park will provide a tremendous opportunity for the city to market itself as the weather capital of the nation.

"There is an awful lot of effort going into recruiting and supporting the weather industry in Norman, and that's going to grow as the Weather Center gets completed and Weather News gets up and running … you are going to see synergies with that," Wood said. "People are starting to realize that if they want to be involved in the weather industry, Norman is the place that they have to be to have a presence."

In addition to the construction taking place at the research park, another significant construction project under way in the suburb is Albon Engineering's 200,000-square-foot facility in the Norman Business Park. The company, which specializes in the production of connecting rods for the diesel engine industry, plans to have the facility operational by next summer with 200 employees.

Out of the four major commercial real estate products types, Hatfield said the strongest in Norman is retail; however, the market has become so robust that it has created a slight problem as well. Because the suburb boasts one of the highest retail occupancies in the entire metro area, there is little space left for new and expanding retailers.

"We have got more retailers than we can handle and we are actually out of inventory on the west side of town," she said. "There is a waiting list (for retailers) and we are trying to figure out creative ways to have retail space."

Consequently, Hatfield said the city must seriously look at the possibilities of redeveloping older, existing properties in Norman.

"We are working on rezoning and redefining existing properties," she said.

Additionally, Wood said the lack of space is not limited to the retail market, but is also evident in the office and industrial sectors as well. Which is why he said when properties like the Saxon facilities do become available, it can be a positive for the market.

However, some relief may soon be in sight in terms of creating new retail space. Plans are under way to develop a large power shopping center along Interstate 35 between Robinson Street and Tecumseh Avenue on approximately 550 acres. Price Edwards & Co. is aiding in the site's development. The land is owned by the University Foundation.

"That's very prime development property that has tremendous potential for the community," Wood said.

Hatfield said a prime example of the strength of Norman's retail market is the resurgence of the Campus Corner district located just north of the OU campus. In just the past few years, the district has transformed from a struggling retail area to one of the city's hot spots featuring such popular eateries as Bob Stoops' Louie's. Construction is also nearing completion on WWLS sports radio personality Al Eschbach's sports restaurant also located in Campus Corner.

On game days during the upcoming OU football season, Hatfield said Campus Corner will be one of the most popular places to visit for both students and visitors.

According to Hatfield, the softest property type in Norman is office due to the fact that the low interest rates have spurred several companies to vacate multi-tenant buildings in favor of buying or building their own facility.

Mike Buhl, president of Norman-based Commercial Realty Resources Group, said Norman is also leading the metro area in terms of new apartment construction. He said construction of more than 1,200 units is under way in the suburb geared for OU students. Projects include the 192-unit Campus Lodge Apartments and the 400-unit Reserve on Stinson.

In addition, Buhl said Norman is seeing an influx of new duplex development as well.

In looking to the future of commercial and economic development for Norman, Wood said the city has positioned itself well for new opportunities, but still faces challenges it must overcome.

One challenge in particular may soon be highlighted as a result of the city's effort to land the Dell customer care center. In order to attract Dell and compete with Oklahoma City, Wood said the city must offer incentives, which is something Norman has not historically done.

"We have not offered incentives as a community before and that has to change," he said. "We are going to have to have a dialogue in the community about incentives and the Dell project will bring that to the forefront. Projects like Dell are going to require community support in the form of incentives."

He said that it is important for city leaders and stakeholders to have a dialogue about the best way Norman can find the balance between growing quality companies and protecting the tax base of the community. However, Wood said that because Norman has been cautious about offering incentives, the city has not "written any checks that our kids are going to pay for."

Because there are so many diverse interest groups in Norman, Wood said it's important these groups all engage in such dialogues so that everyone can be on the same page in order to ensure future successes for Norman.

"You are not going to be able to stop Norman from growing," he said. "The future of Norman is not in older people. It's in the people that are raising families here in the community and will be here over the next 30 to 40 years. That's the people that ought to be involved in the dialogue and putting their stamp on where Norman goes in the future."