COVID-19 question marks linger for Hoover businesses in 2021
The word for Hoover’s 2021 business forecast seems to be recovery. At least that is what city and business leaders say they hope will happen in the new year.
The COVID-19 pandemic was a setback for the economy in 2020. The city’s sales tax revenues for fiscal 2020, which ended Sept. 30, came in at $83.7 million, according to preliminary and unaudited numbers. That was about $2 million less than original projections for the year and about $1 million less than actual sales tax revenues in fiscal 2019, said Tina Bolt, the city’s chief financial and information officer.
The financial impact of COVID-19 ended up not being near as harsh as city leaders feared it might be in the spring, but it still caused a lot of heartache and grief, particularly in Hoover’s hospitality industry.
Greg Knighton, Hoover’s economic developer, said he doesn’t have a crystal ball that will tell him what’s going to happen in 2021 but believes the Hoover economy is still strong.
He doesn’t expect to see a lot of new commercial construction in 2021, though there is some on the horizon. There more likely would be infill of existing shopping centers and office complexes, he said.
However, “COVID is just a big question mark behind what retailers are going to be doing,” Knighton said. “COVID is leaving a lot of question marks.”
City leaders have been eager for a while to see redevelopment plans for parts of the Riverchase Galleria and Patton Creek shopping centers, but so far, the owners of those properties have not released any details or given an indication of exactly what they’re planning or when it might happen.
The empty Sears department store at the Galleria is a prime target for redevelopment, but it has been tied up in a bankruptcy sale, adding to the complexity of multiple property owners at the mall, Knighton said.
Patton Creek has kept most of its big-box retail space full, but some smaller retailers have been moving to other places around town, leaving parts of the center vacant.
Knighton said city officials expect to see Patton Creek move in the direction of becoming more of a multiuse destination, perhaps with more residential or office components.
Some big-box vacancies have recently been filled, including Dick’s and Golf Galaxy in the former Academy Sports + Outdoors space at The Village at Lee Branch and Cazboy’s filling the Big Lots space in The Plaza at Riverchase.
But several others remain, including the former locations of Steinmart at Colonial Promenade Hoover, Whole Foods in Riverchase and Harvest Market in The Village at Brock’s Gap.
The former Winn-Dixie grocery store at the corner of John Hawkins Parkway and Interstate 459 was slated to be replaced with a Stars & Strikes entertainment center (with a bowling alley, laser tag, bumper cars, arcade and bar) in 2020, but that deal fell through when the developer who had an option to buy the property couldn’t find enough other tenants to make the deal work, Knighton said.
There also are large pieces of vacant commercial land in several shopping centers, including The Grove, The Village at Lee Branch and Tattersall Park.
Filling large spots like those is difficult in today’s retail environment, when many retailers are closing big-box stores or replacing them with smaller ones. Knighton said he wouldn’t be surprised to see some of the city’s neighborhood shopping centers break up their large vacant spaces for smaller tenants. But filling up existing space likely will be the priority, he said.
OFFICE COMPLEXES
The same is true for office space, he said. Several entities are renovating office space in Hoover.
Harbert Realty Services has been marketing three buildings in Inverness Center North formerly occupied by Southern Company Services. Each is about 150,000 square feet, said West Harris, executive vice president for Harbert.
Building 44 already has been renovated and leased to the FIS financial services company for a couple of years, Harris said. Next is Building 42, which is slated for a renovation that includes a new lobby, restrooms, elevators, conference and training center, gym and cybercafé, he said. Building 40 likely will be renovated after that, he said. The latter two likely will be used by multiple tenants, Harris said.
The property includes a walking trail around a lake and a connection to the city of Hoover’s 77-acre Inverness nature park, which has a walking trail and disc golf course.
The 500 Building at Meadow Brook Corporate Park also is being renovated, Knighton said.
The COVID-19 business shutdowns that pushed many people to begin working from home have caused many businesses to re-evaluate their need for office space and the location of that space, Knighton said.
Hoover, being a mid-sized market, could gain some office tenants as a result, he said. The cost of doing business and cost of living in Hoover is favorable compared to other places around the country, he said. And Hoover is centrally located in the state and has quick access to two interstates, he said.
Also, many companies are seeking to put offices in outlying areas instead of in large city centers, he said.
Knighton and others are actively marketing Hoover as a good site for corporate headquarters, technology companies and “clean” light industrial or manufacturing businesses that don’t create a lot of air and noise pollution.
NEW COMMERCIAL SITES
Meanwhile, there is some new commercial construction happening as well.
Stadium Trace Village is doing incredibly well as a new neighborhood village center, Knighton said. “We’re very excited about it.”
Construction of the Longhorn Steakhouse is well underway, and the restaurant should open early in the year, said Will Kadish, the Stadium Trace Village developer.
Walk-On’s Bistreaux and Bar was scheduled to close on a 1.4-acre parcel for $1.185 million on Dec. 15, and Kadish said he hopes to have the 2-acre Village Green entertainment district open by this summer or fall.
He plans to spend about $3 million developing the Village Green, which he said should include an amphitheater for concerts, plays and other performances, an artisan market, about six executive putting greens, a children’s play area with a Buccaneer ship, and an indoor/outdoor restaurant space that includes barbecue and pizza vendors. There also will be about 225 more parking spaces added to the 150 already in the development, Kadish said.
His goal is to have the Village Green done by July, but it may be fall before it’s ready to open, he said.
He also has a contract with Terra Equities to buy the vacant lot on the corner next to Aldi, with a plan for three buildings for a medical tenant, financial tenant and restaurant, totaling about 15,000 square feet, he said.
He continues to talk with hotel operators about the parcels next to Big Whiskey’s American Restaurant and Bar, but there are a few hotel operators who control the brands he wants, and they so far haven’t been ready to do a deal, he said.
Just down Stadium Trace Parkway, Trace Crossings resident Jamie Cato is proceeding with plans to build a brewery and tap room with live entertainment called the Brock’s Gap Brewing Co., just off Mineral Trace next to the Hoover Metropolitan Stadium parking lot.
And across Interstate 459, Jubilee Joe’s owner Kashif “Kash” Siddiqui is still trying to fill up several retail spots in the 10,700-square-foot strip center he recently built next to the Sprouts grocery store.
Along U.S. 31 in the original part of Hoover, the new Hoover Crossings shopping center continues trying to find tenants to join Wingstop, and LAH has broken ground for a new real estate office in the parking lot of Hoover Court.
Across town, just off U.S. 280, another new small retail center called Cahaba Market is planned next to Tattersall Park and Cavender’s.
The 12,600-square-foot strip center is being developed by D&G Development Group of Atlanta and will include a Dunkin’ doughnut shop and Five Guys Burgers & Fries, according to the company’s website. Greystone resident Tami Manofsky said she has signed a lease there for a 1,200-square-foot bicycle, skateboard and surf shop called Anatole’s. There are three other spaces in the center.
The Cahaba Market is scheduled for “delivery” in the fall of 2021, according to D&G Development’s website.
Greystone Chiropractic is moving from the Greystone Terrace shopping center to a new building in Tattersall Park and is expected to open in February.
Another new commercial development expected to open in 2021 is the PetSuites Resort, a 14,240-square-foot pet boarding facility under construction on 2 acres near the CVS at Shades Crest Road. And work is proceeding on the relocation of Oak View Animal Hospital from Pelham to a 1.6-acre lot next to Christian Brothers Automotive at 1820 Southpark Drive.
HOSPITALITY & TOURISM
Hoover’s 21 hotels also took a big hit in 2020 due to COVID-19 as people quit traveling. The worst time was in the spring when occupancy levels for most hotels in Hoover were running about 5 to 7% capacity, compared to a normal 80% percent springtime capacity, said Tynette Lynch, Hoover’s director of hospitality and tourism.
Business has picked back up somewhat, but it’s still off, Lynch said. Hotels in the Hoover and Vestavia Hills area were at 32% occupancy from January to October of 2020, compared to 49% for the same period in 2019.
When the Hoover Metropolitan Complex reopened for the summer and fall and sports tournaments were plenty, the limited-service hotels (those without restaurants and lots of meeting space) and restaurants got a big boost, Lynch said.
But hotels with a lot of meeting space are still suffering greatly, she said. “The group business is what has slowed down,” Lynch said. “Travel for corporate meetings is almost nonexistent.”
That meant a lot of furloughs for hotel workers, and a great majority of those have turned into permanent layoffs, Lynch said. “Until the corporate business comes back, I think you’ll see few people being called back to work.”
The Hoover Metropolitan Complex’s estimated economic impact on the Birmingham-Hoover area dropped from $49 million in fiscal 2019 to $35.7 million in fiscal 2020, according to numbers provided by Lynch. The complex was responsible for 45,331 hotel room nights in fiscal 2020, compared to 62,195 room nights the year before, she said.
Hotel bookings in Hoover are usually slower in the winter with fewer sports tournaments, but things have been even slower this year because people didn’t hold as many holiday parties and gatherings as usual, Lynch said. Bookings for January were slow, but hoteliers are hoping they will see some recovery as spring arrives, she said.