Rendering courtesy of the Daniel Corporation.
Vestavia Business Development
Construction work has begun at the site of the Northport skilled nursing facility. It will be one of the earliest buildings to be completed at the Patchwork Farms development.
Since the economic collapse in 2008, Vestavia Hills has seen a slow rebuilding of the new home market. From a low of 26 residential building permits issued in 2009, the city has grown to a high of 114 in 2014.
Commercial construction, however, has not had the same rebound, with seven or fewer permits issued per year since 2008. With the exception of Lifetime Fitness in 2012, the citywide value of new construction has not exceeded $5 million per year in that same time.
By the end of 2015, however, City Manager Jeff Downes expects the bar for commercial construction will be set higher than ever before.
“2015 for new commercial construction permits will be a banner year,” Downes said. “As we sit here today, we have well over $20 million in new construction permits that have been issued over six different projects. But by the time the fiscal year is out, we expect that number to be over $100 million.”
The first six projects are already underway: Sprouts on Old Montgomery Highway, the 120-bed Northport skilled nursing facility at Patchwork Farms, Zaxby’s in Cahaba Heights, two office buildings and a medical office building in Cahaba Heights. They total $21.8 million in value.
Several more projects are “queued up” to begin this year, and Downes said the total is likely to reach 15 or 16 brand-new projects. These will include three office buildings, a 130-unit senior living facility, a 270-unit multifamily residential project and retail development at Patchwork Farms, as well as retail and mixed use in Cahaba Heights.
Some other projects, as well as the specific retailers, are too early in the process to announce. Downes said they will range from small local shops to restaurants to larger chains, and the first announcements could come later this summer.
“They’re all positives, and they’re all things that I think will be welcomed by our community,” Downes said.
The clear linchpin in Vestavia’s commercial growth is Patchwork Farms. Doug Neil, the Daniel Corporation vice president of development, said it is a “tremendous opportunity” that will be realized in the next 18 to 24 months.
The Patchwork Farms master plan calls for 60,000 square feet of “village scale” offices, which will be two stories and house small to medium-sized tenants. There will be between 100,000 and 120,000 square feet of retail space located across from Lifetime Fitness on Healthy Way. The retail building will be anchored by a grocery store, three to four family-oriented restaurants and a handful of boutiques and shops.
“The project has really been designed to seamlessly blend into the surrounding areas,” Neil said, noting that the master plan includes an 8.5-acre nature park with walking trails connecting the developments.
Work has already begun on the nursing facility and senior living center, and construction on roads and other infrastructure should be completed in 30 to 60 days. The residential developers have submitted their architectural plans for city approval, the office buildings are in the design phase, and several retailers have closed on their land parcels. Neil said he hopes to see retail development begin in September.
Since Vestavia Hills is “landlocked” by other cities, finding new properties for development is a challenge for the city. However, Downes said sales and property taxes are the lion’s share of city revenue, paying for salaries, capital improvement projects and more. Municipal expenses will continue to rise, and new commercial projects equal a new revenue stream.
“If city doesn’t grow, it will wither,” Downes said.
To encourage development, Downes said Mayor Butch Zaragoza and the city council have provided incentive programs, pre-development services and support infrastructure to prospective developers to make Vestavia Hills properties more enticing.
“We want to make it easy for the private sector to do business in our city and to explore the properties that we have available for development,” Downes said.
Residential construction is on a similar path to reach new record numbers since the recession. As of May 27, 65 residential construction permits had been issued within the city, putting it on track to exceed the 114 permits issued in 2014. There have been pockets of residential growth throughout the city, but Downes said the majority is in the relatively undeveloped area of Liberty Park.
Shawn Arterburn, the Drummond Company’s vice president of development, said Liberty Park is growing by 60 to 75 new homes per year, and the demand is so high that they’re pre-selling houses. He remembers when the recession made the home construction rate so low that “you [could] measure it on one hand.” The combination of new designs, low interest rates, a strong developer and nearby schools are why he thinks Liberty Park is booming again.
As more people call Liberty Park home, Arterburn said it opens the door for new retail options in the area. There is a 700-acre undeveloped parcel in Liberty Park parallel to I-459, and he said it’s being considered as a site for 1,100 new homes and a 40-acre mixed-use development.
This would include 100,000 to 150,000 square feet of office and retail space for grocery, dining and entertainment with condominiums or lofts above the storefronts. There is no set timeline, but Arterburn said he’d like to see this development begin in the next two to three years.
“You’re going to live, work, play in your home neighborhood. That’s the big difference,” Arterburn said about Liberty Park’s quality of life.
Downes said the next two to three years also hold exciting things for the city as a whole. The details are still confidential, but there are several projects at different stages of consideration. He said he feels confident enough to predict more $100 million construction years in the future.
“Things are looking good, and I think it’s something to talk about,” Downes said. “We’re in a position to grow like we’ve never grown before.”
