Wal-Mart seen as win-win
Sunday, April 29, 2007
News staff writer
Local retail developers and a downtown development advocate say Wal-Mart's plan to build a Supercenter on a former industrial site in Titusville is a good idea that makes economic sense for the Birmingham neighborhood and the nearby city center.
Bryan Holt, vice president for Retail Specialists Inc., and Hugo Isom, a partner with The Shopping Center Group, make a living helping major retailers choose successful sites.
And while Operation New Birmingham has taken no official position on Wal-Mart's plans, ONB President Michael Calvert said the retailer would be a significant amenity for people who live and work downtown, where there has been little retail development in years.
On Wednesday, the board of the Jefferson County Economic and Industrial Development Authority will consider Wal-Mart's offer for the land. Some elected leaders have spoken out against the proposal, saying Wal-Mart is a short-sighted use for the Trinity site.
But Holt said he believes Wal-Mart is the best use for the site, unless there is an industrial use similar to a Honda plant, but that is not what residents want and need.
Such an industrial use would likely require significant public incentives, he said. Wal-Mart is not asking for incentives and its offer includes $1 million for neighborhood enhancements.
"That is a fantastic windfall for the city of Birmingham and that neighborhood," Holt said, adding that he believes Wal-Mart will draw additional development in a shadow anchor center. "They'll line up like they do next to every Wal-Mart."
Upscale shops possible?
As for the Trinity site's chances of attracting upscale retailers, Holt is doubtful. For major retailers entering the Birmingham market, the top three options are the area around Hoover's Riverchase Galleria, the area around U.S. 280 and The Summit, and Trussville, he said.
Those are the top three options because of a variety of factors, including high median incomes, access, visibility and synergy, which means there already is a built-in shopping center base.
In Titusville, where grocery stores have closed, the synergy would have to be created from scratch, Holt said.
"In my mind, there is zero chance of attracting upscale retailers there, because you have other options in Birmingham," he said.
Isom said retailers base decisions about locations on facts, such as demographics, as well as shopping and traffic patterns.
"In the end analysis, facts don't lie," he said.
So, looking at Wal-Mart's proposal with that same objective perspective, Isom said the retailer is a good thing for Titusville, because it creates opportunities for jobs and sales tax revenue on a site that has been empty for years.
"I think it's a great opportunity for the city and the community of Titusville," he said. "People who live there will work there and shop there. Moreover, it's going to serve as a regional draw for people who live on Southside."
Eyes once on Southside
With ONB's help, Wal-Mart originally looked at downtown, particularly Southside, for its plans, Calvert said. But they had problems assembling a site large enough to accommodate a Supercenter because it would have required cutting off streets, some of which are heavily-traveled.
Calvert said he assumes Wal-Mart is interesting in penetrating the downtown market, which has a growing number of loft residents as well as some 80,000 people who work in the city center.
While downtown has had some retail development, it would be dwarfed by the amount of investment Wal-Mart is eyeing at the Trinity site, Calvert said.
According to an economic impact analysis done by the authority, Wal-Mart plans to spend $15 million in construction on the site, on top of an unspecified offer for the land. The analysis projects 400 new jobs and $85 million in annual sales, with a combined $4.7 million annual economic impact for the city and county.
An adjacent 17 acres could be developed for retail or other mixed-use.
David Fleming, executive director of Main Street Birmingham, which promotes neighborhood commercial districts, said a development the size of Wal-Mart's plans has not been proposed in Titusville in several decades.
Median income for the zip code surrounding the Trinity site is $25,310, according to U.S. Census Bureau statistics from 1999, the latest year available.
Elsewhere, median income tops $60,000 in the areas surrounding The Summit and Colonial Pinnacle at Tutwiler Farm in Trussville, and it reaches nearly $70,000 around the Galleria.
Wednesday will mark the authority board's first opportunity to discuss the terms of Wal-Mart's offer. Any agreed-upon contract must still be presented to Wal-Mart's real estate committee for approval.
Jefferson County Commissioner Shelia Smoot and Birmingham City Councilman Steven Hoyt have spoken out against the proposal, questioning the authority's marketing of the site and saying it could attract something better than Wal-Mart.
Jeffrey Bayer, founder and principal of Bayer Properties LLC, developer of The Summit, said there is a simple solution to the controversy: an objective study done by professionals that will show what will be successful on the Trinity site.
But the key, Bayer said, is for people to listen to the professionals' work and take the emotion out of the process.
The work would be based on demographics, such as age, income and employment, and psychographics, which are lifestyle characteristics.
"Retailers look at demographics and psychographics, and they don't lie," he said.
They are not involved in the Wal-Mart project, but see a winning formula in the proposed deal for the 27-acre former Trinity Steel site.