Madison, Ala., city officials didn't want just any development for its last available commercial tract, a 28-acre property along a major thoroughfare. They wanted to bring in retailers currently unavailable in the area.
They approached Target and Brentwood, Tenn.-based GBT Realty Corp., a developer known for its Target-anchored developments.
"Madison told us they wanted Target," explained George B. Tomlin, president and CEO of GBT Realty. "If you help us, they said, we'll participate financially in the development of the property."
Three-way partnership: That conversation began a three-way partnership among Madison, GBT and Target. The trio produced The Shoppes of Madison and brought a 133,000-sq.-ft. Target, plus a number of new brand names to the area, including Five Guys Burgers and Fries, Fulin's Asian Cuisine, specialty outfitter Kinnucans, Pie in the Sky pizza and Shoefly women's shoes. The development currently boasts a 98% occupancy rate.
Madison contributed $6.5 million toward the land development of the project by selling bonds. A portion of the sales taxes generated by the development will go toward paying off the bonds. The rest will contribute to economic development across Madison.
The trading area: The demographic profile describes the trade area surrounding US Highway 72 near Wall Triana Highway as the best-educated and fastest-growing area in the state. More than 43,000 vehicles pass the site everyday on US 72.
Household incomes are high, too. Within a three-mile radius, the population of 39,303 earns an average $113,090 per household. At seven miles, the population is 121,439 with an average household income of $88,917.
The 500 full- and part-time jobs the development has delivered may help to raise those averages in coming years.
Strategic management: GBT is as strategic at the marketing level as the project level. When the recession shut down shopping center development, GBT formed a net leasing division. "Since 2009, we have developed approximately $350 million of free-standing, single-tenant, triple net lease properties and $75 million in shopping centers," Tomlin said. "All told, we have developed more than 350 properties in the last four years."
By 2010, the net lease division had become a key component of GBT. In fact, the company recently introduced a net lease platform offering market research, acquisition, brokerage, engineering, development services, construction management and capital to other development companies.
"Many of these developers have strong retail relationships, but only have resources to manage a few projects," Tomlin said. "Our program could help a developer expand up to 20 projects per year or more."
Shopping center development: The net lease division has not replaced shopping center development at GBT. "Shopping center development came back in 2010," Tomlin said. "That led to a handful of completed projects last year and this year. We now have 21 properties under contract and have begun negotiations with retailers.
"It all began when the City of Madison asked us to bring The Shoppes of Madison to town."