There seems to be a drug store on every corner in many of Birmingham’s suburbs, and hotels dot those areas, giving travelers places to lodge outside of the city center. Restaurants—both chains and homegrown– spring up frequently in cities such as Hoover and Starbucks is a staple in the burbs.
But securing those types of businesses for the new CrossPlex Village—a 38-acre, mixed-use development adjacent to Birmingham’s sports complex in the heart of the Five Points West community—has proven to be no small task.
“There are unique challenges in developing this property,” Bob Nesbitt of Engel Realty said. Nesbitt serves as the developer of CrossPlex Village. “We have had to market more aggressively.”
Nesbitt and his team have successfully wooed national retailers Starbucks, hotel chain Comfort Suites and breakfast eatery Huddle House to the new development. A national drug store chain will likely follow, he said, along with some additional restaurants and other retailers. Work on CrossPlex Village is slated to begin in November.
It is a promising start to a project that has been in the works for more than a decade, but Nesbitt and city leaders acknowledged there is still the need to lure more big names to the development. That means changing the mindset of those retailers, many of which prefer building in the suburbs to more urban areas.
Urban hard sell
“CrossPlex Village is very much an urban project,” Nesbitt said.
Despite having a built-in income generator such as the CrossPlex, a 750,000 square-foot sports facility with an Olympic pool and six-lane track that can draw thousands of people into the area during sporting events, an urban development such as CrossPlex Village may fail to entice retailers into moving in. Why? Because of its location in an inner city community filled with older neighborhoods and lower property values.
The CrossPlex and proposed CrossPlex Village are located in the heart of the Five Points West community, which is made up of six neighborhoods: Central Park, Bush Hills, Fairview, Green Acres, Ensley Highlands and Belview Heights. A 2012 retail market analysis commissioned by the city indicated the median household income in Five Points West was $30,274 — lower than Birmingham’s median household income of $35,301 at that time and lower than in the communities outside of the city that have seen successful retail growth. But the study also concluded that the density in the community is favorable for retail development and that residents were willing to spend money in the community. Birmingham City Councilman Steven Hoyt agreed.
“This is one of the most densely populated areas and I think we can support a JC Penney or a Sears or a Target,” Hoyt said. “We are not asking for the world, we just want to be treated fairly.”
Hoyt pointed to an already established retail community around the CrossPlex, which boasts a grocery store, many fast food restaurants and smaller clothing and shoe stores as a reason for more retail growth. Retailers including Dollar General, Winn Dixie, Payless Shoes and CVS are already in the area.
Hoyt said he thinks that something like the recent developments in Fultondale could work in Five Points West at CrossPlex Village. Fultondale has lured coveted retailers such as Target, Publix and Aldi.
The councilor said he has been pushing development of the area since he was a neighborhood president and the CrossPlex was still just an idea on the drawing board. He expressed some frustration that retailers focused on areas with higher household incomes. “Must that always be the criteria? We are great consumers and we will drive 30 to 40 minutes to spend our money somewhere else,” he said.
But it’s still household income statistics and other factors such as a perception of high crime rates and distribution challenges that could likely keep some retailers from giving urban developments a second look, according to a 2014 study of the challenges of attracting retailers to inner cities. It is simply more attractive, and seemingly less risky, to build in the burbs for some retailers, said that study’s author.
“It is just easier for retailers to do what they have already done over and over,” said Maureen McAvey, principal for McAvey Consulting in Bethesda, Maryland. “You really have to find retailers and leaders who are willing to think outside of the box.”
McAvey is co-author of the study “Retail in Underserved Communities” commissioned by the Urban Land Institute. The study highlights the challenges and eventual successes of building retail developments in urban areas in Houston, Washington, D.C. and Pittsburgh.
Retailers look at several factors when determining where to locate, McAvey said, but the main factors include income and income distribution, density of the area and what the retail market in the area already looks like. “They want to know if the market is already healthy in the area,” she said.
When those factors don’t show favorably in an area, it takes extra work and incentives to get a commitment. “Almost always a city has to contribute money to the project,” she said.” It takes a partnership.”
Such is the case at CrossPlex Village, where the city has pledged $5.8 million towards building the infrastructure — roads, utilities and lighting — in the development.
A case for success
McAvey, who has no affiliation with the CrossPlex development, said with the proper incentives and the right retailer coming on board, urban projects can flourish. She pointed to a development in the community of East Liberty in Pittsburgh. Much like Five Points West, the East Liberty community had been labeled economically distressed with an average household income lower than that in Pittsburgh proper. There were vacant buildings and a perception of crime in the area. McAvey said city leaders were eventually able to persuade Home Depot to be the first to locate in the redevelopment area and when that retailer saw successes, others, including Walgreens and a Whole Foods followed.
Whole Foods, the upscale national grocer that specializes in natural and organic foods, was an unexpected success in East Liberty, McAvey said. The grocer, which typically locates in more affluent communities, saw higher than projected revenues, she said, and almost two-thirds of the store’s sales came from food stamp purchases.
McAvey’s study concluded that finding the right mix of retailers makes the difference in creating successful urban developments. McAvey said it also helps to have a catalyst — much like a sports complex that draws in crowds of people — in the area to draw people in to make such developments work.
Changing perceptions, moving forward
Birmingham has actually made significant strides in urban development in some parts of the city — development and redevelopment of the downtown, midtown and Avondale communities serve as shining examples. But some of the city’s residents in communities outside of those areas have been expressing concerns about being left out of the progress.
Nesbitt said work will continue to draw more tenants to CrossPlex Village. Developers are eyeing not only stores but medical facilities and eventually residential development. An apartment community is planned for the second phase of the project.
“There is no project like this one,” Nesbitt said, adding that in marketing to more companies he will have to demonstrate that the area can support more retail and that is it safe.
Hoyt agreed that changing the perception of criminal activity in the area is key, yet he maintains that the idea that there are high crime rates in the area is a misconception. He pointed to the city’s new West Police Precinct just around the corner from the CrossPlex as evidence.
Mayor William Bell earlier this year told residents of the community that pushing the development around the CrossPlex is a priority. “This district is our most densely populated, yet underserved,” Bell said. “We are doing our best to present a unique and full featured development that will rival any statewide.”