Vestavia Hills working to stop losing retail dollars to other communities

In July, City Manager Jeff Downes began laying groundwork to bring an out-of-market restaurant to Vestavia Hills. What he discovered both delighted and frustrated him.

“This restaurant wants to be in the Birmingham metro area, and they told me that Vestavia Hills is the epicenter of where they see their greatest opportunity,” he said. “But we have struggled trying to find a location to meet their needs. The sweet spot for a lot of places is 5,000 to 7,500 square feet. That’s where we fall short.”

This and other information, gathered in his first 30 days on the job, has helped Downes dispel one long-held stereotype about the City of Vestavia Hills – that retail businesses would rather locate outside city limits.

“High-quality retailers do want to come here,” he said. “But right now, we have an inventory problem.”

Limited space for businesses to locate is a key contributor to “retail leakage,” a term used when residents can’t get the goods and services they need in their communities and are forced to spend money elsewhere. Leakage represents a loss in potential tax revenue, and working to correct that means the city needs more bricks and mortar.

“My family and I go out of our way to shop in Vestavia when we can, but that is not always possible,” said mother of three Sara Robicheaux, also dean of business programs for Birmingham-Southern College. “Specialty stores are a huge source of our retail leakage. You don’t have to look farther than Homewood or Hoover, where you have wholesale and discount retail markets, to see part of what is contributing to the problem.”

While she acknowledged the presence of Vestavia’s well-supported Walmart Neighborhood Market, Robicheaux, an avid cook and baker, added that she frequently makes trips outside city limits to purchase specialty ingredients not found in typical grocery stores.

“We are missing out on a huge opportunity not having a gourmet grocery,” she said. “Mountain Brook has Whole Foods, Homewood and Hoover have a Fresh Market. I would love to see Vestavia add a Trader Joe’s.”

Former Economic Development Director Fred Baughman ordered a study earlier this year for the major development areas that comprise Vestavia Hills – U.S. 31 North, U.S. 31 South, Rocky Ridge, Cahaba River Road (Patchwork Farms), Cahaba Heights and Liberty Park. Examination of each area’s population and projected retail spending versus actual area spending confirmed leakage. 

“So we know what opportunities we should identify, but this is not a race to acquire retail tenants,” said Baughman, whose probationary employment ended Sept. 20. “We don’t want to recruit companies here at the expense of the major existing sales-tax producers in our city. The competition would only split existing sales tax instead of yielding new, and it would be a disservice to our existing businesses.”

The City is currently seeing interest in multiple areas. This fall, four new businesses – FoodBar, Issis & Sons, T. Wayne’s BBQ and The Egg & I – will open in the city. While Downes will be watching first-quarter retail spending at these businesses, he is also aggressively focusing on another critical area poised for growth, Patchwork Farms.

“Patchwork Farms is one of the City’s greatest assets, but for us to maximize that value, our development efforts must be well planned,” he said. “And, it has to be proactively marketed. You don’t put a for-sale sign out and say, ‘All comers, come on.’ Right now, we are re-evaluating all the unsold properties all around this area to see if we can come up with a common community vision of what will be successful and appropriate there.”

The City anticipates the opening of nearby Grandview Medical Center, and the 200,000 square feet of additional office development expected, to spur additional interest in the area. Downes believes these factors should help Patchwork Farms increase in value, and as a landowner in the area, the City will benefit.

City administrators are also keeping a close eye on the U.S. 31 property where the now-vacant Pizza Hut and Ruby Tuesday’s serve as visual reminders of the area’s retail struggles. The Alabama Power-owned property is now represented by Graham & Company, and renewed interest in those sites could come with the pending relocation of City Hall directly across the highway. 

Adding interest to the area is a potential buyer for the former Vestavia Hills Library. 

Working to fill these sites and reduce leakage, Downes has enlisted the committee assistance of the City, the Vestavia Hills Chamber of Commerce, including members Scott Perry and Martha Cook, as well as private developers such as Raymond Gottleib and Robin Morgan, to help him realize this vision. He is vetting ideas from the fundamental (signage upgrades, pedestrian improvements and the adoption of shared parking to allow for new development) to the abstract, including a direct-mail supported, event-reinforced campaign to solidify the City’s brand. 

“Our brand, as presented by the Chamber and adopted by the City Council, is based on three core values – unity, family and prosperity,” he said. “How many residents even know about our brand? Before we can put the City in the best possible light for potential investors, we as residents need to know what distinguishes us, and why.”

Downes said the committee plans to undergo a major retail recruiting and development effort via an outside consulting firm, tapping into the Chamber of Commerce and its 1,000-plus members to further reinforce the City’s message and holding funds in reserve as needed to react to specific economic development opportunities. 

“For example, if we find an opportunity for a developer to come here, but there are transportation constraints, hydrology issues, or whatever the case may be, if we have the resources to resolve that uncertainty, that’s a public/private partnership that is a win-win for both developers and city government,” he said.