City planners and developers are actively trying to fill the gaps in Tuscaloosa’s current retail market that are causing the city to lose millions of tax dollars every year to communities with stronger retail developments.
With proposed retail developments planned for all over the city, the Chamber of Commerce has hired Retail Specialists, a Birmingham-based company specializing in retail recruitment that will help the city determine the likelihood of success for these projects as part of a plan to keep citizens’ tax dollars in the community.
Robert Jolly, president of Retail Specialists, said while his company is responsible for evaluating incentive requests like the $18 million tax rebate request from the Shoppes at Legacy Park developer, they are also in the process of recruiting retailers to the trade area on behalf of the city.
“We’re working from a strategic plan from a retail recruitment prospect report, and every one of these retailers that you’re hearing rumors of were on our prospect report from the very beginning a year ago,” Jolly said. “So we’re still working within the boundaries of what we believe to be good, solid economic development in Tuscaloosa and not yet saturation.”
When determining the types of stores that need to be recruited to the area, Jolly said his company identified six categories in the Tuscaloosa market that experience a significant gap or loss in dollars to a different community.
“The first step in our engagement with the city was to research, and a key component to our research is what we call the gap analysis,” Jolly said. “It’s broken down by the gaps, so it identifies the dollar amount that is leaving mostly for Birmingham for shopping because there isn’t sufficient shops in certain categories. The gaps become the roadmap for recruitment.”
His office believes the grocery store business has the largest gap with potentially $248.5 million leaving the community each year. The study also claims the electronics market loses $37 million, family clothing stores lose $17 million, home furnishings loses $8 million, sporting goods loses $6 million and pet supplies loses $3 million.
In order to bring these shoppers’ dollars back into the community, Jolly said his team is working to recruit several big-name anchor stores to fill the new and existing retail developments in Tuscaloosa.
“We work with the city of Tuscaloosa and we recruit retailers, so when we call on a Fresh Market, we talk exclusively and specifically as the city’s advocate,” Jolly said. “We talk about specific sites that are available in the market, and there are two or three key properties that are kind of ripe for development and re-development, so we mention those to the retailer.”
Jolly said right now his office is focusing on the opportunities for retail expansion specifically in the Legacy Park development and the Encore project, which will redevelop the McFarland Mall.
“I mean there will be a point where we will, as the city’s partner, kind of time out and look at saturation, but Tuscaloosa is still, in my opinion, underserved in some categories of retail,” Jolly said. “A lot of that will be addressed by the Legacy Park project, and then there are other categories that could be addressed on the McFarland Mall project.”
With both projects reaching out to the same possible tenant list, many citizens have expressed concern on whether the community can sustain the amount of retail both developments will provide. Tuscaloosa mayor Walt Maddox, however, said he believes this competition can be healthy.
“Well, I’m sure the major retailers are looking at both locations,” Maddox said. “Tuscaloosa, by most standards and most economic reviews that have been done, has shown that we have gaps. We’re losing commercial retail to Jefferson County, so I would imagine that you need different sites to recruit more successfully.”
Maddox said when the council evaluates proposed retail development plans, they determine what the cost benefit would be for the city and proceed from there.
“Based off the data generated by the Chamber of Commerce from West Alabama, there is room for significant retailers in the market,” he said. “So I think the inherent answer is yes, we do need these projects.”
Patrick Agee, a commercial real estate agent for Advantage Realty, said he believes there are several factors that create a demand for retail that is bigger than the population demographic may show.
“If you look at our population numbers, which is the common thing that a lot of people do when they look at our market from outside, you have to take into account the student population and the fact that we are a 12 county trade area, which means that we pull people in from conjoining counties,” Agee said. “And being in the real estate business, I know there is a big gap for retail in Tuscaloosa.”
Agee said while he thinks both projects could be very successful, he is hesitant because similar projects in the area did not necessarily always boast positive results in the past.
“The thing I go back to is Midtown Village, which has never been above the low 80 percent capacity range right now, and they’ve never come to close to being full,” he said. “I know that when Target first came here, it underperformed for the first few years, but now I understand it’s doing well.”
Nevertheless, Stan Pate, the developer in charge of the Encore project, said in November there are still plenty of retail faces the community needs, so he believes in the Legacy Park development in addition to his own.
“As a developer, I see it as a great project, and as a developer that has a competing side, I don’t see it as a threat at all,” he said. “There’s enough interest in Tuscaloosa to fill up three sites.”
Despite his reservations for the creation of more retail space, Agee said the re-development of McFarland Mall is a must.
“It’s a gateway to our city, and the city is starving for it,” he said. “I think it could get some of the 70,000 cars that drive by everyday off the interstate to spend some money. If they spend their dollar and we get 9 cents, it doesn’t tax our roads, it doesn’t tax anything. It’s just a free 9 cents a dollar. That should be the city’s ultimate goal.”
His office believes the grocery store business has the largest gap with potentially $248.5 million leaving the community each year. The study also claims the electronics market loses $37 million, family clothing stores lose $17 million, home furnishings loses $8 million, sporting goods loses $6 million and pet supplies loses $3 million.
