Downtown Topeka isn’t defined by Kansas Avenue.
Although significant revitalization work has been done between 10th and 6th avenues, the success of the downtown will involve a much larger area. In the past, Downtown Topeka Inc. leader Vince Frye has defined it as Topeka Boulevard east to Adams Street and then from the river to 12th Street.
In the past year, investors have begun to purchase buildings in areas off Kansas, and Frye expects to see that expansion continue.
“Downtown, as we define it, is much more than just Kansas Avenue,” Frye said. “It’s very important that the success we’ve had so far continues in other parts of that downtown area. I think we’ll just continue to see other expansion moving outward. You can’t just rely on a four-block area; it’s got to be something that is supportive of that initial investment.”
Frye pointed to the investment by Kansas Health Institute in its 212 S.W. 8th Ave. building and said he expects to see more projects like that.
“I think that’s indicative of other things that will be happening, moving outward from the core,” he said. “The city is starting to talk about 6th to the river, and there are certainly projects taking place currently for lofts and other development closer to the northern end of Kansas Avenue.”
Ken Schmanke, president and CEO of K1 Realty LLC, has been selling real estate in the Topeka market for decades. For years, when he was part of KS Commercial, a core principle was that the owners didn’t invest in commercial real estate, Schmanke said, because they didn’t compete with their customers.
“I’m kind of in the beginning of my second real estate career,” he said. “Since I’ve left there, one of my strategies was to be more active and involved in the ownership and development of real estate.”
His third purchase — after the former Outback building that now houses Panda Kitchen and a strip mall at 400 S.W. 29th St. — was a building off downtown’s main avenue.
Schmanke bought the former credit union building at 707 S.E. Quincy St. in February, his first downtown investment.
“We’re just kind of trying to slowly build,” he said. “I’m looking for other good projects as well. I try to find properties where I can add some value somehow.”
On the Quincy building, which Shawnee County appraises at $358,500, Schmanke said he’s doing mostly cosmetic work, including putting in new restrooms on the second and third floors.
“It is brand-new space,” he said, “with basically all new finishes, floors, ceilings, lights; I’m putting in brand-new, high-efficiency LED lighting.”
It’s fun to explore the history of the building as he works. It was built in 1900 by the American Legion, Schmanke said, and then in the mid-1970s, a credit union “put a new skin” on the building.
“The third floor used to be the ballroom, so it’s clear, light, open space,” he said. “For a lot of what’s going on in today’s environment with open floor plans, I think it would be well received. I’m putting in a lot of glass walls for what few walls we do have. I think the days of a lot of closed offices and long corridors are gone.”
Mike Fox, another downtown investor, has also wandered off the main avenue — although his most well-known business, The Celtic Fox, isn’t on Kansas Avenue either.
But in recent months, Fox purchased 412 S. W. Jackson St.
“It’s another one of those old buildings that needs a little care,” he said. “I’m going to put a new front on it; it needed a roof. I’m either going to flip it, or I’m going to use it as storage until I flip it.”
Fox bought the building after he retired from construction about a year ago. “I was just getting kind of bored, so I bought a building,” he said, laughing a little. “And thought I would just kind of do it as I had time. But that isn’t the way I like to do things. I’ve already got the roof done, and I’m ready to put the front on it.”
The building was what Fox termed “garbled up” by past owners, who put a “little bitty garage door in it.” He plans to leave the building’s brick and leave the upper part of it looking the same, but he will modernize the bottom, including putting in a larger garage door.
“It would be a perfect place to put a loft,” he said. “It has 1,800 square feet upstairs that has tall ceilings. The Realtor already told me he’s got some people wanting to look at it.”
Other big downtown players are scooping up properties, including Cody Foster, who bought The Columbian building and across from it, the large space at 107 S.W. 6th Ave., and Jim Klausman, who snagged 823 S..W. Quincy.
For Schmanke, the investments are building momentum downtown. But even as the buildings sell, moving forward can be tough.
“I think the biggest challenge is that the cost to renovate some of these properties and deliver them to a tenant is at odds with the rent, and the market rent that tenants are willing to pay,” Schmanke said. “So you have to be efficient in your remodeling and construction costs in order to deliver space that tenants can afford to rent.”
The downtown activity hasn’t yet affected rents significantly, although there may be properties that Schmanke called “outliers” charging more.
“But in many cases, the (high) rents don’t work,” he said. “I think the answer is somewhere in the middle. For most tenants, new construction or nearly new construction is not affordable. So I think we need to find a happy medium to efficiently remodel the existing spaces and deliver to tenants at a rate that they can afford.”
But the next step will be getting enough demand that rates will elevate to a point where major investments will be made, Schmanke said, and new space will be built.
“It’s a little bit of a struggle right now,” he said. “On a cost per square foot basis, it’s difficult to make the numbers work. I frankly bought this project (707 S.E. Quincy) at a pretty good rate and am able to spend the money necessary to deliver brand-new space at market rents.”