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Tulsa suburbs continue to draw economic development



TULSA - From downtown to the Arkansas River, Tulsa civic leaders have discussed all sorts of economic development prospects and potentials as April's elections draw nearer.

But current and historical data compiled by Mike Parrish and Mandy Vavrinak suggest growth will follow past developments - in the suburbs.

"Tulsa, in order to rebound from the very flat sales tax receipts that have been happening for the last couple of years, is going to have to make a significant change in how they approach economic development," said Vavrinak, the president and owner of the Tulsa consulting firm Crossroads Communications.

"I think the suburbs are doing a good job of seeking retail investment as being business-friendly, as saying 'whatever it takes to make your project successful,' and I think that makes a difference."

Parrish, the owner of Parrish Company Realtors and broker for Broken Arrow's Stone Wood Hills developments, outlined four interrelated factors - residential density, demographics, friendly regulatory environment and successful developments - to foretell where the Tulsa area's economic development would come.

Those four factors point to Owasso's U.S. Highway 169 corridor, Broken Arrow's Bass Pro Shops area, Bixby's Memorial corridor and northern edge, and Jenks' river bridge area

"They're the areas where most of the activity is," he said. "All of those factors are working in those outlying areas."

Demographics

Quoting U.S. Economic Census data, Vavrinak pointed out the suburbs have enjoyed stronger demographics and buying income for several years.

"That's not true in all areas," she said, "but in general, there's more money to spend in the suburbs than there is in the core city."

The comparisons are striking.

- Owasso, a northwest Tulsa suburb, charted 515 housing starts for 2003, '04 and '05 - with the same number projected each year for the next five to seven years. About 28 percent of the area's housing is less than six years old, and 80 percent is single-unit detached housing. From a 2005 ZIP code population of 33,458 - and a "funnel" population of 423,677 - Owasso projects 17.6-percent population growth by 2010.

The city's median housing value ended last year at $132,841. Its ZIP code median family income came in at $81,592.

- Broken Arrow housing starts jumped 28.3 percent last year to 907, with an estimated construction cost of $125 million. Despite a decade of growth, 14 percent of its housing remains less than six years old, and 85 percent is single-unit detached.

That draws from a population base of 239,363 living within a seven-mile radius of Stone Wood Hills, the center Parrish brokers and site of the Bass Pro Shops store. Of that, 70 percent of households are family households.

Broken Arrow, lying southeast of Tulsa, ended last year with a median housing value of $128,584. The median family income within a seven-mile radius: $73,813.

- Bixby, situated to the west of Broken Arrow, has recorded 1,210 new residential lot sales north of the river and in city limits since 2003. About 23 percent of the city's housing is less than six years old, and 82 percent is single-unit detached. Median household value: $175,314.

While its ZIP code population ended 2005 at 20,575, its immediate trade area population rose to 37,378 with median family income of $118,769. And that population is projected to grow 19.3 percent by 2010.

- Jenks averaged 392 housing starts for 2003, 2004 and 2005. Last year the city recorded 468, valued at $90 million, with another 475 projected for this year. About 28 percent of Jenks housing is less than six years old, and 87 percent is single-unit detached. Its median housing value: $149,411.

Jenks draws from the smallest population base of the four cities - its ZIP code census is expected to reach 15,000 soon - and its immediate trade area population totaled 39,534 last year. But its ZIP code median family income totaled $85,810 last year, with 20.7-percent population growth projected by 2010.

Developments

Speaking last week before the 2006 Tulsa Metro Commercial Market Update, Parrish pointed to successful developments in each city that promise future growth.

In Owasso, investments in the Smith Farm area project, Tyann Plaza and the Owasso Market have led to 2.5 million square feet of retail development over the last 24 months, with another 250,000 to 500,000 square feet planned over the next 18 months.

"It includes all of the areas that they consider their growth areas," Parrish said of Owasso prospects. "Now we've extended north beyond the Smith Farm development and that takes into consideration that area."

With two hospitals under construction, Owasso also foresees office market growth. Vavrinak said Rickey Hayes, director of economic development for the city, foresees "a tremendous amount of investment" in office space. That should start with medical offices serving the rising hospital market.

With Stone Wood Hills, Adams Creek and other prospects, Broken Arrow has enjoyed the construction of 336,000 square feet of commercial and retail development over the last year - with another 500,000 to 600,000 planned over the next 12 months.

One factor pushing that is "retail leakage" - the amount of retail products purchased by residents from sources outside their living area. Vavrinak said Broken Arrow suffers from $417.2 million in retail leakage, as charted by the U.S. Economic Census data.

Parrish, with personal experience guiding this, expects continued development along the Broken Arrow Expressway corridor, along with commercial/office space and manufacturing investment.

With the success of Marketplace and Bixby Commons, the city of Bixby has seen 273,646 square feet of retail and commercial development over the last two and a half years. Another 373,000 should come over the next 12 to 18 months. Supporting that growth, Vavrinak said Bixby's immediate trade area shows $226 million in retail leakage.

Parris projected continued development all along the Memorial corridor, as well as concentrated retail and commercial in northern Bixby.

As for Jenks, its celebrated RiverWalk Crossing development injected 266,000 square feet of retail and commercial development over the last 15 months. Another 182,000 square feet should sprout up over the next 12 months as RiverWalk enters phase two.

Parrish, who is contemplating development of land north of RiverWalk, expects more riverfront development to come, with pockets of commercial development within the town itself.

Besides continued strong residential growth, Vavrinak pointed to $107 million in retail leakage fueling growth in Jenks' immediate trade area.

"There are opportunities in the suburbs for land that is not as restricted as in the core city," said Vavrinak, noting how businesses have found less resistance to development in the suburbs. "You've got more opportunity to not fight those battles.

"Developers are a risk-adversive population," she said. "They don't want to undertake a project that has any risk involved."