Gulf Coast Retail Carries On
Despite numerous setbacks, the retail market in the Gulf Coast is coming back strong.
Stephen O’Kane

Development in the Gulf Coast area has been increasingly difficult during the past few years — not only due to the natural environmental challenges, but also because of the relatively recent wave of inclement weather that has struck the region. Developers of all types of properties are finding development in the area challenging, but with great rewards. Even though the development process is becoming more and more problematic, with dwindling land and rising insurance rates, the retail market continues to grow and expand throughout the region.

“The Gulf Coast areas of Biloxi, Mississippi, and Louisiana are showing a resurgence after Hurricane Katrina,” says Will Wilson, vice president of development for Montgomery, Alabama-based Jim Wilson & Associates. “The casinos are back along the Mississippi coast, federal government money is assisting in redeveloping the areas, and the population is returning.”

With the population beginning to grow again in this part of the country, the retail development is expected to grow as well. Residents, as well as tourists, are coming to the Gulf Coast and Jim Wilson & Associates is catering to the retail need with three major projects in Mississippi and Louisiana — Juban Crossing, Juban Crossing Marketplace and Edgewater Mall.

Jim Wilson & Associates’ Juban Crossing and Juban Crossing Market Place will be the largest mixed-use project in Louisiana.

Juban Crossing and Juban Crossing Market Place, a 1.2 million-square-foot, open-air, mixed-use development, is located at the intersection of Interstate 12 and Juban Road in Denham Springs, Louisiana. The project, which is a joint venture between Jim Wilson & Associates and Creekstone Companies, is positioned on 471 acres of land and will be the largest mixed-use development in Louisiana. Juban Crossing will comprise 838,000 square feet of retail in a lifestyle center setting, and Juban Crossing Market Place will span 437,000 square feet in a power center setting.

Plans for the development also include approximately 385,000 square feet of medical office space, 625 single-family home sites, 524 condominiums and apartments, a movie theater and an amphitheater.

Phase I is scheduled to break ground this summer and will primarily include Juban Crossing Market Place. The first retail tenants are scheduled to open in 2008, followed by office space, entertainment venues, restaurants, hotels and residences.

While the trend of developing new, open-air lifestyle centers is in high demand, traditional retail properties, such as enclosed malls, are making a comeback as well. However, the development and renovation process is not an easy one.

Jim Wilson & Associates is involved with Edgewater Mall in Biloxi, Mississippi. Edgewater Mall, which is anchored by Belk, JCPenney, Sears and Dillard’s, is a traditional enclosed mall that spans approximately 900,000 square feet.

Edgewater Mall in Biloxi, Miss., is an example of a successful traditional enclosed mall.

“At Edgewater Mall in Biloxi, sales are good and there is a lot of activity and interest,” says Wilson. “The traditional enclosed centers like Edgewater Mall will remain viable if the developer continues to upgrade and lease to compete with the lifestyle centers. In the next 10 years, it will be critical for older malls to renovate and continue aggressive leasing efforts to remain competitive.”

Moving east to Alabama, the retail growth continues. Two significant projects have taken root in the state — Colonial Promenade South and EastChase Market Center.

“In the Gulf Coast, land continues to be less expensive, and governing bodies throughout the Southeast continue to be generous with the retail incentives offered to developers,” says Cam Ward, the executive director of the Alabaster Industrial Development Board. “This is combined with the long term projected population growth that will provide a strong customer base.”

The Alabaster Industrial Development Board is working with Colonial Properties Trust to develop Colonial Promenade South, a 450,000-square-foot retail center located in Alabaster, Alabama. The project, which will be anchored by Target, JCPenney and Best Buy, is scheduled for completion this July.

“The trend toward open-air centers is still going to continue and this will only ease with the stronger growth of lifestyle centers in select communities,” says Ward. “It really depends on the demographics and growth pattern of each community that will determine if it is ready for a lifestyle-type of center or not.”

The demographics are exactly why retailers and developers are coming to the Gulf Coast. “Retailers are attracted to the Gulf Coast because of the returning population, the tourists, the weather and the favorable retirement location — the same as developers,” says Wilson. “The Gulf Coast communities are generally receptive to development, depending on city needs and sale tax issues. Developers have to understand the unique needs and demographics of each market and plan the development accordingly.”

Jim Wilson & Associates is catering to the demographics in Alabama with a new power center located at the intersection of Interstate 85 and Taylor Road in Montgomery. Scheduled to open this summer, The EastChase Market Center, which will span 513,688 square feet, is planned to house two anchor stores and eight mid-box retailers. The property is surrounded by other developments such as The Shoppes at EastChase, a 432,000-square-foot open-air retail center; The Plaza at EastChase, a 325,907-square-foot power center; and Lakeview Center at the Office Park a EastChase, a 100,000-square-foot office building. Outparcels in the area house tenants such as Starbucks Coffee, Chick-fil-A, Sonic, Hampton Inn & Suites, Verizon Wireless, Wachovia, Lifeway Christian Store, Ruby Tuesday, Whataburger, The Vitamin Shoppe and Chili’s.

Saad & Vallas Realty Group is developing Forum Shops, a 37,000-square-foot retail center located in Semmes, Ala.

Also creating a presence in Alabama is Saad & Vallas Realty Group. The company currently has two projects in Semmes — Forum Shops and Alpha Village. Forum Shops, which is currently being developed, will be an approximately 37,000-square-foot retail center featuring tenants such as Rent-A-Center and Beef O’Brady’s. It is scheduled to open second quarter this year. Also in Semmes, Saad & Vallas Realty Group has developed Alpha Village, an approximately 5,000-square-foot retail property housing tenants such as Cingular Wireless and Rhino Video. The project opened last year.

Rave Motion Pictures will anchor Bayou Plaza, McClinton & Company’s 77,000-square-foot retail development in Pensacola, Fla.

The panhandle of Florida is no exception to the retail growth occurring elsewhere along the Gulf Coast. Montgomery, Alabama-based McClinton & Company is active in this area with its Bayou Plaza in Pensacola. The project, which opened at the end of last year, spans approximately 77,000 square feet and is anchored by Pensacola’s second Rave Motion Pictures theater. Other tenants include Starbucks Coffee and Ruby Tuesday.

“The trends we saw in the Pensacola market while developing Bayou Plaza were consistent with those of the last several years — quality outdoor community and lifestyle-type centers catering to the typically cooperative weather patterns in the Panhandle of Florida,” says David McClinton, senior vice president of development for McClinton & Company. “Retailers seem to be intrigued by these Gulf Coastal markets, although ‘proving’ demographics in the past has been somewhat challenging in markets like Destin, Panama City and Pensacola, Florida. Retailers now understand not only the depth of tourism, but also the discretionary spending dollars that the tourists bring to these coastal markets.”

Saad & Vallas Realty Group is also developing in Florida with its Pace Plaza in Pace, a suburb of Pensacola. The project, which is scheduled to open fourth quarter this year, will span approximately 9,050 square feet and house tenants such as Starbucks Coffee and Quizno’s Subs.

“The residential growth has spawned the retail growth,” says Christie Amezquita, commercial associate for Saad & Vallas Realty Group. “The Pace market is growing rapidly and has attracted retailers such as Wal-Mart and The Home Depot. The smaller retailers are following these anchors.”

Collateral Real Estate Capital is also involved in the Gulf Coast retail market with Glengary Shoppes in Sarasota, Florida. The company recently provided $17.15 million in refinancing for the 113,118-square-foot lifestyle center.

“The Gulf Coast, especially Florida’s Gulf Coast, has excellent demographics, which are centered around an aging population with disposable income and tourist traffic with disposable income — both of which drive retailers’ demand for land,” says Steve Mench, director for Collateral Real Estate Capital. “The dense high-income population centered around coastal cities, plus tourism, attracts retailers looking for redevelopment opportunities up and down Florida’s Gulf Coast. The main barrier to entry into this market is the lack of vacant, available land.”

The breadth and quality of retail developments currently being constructed or planned in the Gulf Coast region of the U.S. is showing just how the nation is responding to the natural setbacks that occur. Despite the tumultuous past few years, the population, as well as the retail, are pulling together to bring this area back to life.

“One of the most notable comparisons to other retail hubs in other parts of the country is the fact that the discretionary spending dollar that comes to the Gulf Coast would compare favorably to that of almost any major metropolitan retail market in the country,” says McClinton. “This has increasingly become a higher class of tourism over the last 15 years and that trend seems to do nothing but continue to improve.”


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