Downtown Birmingham’s expansive new 20 Mid Town development — which hosts a Publix supermarket, Starbucks, luxury apartments and other retail space — is rapidly emerging. But the behind-the-scenes negotiations and work on the venture, including luring the game-changing Publix, took about a decade.
The mixed-use development, valued at more than $100 million and stretching over three city blocks at the intersection of Third Avenue South and 20th Street South, is being built in two phases. The first building, which includes the Starbucks, Chipotle and 36 upscale apartments, is complete. Starbucks opened last August and the Chipotle in December. The remaining retail space is leased and occupied or soon will be. The studio apartments and one-bedrooms currently are being leased for $1, 195 to $1, 800 per month.
The second building, housing the 30, 000-square-foot Publix, with a full-service pharmacy, a parking deck atop the supermarket, plus 86 luxury studios and one and two-bedroom apartments above, is under construction. Publix is slated to open by the end of November and the apartments could be ready to lease by the first of the year.
Construction on the third building, which will include about 39, 000 square feet of retail space and 230 to 245 upscale apartments, is set to begin soon. That second phase of the 20 Mid Town development could be complete by the third quarter of 2018, the developers say.
The project is the brainchild of business partners Richard Schmalz, of RGS Properties, and Scott Bryant, of Scott M. Bryant & Co. and Cypress Partners.
Bryant bought the old Firestone Building, now the site of the new apartments and Starbucks, in 2000. He had relatives in the car industry and believed that the once-vibrant automotive sales and service corridor was due for a rebirth. “I knew it was a great location and could be a good redevelopment area, ” Bryant says. “I had many offers for ideas to develop the property over the years but was determined to hold out for the right deal.”
Then in 2006, Schmalz approached Bryant with his idea to create a downtown development anchored by a grocery store. The two soon began working on potential development ideas for the Firestone corner’s adjacent properties, which were in the hands of multiple owners. “We thought about and tried a number of things that didn’t work out; then finally the timing was right for exactly the right thing, ” Schmalz says. “We never anticipated we would become a new bull’s eye for downtown development.”
The partners’ development is coming during the midst of a building boom, valued near $1 billion in total, and bringing an abundance of urban housing and retail space to the area from Second Avenue North to Fifth Avenue South between Interstate 65 and the Lakeview area, Bryant says. The momentum has been driven in part by a number of city initiatives, including the widely popular Railroad Park and Regions Field, which have served as major redevelopment magnets.
But the road to what looks like a bright future for 20 Mid Town wasn’t paved easily or overnight and required much wherewithal and patience from Schmalz and Bryant. The two first approached the Publix real estate committee in 2007 and were turned down. “Publix thought it was a little too early in downtown Birmingham’s redevelopment cycle, ” Schmalz says. “There weren’t yet enough residents living in the area to make the project viable, they believed.”
The developers again presented a proposal to the Publix real estate committee in 2009 and were refused a second time. “They thought it was still too early, ” Schmalz says. “At a certain point we decided we couldn’t wait on Publix to move ahead.”
Schmalz and Bryant considered and approached other grocery store chains, as well as retailers, to anchor the development. In 2012 they decided to go ahead and develop on the site of the old Firestone building. Bringing Starbucks on board for that first building was a coup. “Their presence generated a lot more interest in the project, ” Schmalz says.
With Starbucks anchoring the first building and with the numerous other downtown residential developments planned or in progress, Publix became extremely interested in joining what would become 20 Mid Town. The Birmingham City Council was so in favor of the plan it voted unanimously to authorize a $6.4 million incentive agreement between the city and the developers. “Everything really began falling into place, ” Bryant says.
However, the ultimate financial triumph of 20 Mid Town is no guarantee, the developers say. “Everyone is already calling it a success, but it’s not complete and fully leased yet, so we still have a lot of work to do, ” Schmalz says. “We are continuing to respond to market demand as we shape and market the remainder of the project.”
The entire development benefits from proximity to the University of Alabama at Birmingham hospital complex, UAB’s many other educational options, Southside and midtown enterprises and entertainment venues attracting a variety of tenants, say Bryant and Schmalz.
“We’re drawing not only the millennials and retirees but everyone in between, ” Schmalz says. “So far we have leased in the age ranges of 18 to 70 years old. People are discovering how attractive it is to live where so much is within walking distance.”
Throughout his career Schmalz has specialized in the development of shopping centers and mixed-use developments with anchor grocery stores. He was associated with the development of the 29 Seven apartment and retail development in the Lakeview entertainment district of Birmingham. “Every project is a risk but should be such a calculated one that you don’t have to worry too much about it failing, ” Schmalz says.
Bryant is and has been involved with a number of ventures including the SoHo Square multiuse development and Aloft hotel in Homewood, rural land sales, and Resource Fiber, a company growing bamboo for commercial purposes. “I don’t think of my projects as risks, I focus on working on the challenges, ” Bryant said. “If you knew every challenge you would have to face before you started a development, you probably wouldn’t take it on. But just working out the challenges as they arise, to me it doesn’t seem to be taking a risk.”
While the 20 Mid Town development is the first collaboration for Schmalz and Bryant, they say they have enjoyed the process and are open to working on others as a team. They currently are discussing the possibility of a mixed-use development with the city of Gadsden. “Developers are basically one-man shows. But you try to bring all the right players to the table for each deal, so when there are opportunities where both our areas of expertise are needed, we likely will partner again, ” Bryant says.
Kathy Hagood and Cary Norton are freelance contributors to Business Alabama. She is based in Homewood and he in Birmingham.
Text by Kathy Hagood