Editor’s note: An earlier version of this story incorrectly described Craig Simon’s role in the leasing the Winfield Building in downtown Wichita.
One of the first things newly arrived downtown developer Glenn Ferguson wants everyone to know: He’s not one of the “Minnesota Guys.”
Ferguson may be from out of town, but he has a real track record.
That sets him apart from Michael Elzufon and David Lundberg, developers from Minnesota with little experience who hit Wichita 12 years ago and bought up a bunch of downtown buildings before running into financial and legal problems.
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“As soon as I sat down people started mentioning them, and I figured out pretty quickly I didn’t want to be painted with the same brush,” Ferguson said.
But he is investing in downtown Wichita in a pretty big way. Ferguson recently bought what may be the last un-redeveloped building in Old Town, at 701 E. Second, and is close to signing a deal for the former Finney State Office Building, on William between Market and Broadway.
Ferguson, 44, has mostly done conventional apartment complexes in smaller cities in Kansas, Oklahoma, Missouri and Arkansas – he built, owns and manages about 1,000 units – so renovating older buildings for offices and restaurants in a large city’s downtown is quite different.
I was really excited by what I saw, the vibrancy of the downtown.
Glenn Ferguson on Wichita
But he calls himself opportunistic, saying he’s attracted to a wide variety of buildings and markets, and he has done renovation of older buildings in bigger cities before.
Right now he’s about to get started on a roughly $33 million renovation of the Tiffany, a 12-story, 1966 apartment building in Oklahoma City.
He bought the building in 2008 for $5.8 million in hopes of renovating it, but those plans fell through during the credit bust and recession, he said. The last few tenants moved out in recent years, and he is about to start construction.
Originally from Oregon, where he got into property management and development, he moved to Memphis where his wife is from about 12 years ago. He has a secondary office in Tulsa where he has done a lot of projects.
He said he always had Wichita in the back in the back of his mind, until last year when he came up for the first time.
“I was really excited by what I saw, the vibrancy of the downtown,” he said. “It’s got a very pro-growth attitude and people are really encouraging.”
His practice, he said, is to develop, own and manage his projects. And he’s very clear that it’s a long-term commitment.
“We anticipate being a very long-term owner,” he said.
He said he’s heard a lot about the Minnesota Guys, but said that he operates differently.
“I gather they over-promised and under-delivered,” he said. “I want to under-promise and over-deliver.”
Ferguson named the 40,000-square-foot, three-story building at 701 E. Second – just south of Old Town Square – the Winfield Building because it was built in 1910 as the warehouse for Winfield Wholesale Grocery.
He plans to cut it into spaces of between 2,000 and 12,000 square feet, with some set aside as co-working space for start ups. He will leave room for a restaurant on the first floor and restaurant/event space on the roof. It will be done by March.
“They’ve had great success renovating older buildings into restaurants and apartments, but the element it really seems to be missing is employment,” he said of Old Town. “It needs to be a live-work-play neighborhood, where people don’t have to go far.”
He paid $1.4 million for the building, which is above market price for other Old Town buildings. The cost of renovating the building will be about $5 million, he said. The entire cost of buying and redeveloping the building will be $7.5 million to $8 million.
That’s a problem in Wichita, which has some of the lowest rents in the nation.
“Candidly, that is one of the things that is a challenge,” he said. “The rents don’t support a lot of office development. But what we heard is that there was really a desire for a collaborative-type space, and that product wasn’t available.”
He’s able to make it work financially by using historic tax credits to offset about quarter of renovation costs, he said.
What we heard is that there was really a desire for a collaborative-type space, and that product wasn’t available.
Glenn Ferguson on office space in downtown Wichita
Landmark Commercial agent Craig Simon, who at one time worked for the Minnesota Guys and who represents Ferguson in leasing the building, said Ferguson is a real plus for downtown.
“He’s one of the nicest guys I’ve ever met, extremely honest and wants only what’s best for the community,” Simon said.
More to come?
Across downtown, the Finney State Office Building is a considerably larger project, almost 200,000 square feet and an estimated $30 million to $40 million.
The building’s owner, the city of Wichita’s Public Building Commission, put out a request for proposals in the spring and got just Ferguson’s.
He hasn’t yet signed the contract – it’s been hung up by the attorneys, he said – but he fully expects to.
“There’s no way we’ll not be moving forward,” he said.
He envisions the eastern building of the two-building complex as needing an eight-story atrium, which would have to be punched through the center of building. There would be a food court and eating space on the first floor underneath a vast open space and skylight.
“It’s a great way to incorporate natural light and air into the building,” he said.
Construction would start about 12 months after the contract is signed and take about nine months to complete.
Who the tenants are is still not determined, he said. It’s possible a single tenant could take the building, but more likely it will be divided up among a number of tenants, including, possibly, colleges seeking classroom space.
He said other than industrial revenue bonds to eliminate the sales tax on building materials, he expects no local government participation in the financing.