Due to the addition of two new counties to the Birmingham MSA, the population is expected to reach 1 million by the end of 2002. "Retail developers have recognized that the combination of population and economic growth coupled with low unemployment equals retail opportunities," says Lynn Leonard, vice president - marketing and content with NewBridge Retail Advisors.

Metro Birmingham has become an automotive manufacturing hub, with Mercedes, Honda, Fiat, Hyundai, Toyota and Navistar all locating and/or expanding manufacturing plants within 85 miles of the city.

Birmingham is a major U.S. banking center, with four of the nation's top 50 largest banking institutions -- AmSouth, Regions, SouthTrust and Compass -- located there. Acquisition and consolidation in the banking industry have brought jobs and residents to Birmingham, fueling the city's growth.

Healthcare is also a major sector of Birmingham's economy. Six of the top 25 employers in Birmingham are healthcare organizations. This economic strength has led to an unemployment rate of only 3.7 percent, which has fostered residential and commercial growth.

The growth of Birmingham's southern suburbs has increased commuting patterns and retail opportunities. The success of The Summit, Bayer Properties' 600,000-square-foot lifestyle center located on the city's east side, has inspired a variety of nontraditional retail developments along the U.S. Highway 280 Corridor. Shopping patterns have polarized, as illustrated by the success of several high-end shopping developments, including the development of Watermark Place, a new outlet shopping center on the west side of Birmingham.

"Birmingham has not experienced the economic slump that many U.S. markets have been dealing with since the events of September 11," Leonard says. "Five new major retail developments are currently underway. Retailers, attracted by strong residential and economic growth, are entering and expanding within the market. With six interstate routes converging in Birmingham, access and connectivity will support continued retail growth."

EBSCO Properties is developing Tattersall Park, a 1.4 million-square-foot mixed-use project in Hoover, a suburb southeast of Birmingham. Located at the intersection of U.S. Highway 280 and State Route 119, the project is expected to include office, residential and retail development on 78 acres in a 1940s streetscape theme.

AIG Baker is developing Patton Creek Center, a 600,000-square-foot lifestyle center in Hoover, just west of the Riverchase Galleria. Scheduled to open in 2003, the project is expected to have six distinct shopping areas. AIG Baker is also developing Hayes Market Place, a 750,000-square-foot lifestyle center in Pellam, south of the city. The development is expected to be similar to The Summit and will open this fall.

To underscore the success of The Summit, which first opened in 1997, Bayer Properties recently added Phases II and III to the center. The addition, which includes Saks Fifth Avenue, brings the total square footage of the center to 800,000 square feet.

Brookwood Village, now called Colonial Brookwood Village, is undergoing a $50 million renovation/expansion. Colonial Properties Trust owns the center, located in Homewood at the intersection of highways 38 and 149.

Colonial Properties Trust recently developed two of the most notable centers in Birmingham: Colonial Promenade Tutwiler Farm and Colonial Promenade Trussville. Tutwiler Farm, located northeast of Birmingham at the intersection of Interstate 459 and U.S. Highway 11, is a 516,814-square-foot power center anchored by Bed Bath & Beyond, Books-A-Million, Home Depot, Michael's, Old Navy, Target and TJ Maxx. Colonial Promenade Trussville, located northeast of the city along Interstate 59, is a 388,602-square-foot power center anchored by Wal-Mart Supercenter, Goody's Family Clothing, Marshalls and Regal (16) Cinemas.

Publix has four new Birmingham-area stores opening by fall at Southgate Village (Pellam), Trace Crossings (Hoover), Village at Lee Branch (Hoover) and Valleydale Village (Hoover). Target entered the market 3 years ago and now has a store at Colonial Promenade Tutwiler and a Super Target at River Ridge Plaza. Best Buy has one store at River Ridge Plaza and is said to be seeking another location. Kohl's is planning three stores in Birmingham, and Cost Plus World Market is reportedly entering the market soon.

There is no formal reporting of vacancy rates or delineation of submarkets in Birmingham; however, informal evaluation indicates low vacancy rates overall. The only exception to this is the recent withdrawal of Macy's from the market. The Federated retailer is reportedly leaving River Chase Galleria, after apparently suffering stiff competition from Rich's and Birmingham-based Parisian. The Macy's space is reportedly being marketed, although the retailer has not yet departed.

Continued growth is expected along the Highway 280 corridor. State Highway 149 and Lakeshore Parkway are expected to be hot growth corridors. Both of these areas are benefiting from the traditional growth patterns of Birmingham, which have been to the east and south. However, the north side of Birmingham is a new growth quadrant, which will make U.S. Highway 11 to Trussville attractive for development.

"Opportunities exist for redevelopment of the Eastwood Mall area. The mall was built in 1959 in the first suburbanized area outside of the city of Birmingham," says Leonard. "The area is now considered transitional with nontraditional demographics. Once the largest shopping mall in the nation, Eastwood Mall is located on Crestwood Boulevard in eastern Birmingham. The 680,000-square-foot mall is currently anchored by Parisian and Books-A-Million, but Parisian is rumored to be leaving. The center competes with more than 1 million square feet of freestanding and big-box retail in the vicinity. In addition, Century Plaza Mall and the new Colonial Brookwood Village offer shoppers a variety of shopping alternatives nearby. However, the area's location and accessibility are still strengths that can be built upon."

Lynn Leonard is vice president - marketing and content at NewBridge Retail Advisors.


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