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Image from Hunden Partners study
A conceptual drawing of both phases of recommended redevelopment of the Riverchase Galleria campus shows demolition of both the former Sears department store and the current Macy's store, replaced with 542 apartments, an 1,100-seat Center for the Arts, 44,000 square feet of retail space and 44,000 square feet of green space.
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Image from Hunden Partners study
A conceptual drawing of both phases of recommended redevelopment of the Riverchase Galleria campus shows demolition of both the former Sears department store and the current Macy's store, replaced with 542 apartments, an 1,100-seat Center for the Arts, 44,000 square feet of retail space and 44,000 square feet of green space.
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Image from Hunden Partners study
A conceptual drawing of both phases of recommended redevelopment of the Riverchase Galleria campus shows demolition of both the former Sears department store and the current Macy's store, replaced with 542 apartments, an 1,100-seat Center for the Arts, 44,000 square feet of retail space and 44,000 square feet of green space.
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Image from Hunden Partners study
A conceptual drawing of phase one of a redevelopment of the Riverchase Galleria campus would involve demolition of the former Sears department store, replacing it with 282 apartments, an 1,100-seat Center for the Arts, 28,000 square feet of retail space and 25,000 square feet of green space.
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Image from Hunden Partners study
A conceptual drawing of phase one of a redevelopment of the Riverchase Galleria campus would involve demolition of the former Sears department store, replacing it with 282 apartments, an 1,100-seat Center for the Arts, 28,000 square feet of retail space and 25,000 square feet of green space.
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Image from Hunden Partners study
A conceptual drawing of phase one of a redevelopment of the Riverchase Galleria campus would involve demolition of the former Sears department store, replacing it with 282 apartments, an 1,100-seat Center for the Arts, 28,000 square feet of retail space and 25,000 square feet of green space.
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Image from Hunden Partners study
This map shows at least 18 property owners on the campus of the Riverchase Galleria, including Costco, Home Depot and the various businesses on the outparcels on Galleria Circle around the main portion of the mall.
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Image from Hunden Partners study
A conceptual drawing of a proposed redevelopment of the Riverchase Galleria campus shows one of the proposed green spaces on the property.
A consulting firm working for the city of Hoover and several private companies is recommending a $241 million makeover of the Riverchase Galleria, according to a study slated to be presented at Monday night’s Hoover City Council meeting.
A draft of the study done by Hunden Partners and shared with the Hoover Sun calls for a major redo of the southern part of the Galleria campus, including demolition of the former Sears department store and current Macy’s store that was put up for sale in the summer of 2024.
In place of those two department stores and a small section of the mall would be 542 apartments, an 1,100-seat Center for the Arts, 44,000 square feet of new retail space and 44,000 square feet of green space for gatherings.
The redevelopment is recommended to occur in two phases, with the demolition of the former Sears space happening first and being replaced with 282 apartments, the Center for the Arts, 28,000 square feet of retail space and 25,000 square feet of green space.
Phase two would include demolition of the Macy’s site and construction of 260 apartments, 16,000 square feet of retail space and 19,000 square feet of green space.
ONLY CONCEPTUAL SO FAR
However, these plans are strictly conceptual at this point. The Galleria campus is owned by at least 18 different entities, and changes on any of the property would be up to the property owners.
The former Sears site, which has been vacant since 2019, is owned by TransformCo, a company formed by the former CEO of Sears, and Macy’s owns the property where its store sits as well as a significant chunk of parking lot space on two sides of the store.
The $200,000 study by Hunden Partners notes that visits to the Riverchase Galleria have declined by 33% since 2019, dropping from 6.3 million visitors in 2019 to 4.2 million visitors in 2024.
It’s part of a national trend with indoor malls. In the 1980s, there were more than 2,500 indoor malls in the United States, but by 2022, that number had dropped to about 1,150, according to Hunden Partners.
More than 150 indoor malls have been redeveloped or are in an active state of transition, the consulting company said in its report. Many traditional indoor malls have been transformed into dense, walkable mixed-use districts with housing, retail, entertainment, green space and civic uses.
The trend has been for apartments and townhouses to replace shuttered anchor stores and expansive parking lots, with new restaurants and retail on the ground level, plus entertainment and civic uses drawing people to the sites.
Hunden Partners determined that Hoover is lacking in entertainment options. Dave & Buster’s drew in 298,000 visits in 2024, and the Stardome Comedy Club had 61,500 visits, but options beyond that are limited, the study indicated.
Entertainment uses that have been popular in other mall redevelopments have been things like mini-golf, bowling, pickleball and arcade games, especially if food and beverage options are included, the study said.
A Center for the Arts could be attractive for both Hoover residents and regional visitors, the study said, and the Galleria campus is the ideal location for a major community attraction, with its surrounding complementary amenities, the study said.
However, arts facilities such as this typically require some type of public, philanthropic or corporate funding to cover operational deficits, the study said.
APARTMENTS
Hoover’s apartment market currently is largely made up of aging garden-style apartment complexes built before 1990, the study said. The city is lacking in upscale apartments, with not a lot of new additions that have been seen in places like downtown Birmingham and other suburban markets, the study said.
A multi-family construction boom that has taken place in the Birmingham area since 2022 has led supply to outpace demand for four years, but Hoover’s lack of upscale apartments could indicate an opportunity to capture some unmet suburban demand, the study said.
The 475-unit Colina Hillside apartment complex currently under construction off John Hawkins Parkway near the Medical West freestanding emergency department, while not in the Hoover city limits, is still in the Hoover area market and could meet some of that demand.
But Hunden Partners estimates additional demand remains and recommends 542 new apartments on the Galleria campus, with rents around $2,071 a month.
New apartments on the Galleria campus should not negatively impact enrollment in Hoover schools because new high-end apartments in areas like the Galleria typically draw more single people and empty nesters than families with children, the study said. Only 24% of rental units in Birmingham have children in them, the study said.
RETAIL OUTLOOK
The Summit has overtaken the Galleria as the primary retail destination in the Birmingham area, but the Hoover retail market, with only a .5% vacancy rate, remains fundamentally sound, the study. While visitors to the Galleria have declined since 2017, the mall still draws a significant audience from areas like Tuscaloosa, Huntsville, Montgomery, Mobile, Memphis, Jackson, Nashville and Atlanta, the study said.
Interstate 65, very close by, has 130,000 vehicles a day on it, while U.S. 31 draws 43,000 vehicles a day, and John Hawkins Parkway has 29,000 vehicles a day, the study said. There are 1.4 million people within a one-hour drive of the Galleria, 12.7 million people within a three-hour drive and 29 million people within a five-hour drive, the study said.
Hoover has experienced a 15.7% population growth since 2010, and Shelby County’s population growth has been in excess of 20%. Hoover is one of the most affluent suburbs of Birmingham, with a majority of its census blocks exceeding $130,000 in annual household income, well over the $70,307 average for the metropolitan statistical area, the study said.
The Riverchase Galleria, with 4.2 million visits in 2024, is the second most visited attraction among Birmingham’s Southern suburbs, behind only The Summit, which had 8.9 million visits in 2024, the study said. The Hoover Metropolitan Complex was third with 1.5 million visits in 2024, followed by Oak Mountain State Park (702,800 visitors) and Veterans Park (290,600 visitors), according to estimates figured using geo-fencing data.
OFFICE AND HOTEL MARKETS
Hunden Partners also studied the potential for additional hotel and office uses at the Riverchase Galleria and did not recommend adding such space, at least in the first phase of redevelopment.
The Birmingham area’s office vacancy rate is nearly 12%, the study said. That’s better than the national average of 14% but still 5% higher than the 9% vacancy rate that was present prior to the COVID-19 pandemic, the study said. The Offices at 3000 Riverchase office tower attached to the Galleria, is 50% vacant, which is concerning, the study said.
However, the asking rental rates for office space in the Hoover market have increased 2.3% over last year, indicating a healthy demand despite the weakened regional market, the study said.
Hoover’s hotel market has its strongest performance in 2022, but with the 329-room Hyatt Regency Birmingham — The Wynfrey Hotel already on the Galleria campus and the 111-room Home2Suites recently opening on the campus and four more hotels with 389 total rooms under construction between the Galleria and the Hoover Met Complex, additional hotel development would be risky in the first phase of Galleria redevelopment, the study said.
There may be future demand for a unique, boutique hotel experience on site in the future, the study said.
COSTS AND IMPACTS
The proposed redevelopment of the Galleria likely would cost $241 million, including $146 million in the first phase and $95 million in the second phase, the study said.
The first phase costs would include $51 million for the Center for the Arts, $85 million by a private developer and $9.6 million in infrastructure costs, while the costs for a second phase would include $87.8 million by a private developer and $7.3 million for infrastructure improvements, the study said.
Public funding, such as tax rebates to help cover infrastructure costs, are critical to enable major mall redevelopments, the study said. However, that would be part of the discussions and negotiations with property owners and/or potential developers, the study said.
The redevelopment of the Galleria likely would generate $396 million in net new spending over 10 years, 156 new jobs, $74 million in net new earnings, $6.1 million in new lodging tax revenue and $3.1 million in new sales tax revenues, the study said.
If no redevelopment occurs, sales taxes likely will decline significantly over the next 10 years, the study predicts.
