Intersect Development Group Moving Forward on $35M Huntsville 565 Logistics Project

Atlanta-based Intersect Development Group has closed on a 47-acre tract for three buildings in a planned 400,000 square-foot industrial park.

The Huntsville 565 Logistics project will have a ground-breaking in the fall. The first phase of 144,500 square feet is scheduled to be completed in 2021. The Huntsville 565 Logistics park expects to be home to more than 300 workers and represents an investment of some $35 million.

The facility is designed to meet the needs of the growing e-commerce industry and local logistical/service requirements.

The site is adjacent to GE Aviation, the Target distribution center, Polaris Manufacturing and the Mazda Toyota plant.

“This is an exciting time for the Huntsville business community and its workers who will benefit from this new investment,” Intersect founding partner Scott Brown. “With the closing process completed, we look forward to beginning construction quickly and developing this new Class ‘A’ business park that will support hundreds of jobs in the local community.”

Area Commercial Construction Continues to Rise in Wake of COVID Uncertainty

There has been very little, if any, slowdown in commercial building in Huntsville and Madison throughout the COVID-19 pandemic.

While the weight of uncertainty related to the pandemic has not disappeared, commercial builders and developers continue to work through it like Marshall Space Flight Center engineers work through the challenges of the space program – always moving positively forward; always working the problem from a pragmatic standpoint; and never accepting failure as a final outcome.

According to Shane Davis, Director of Urban & Economic Development for the City of Huntsville, new construction permits, and permit inspection requests have not declined throughout the pandemic and the City continues to see strong growth in all building sectors.

“In terms of the overall environment, we continue to see multiple new projects looking at the Huntsville market as a new or expanding location,” said Davis. “While COVID has slowed the number of potential new companies and their projects, active projects are very strong and diverse in varying business sectors.

“Ongoing construction activities have been hindered by reduced workers, intermediate quarantining, and delays due to the availability in building materials. But while these conditions have slowed the overall construction pace, all ongoing commercial and industrial projects continue to move ahead with a shift in completion deadlines and openings.”

He points to the very visible and very active downtown construction happening on what seems like every block.

“City Centre is under construction with Phase II – lofts, retail, and a parking garage,” he said. “Two new public parking garages are going up at Greene and Monroe streets. Both the Curio Hotel and Hampton Inn and Suites are in the midst of construction, and the new Huntsville Hospital Tower is taking shape.

Last year, Russ Russell Commercial Real Estate set a land sales record for downtown Huntsville at $56 per square foot for the Hampton Inn and Suites project. Located on the corner of Clinton Avenue and Monroe Street, the land is prime downtown real estate across from the expanded Von Braun Center.

“It is one of the few corners that has been vacant with no building on it,” Russell said. “Out-of-town developers look at these parcels of land with fresh eyes are willing to pay a premium because they can see it developed, where sometimes local people can’t because they drive past it every day.

“I set up an ugly tent with cold beer and rare velvet Elvis artwork, and you will be surprised how it brings that vision into full view,” he said.

Mitch Coley, division Manager at Robins & Morton, said they are working on a variety of projects in the greater Huntsville area. Some of the most visible include Huntsville Hospital’s Orthopedic and Spine Tower, Redstone Federal Credit Union, 106 Jefferson, Pelham Street Park and Redstone Gateway 7100 and 8100’s new office building.

“Mid-year there was a decline in new projects and delays in projects in the planning stages as owners and developers hesitated, wanting a clearer picture of what was ahead,” said Coley. “But the industry is seeing some of these projects resuming. The good news is that those projects haven’t gone away and that’s providing strong start for next year.”

He said they are seeing a decrease in the number of new projects reported as upcoming opportunities from architect and design firms, but they believe this will manifest itself in a market-by-market and city-by-city basis. Huntsville is not likely to be as affected by what would ordinarily predict a nationwide downturn because Huntsville’s market sector is so diverse.

“Looking back at the recession of 2008, the construction industry contracted,” Coley said. “It was different from what we’re facing today because of the lack of capital during the Great Recession, but it resulted in a pent-up demand for construction.

“There was still a backlog when COVID-19 surfaced. Although some clients expressed hesitancy to proceed with projects in the very early stages of planning mid-year, we’ve seen many of them resume.”

Russell sees positive signs everywhere. From the construction of the $40 million Autograph Collection by Marriott hotel being built to replace the southern portion of the Von Braun Center parking deck; to the long-awaited downtown Constellation development, which begins Phase I construction this fall.

In addition to these large-scale projects, downtown continues to see new businesses opening up and the redevelopment of existing spaces in the core, Davis said.

“The biggest impact on new commercial projects and hospitality projects has been the pause in project financing,” Davis said. “We have dozens of projects that still have approval from both the private equity and brand/retailer sides. However, COVID-19 has caused a pause in the start of construction due to the ability to close on the financial package.

“The ability for these projects to keep the private equity and national brand approvals shows the current strength of the Huntsville market.”

Don Beck, partner in The Shopping Center Group of Alabama concurs.

“The banks are lending money and it is cheap,” said Beck, whose company specializes in retail developments. “Bankers know the Huntsville market is good because its employment base is there with federal dollars coming from Redstone Arsenal and subcontracting coming from Cummings Research Park. With the jobs there, the banks are a yes for lending.”

On the other hand, many banks are showing hesitancy toward some restaurants and hotels.

According to Joey Ceci, president of the Breland Companies, “We have several cases where regional hotel and restaurant owners are ready to move forward but in those two industries, it is almost impossible to get financing, despite their financial statements looking fine. Accessing capital is very important to companies that are expanding so this has been a deterrent.”

SouthPoint Business Park (Photo/Hollingsworth Companies)

Outside of downtown, Davis points to growth and the success of other commercial projects throughout the region.

SouthPoint Business Park, off Interstates 65 and 565 and five miles from the Mazda Toyota Manufacturing plant, broke ground on its 11th facility at the 1.9 million square-foot industrial park that is already home to six companies. The new building is the region’s largest spec industrial facility and, according to Davis, it is almost full.

SouthPoint is a component of the larger regional economic strategy, and Davis calls out regional leaders and partners for that expansion, as they continue to focus on the bigger picture and work to be successful in those areas.

“Cummings Research Park remains the location of choice for big business,” Davis said. “Several entities have plans for expansion and the city continues to invest in new and updated infrastructure as part of implementing the updated Master Plan. Even with the COVID events, projects are in the works for 2021 and we believe will be a big year for CRP.”

At MidCity, construction slowed due to COVID, but retail, hospitality, and the initial multi-family components are still on schedule to start construction this fall.

“Most of the infrastructure construction, site grading, and utility relocations are wrapping up such that the redevelopment plan can go vertical,” said Davis. “We believe 2021 will be an exciting year for MidCity as the building architecture that has been shared through the Master Plan will come to life.”

One of the worst kept secrets in Madison County is all that red clay moving around at the corner of Town Madison Boulevard and Zierdt Road.

The newest Huntsville Starbucks location and Outback Steakhouse are moving forward, while Town Madison continues to build a retail center across the street from Toyota Field. The buildings are 50 percent complete and will welcome a chef-driven Italian restaurant to its tenant line-up.

“Economic development continues to be a primary focus for our Madison team,” said Madison Mayor Paul Finley. “Our YTD sales tax is up over 10 percent from last year despite the COVID-19 situation, and we continue to see success in growing our retail sales tax base.

“Town Madison, Madison Boulevard, The Avenue Madison downtown, Midtown, the (U.S.) 72 corridor, and County Line Road have all seen growth in restaurants, retail, and groceries,” Finley aidd. “Redevelopment of Hughes Plaza, Madison Boulevard and Hughes Road all continue to give Madison an upgraded, new and positive look.”

“Retail follows rooftops,” said Beck of TSCG. “The good news is that Huntsville is still growing; we still have a housing shortage; we still have over 10,000 jobs coming into the area; and there is still a lot of demand, even pent-up retail demand.”

Beck, who has developed retail projects throughout the region, said he is positive about the future as he sees developers moving towards mixed-use projects with a housing component and perhaps an office of medical office component fitted together with traditional retail.

“We are still seeing expansion downtown and on the south part of town with the Hays Farm development,” he said. “Scottsboro, Athens and northern Madison County, Hazel Green and Meridianville are showing continuous growth.

“Athens, for instance, is getting a second Publix where the old Kmart used to be. With its proximity to the interstate and Toyota Mazda, Athens is a great commuting city for Huntsville and Madison, and it should soon see a boom as it grows together with Madison.”

He also said smaller towns such as Hartselle and Priceville are seeing growth as well because the commute time to Huntsville or Madison is workable.

“If you moved here from Atlanta or (Washington) D.C., you have an entirely different perspective on commutes,” he said. “And it is less expensive to live in those smaller towns.”

The disconnect he said is with forced reduced sales volumes. Can retailers justify the construction costs and afford the rent?

“We don’t know the answer to that yet, but at some point, business must open back up and people have to get back work,” Beck said. “There’s no way these restaurants with construction costs being where they are, can at 50 percent capacity and a limit on the hours you can sell alcohol, justify new construction costs.”

He said while rent must go down, at the same time, landlords have mortgages and they have to make mortgage payments. The good part is that developers and landlords are being creative in finding ways to make it work.

“On pre-COVID leases, landlords are working on rent deferrals or rent reductions where the tenant pays partial rent for the time being, and when things get back to normal, going back to full rent and perhaps adding a longer lease time, like an extra year on the lease.

“As long as there’s housing demand, retail will be all right, but we also don’t yet know how the Amazon effect will affect big box retail,” he said. “There are still a lot of people who want to shop in stores. Shopping is a social event just like going out to play golf or tennis. But throughout this pandemic, Amazon has filled that space and we don’t know yet how much that convenience will carry over into everyday life once things get back to normal.”

Coley too said there is still a lot of uncertainty, but his company Robins & Morton believes most people are hopeful that we will gain control over the pandemic in the not-too-distant future.

“When you think that it can be two years or more from planning to completion for a project, you can understand why a lot of active construction hasn’t slowed down,” said Coley. “You’re always building for the future, and I think that’s what we’re seeing here in Huntsville.”

Mazda Toyota Manufacturing Makes Additional $830M Investment for Technology, Training Programs

Mazda Toyota Manufacturing announced Thursday an additional $830 million investment to incorporate more cutting-edge manufacturing technologies to its production lines and provide enhanced training to its workforce of up to 4,000 employees.

Construction continues on the massive $2.311 billion Mazda Toyota Manufacturing plant. (Photo/MTM)

“This newest investment by our partners at Mazda Toyota Manufacturing shows the company’s continued confidence in the ability of our community to provide a strong, skilled workforce to meet the demands for quality and reliability,” said Huntsville Mayor Tommy Battle. “We look forward to the day when the first vehicles roll off the line.”

Total funding contributed to the development of the state-of-the-art facility is now $2.311 billion, up from the $1.6 billion originally announced in 2018.

“We are excited to learn of this additional investment being made by Mazda Toyota Manufacturing,” said Limestone County Commission Chairman Collin Daly. “We continue to be grateful to MTM for their belief in our county and look forward to our partnership with them for many years to come.” 

Mazda Toyota Manufacturing made an additional $830 million investment to incorporate more cutting-edge manufacturing technologies to its production lines and provide enhanced training to its workforce. (Photo/MTM)

The investment accommodates production line enhancements made to improve manufacturing processes supporting the Mazda vehicle and design changes to the yet-to-be announced Toyota SUV that will both be produced at the plant.

The new facility will have the capacity to produce up to 150,000 Mazda crossover vehicles and up to 150,000  of the new Toyota SUV each year. 

MTM continues to target up to 4,000 new jobs and has hired approximately 600 employees to date, with plans to resume accepting applications for production positions later this year. Construction of the plant continues, with 75-100 percent of the roofing, siding, floor slabs, ductwork, fire protection and electrical completed. 

“Mazda Toyota Manufacturing is proud to call Alabama home,” said Mark Brazeal, MTM vice president of administration said. “Through strong support from our state and local partners, we have been able to further incorporate cutting-edge manufacturing technologies, provide world-class training for team members and develop the highest quality production processes.

“As we prepare for the start of production next year, we look forward to developing our future workforce and serving as a hometown company for many years to come.” 

 

 

Mission and Vision: Region’s Largest Spec Industrial Facility Breaks Ground

All it takes is a mission and a vision for Huntsville’s long-term strategic plan to build a multicounty regional economy in North Alabama to take shape.

One of the components of that vision dropped into place recently as the Huntsville-Madison County Chamber of Commerce and the Limestone County Economic Development Authority joined the Hollingsworth Cos. in breaking ground on the largest speculative industrial facility in North Alabama.

It is the 11th facility Hollingsworth has built in the SouthPoint Business Park, which has already provided hundreds of jobs and millions of dollars in investments. When finished, the new building will be home to more than 1.9 million square feet of industrial space.

Located off Interstates 65 and 565 and five miles from the Mazda Toyota Manufacturing plant, the park is suitable for high-growth manufacturing and distribution companies who benefit from a location along the I-65 corridor in North Alabama.

SouthPoint Business Park is already home to HDT Global, Custom Assembly, Redline Steel, Woodbridge, Supreme Beverage and Aldez.

While shovels moved dirt for the sprawling new building, local and state officials and members of the business community toured two industrial buildings now available in the park. The two buildings provide 173,888 and 109,080 square feet for companies looking to expand or relocate their manufacturing and distribution facilities.

“In spite of the economic pressure of COVID-19 and this being an election year, we are very bullish on the North Alabama market,” said Joe Hollingsworth, CEO of The Hollingsworth Cos., the largest nonurban industrial real estate developer and construction firm in the Southeast. “We have grown our business on the belief that American manufacturing will continue to prosper, and the Southeastern United States will lead this growth. I would like to thank the community for being willing to invest time, effort, and money into being a true partner in making this park successful.

“It is my belief that the next eight years will be the best economic period of our lives.”

Huntsville Mayor Tommy Battle said the park will help ensure job creation and business development for the Rocket City.

“Over the past 10 years, we’ve been able to announce new and expanding companies in our community that have created 30,000 jobs,” said Huntsville Mayor Tommy Battle. “To do that requires many assets. You need a workforce, you need access to markets, and you need sites and buildings. Today’s groundbreaking gives us another tool to help us in our continuing efforts to diversify our economy and to make sure that anyone in Huntsville who wants a job can get a job. 

“We thank the Hollingsworth Companies for its continued investment and belief in our community,” 

Limestone County Commission Chairman Collin Daly said, “The groundbreaking of the largest speculative industrial building in North Alabama, despite being in the middle of a pandemic, is positive news for our county. We look forward to this new location assisting with the demand for industrial facilities needed for the continued growth in our county.”

Brooks Kracke, president and CEO of the North Alabama Industrial Development Association, said, “This latest Hollingsworth building in Southpoint Industrial Park is much needed and is very timely in order to meet the demands of our regional growth.” 

 

NitNeil Partners Announces Self-Storage Project on South Parkway

NitNeil Partners has announced plans for a 100,000 square-foot self-storage facility on South Memorial Parkway, between Office Depot and Lee’s Magic Tunnel Car Wash.

This month, NitNeil, a Southeast development partnership, purchased the two-plus acre property at 2312 Memorial Parkway to build the four-story, climate-controlled facility. The development will also feature a one-acre outparcel along the Parkway for a restaurant or retail store.

The site, which is in an opportunity zone, is close to downtown Huntsville, the Medical District, and the burgeoning West Huntsville neighborhood.

“Huntsville continues to experience tremendous population and job growth which has created a strong demand for best-in-class products and services,” said Neil Sapra, managing principal for NitNeil Partners.  “We are wrapping up similar projects in Austin and Tampa, and believe this project will add a much needed amenity to support future density to Huntsville’s urban core.”

The project is expected to break ground in August with an anticipated completion next summer.

 

Downtown Construction Continues Despite Pandemic

Despite “shelter-at-home’’ orders followed by “safer-at-home’’ and, most recently, mandatory masking guidelines because of the COVID-19 pandemic, construction downtown appears to have proceeded as expected.

Downtown Huntsville Inc. CEO Chad Emerson said he’s unaware of any plans being altered as far as building in the middle of the city is concerned.

“I’m not aware of any projects that have been canceled because of the pandemic,’’ Emerson said.

He also said he’s not sure whether or not the pandemic has slowed any construction.

“That I don’t know because, well, there are some projects that aren’t moving as fast as others but that happens all the time,” Emerson said. “So I don’t know and I haven’t heard directly from any of the developers whether the pandemic is the reason or it could be something like financing or construction materials.’’

DHI has played a major role in revitalizing the downtown district.

Current construction projects underway are the new Huntsville Hospital Orthopedic and Spine Tower, Eclipse lofts at CityCentre, the Redstone Federal Credit Union building, the Curio Hotel, and the parking deck at Green Street and Holmes Avenue.

“Those are the ones that have gone vertical,’’ Emerson said. “There are other smaller projects — the new restaurants on the North Side Square and other things like that. So there are those on a larger scale. There’s a new dessert location going into The Avenue and there’s a new lounge going into 127 Holmes. So, you have a mix of smaller or larger projects.’’

The Avenue has added Cookie Dough Magic, an edible cookie dough parlor, next to Melt restaurant on Holmes Avenue.

The 127 Holmes site also houses Moe’s Original Bar B Que.

U.S. 72 Resurfacing Project to Begin In Madison, Jackson Counties

The Alabama Department of Transportation advises motorists that a major resurfacing project on U.S. 72 in eastern Madison County and western Jackson County will begin.

Whitaker Contracting will be resurfacing more than 16 miles of the four-lane highway, from east of the Flint River in the Brownsboro area to east of Parnell Circle in the Woodville area. Work on the westbound lanes will be complete before progressing to the eastbound lanes. The $11,658,369 contract sets a Nov. 19, 2021, deadline for completion.

Prior to milling and paving beginning, a subcontractor will perform work on bridge guard rails. That work will start June 23, weather permitting. Motorists are advised to expect single- lane closures on U.S. 72 westbound between Jackson County 7 and Jackson County 63 in Woodville from about 8 a.m. to about 5 p.m. daily.

Motorists are asked to drive with caution in the work zone, reduce speed and be prepared to merge.

 

Exit Changes on I-565: New Greenbrier Ramp to Open; Detour for Eastbound Mooresville Exit

There are upcoming changes at two exits on Interstate 565 in Limestone County, the Alabama Department of Transportation announced.

The new eastbound Exit 3 off-ramp from I-565 to Greenbrier Road and Swancott Road will open Wednesday. On Wednesday night, barriers will temporarily close the eastbound ramps at Exit 2 (Mooresville Road).

Eastbound traffic to and from Mooresville Road will be detoured to the Greenbrier interchange. The closure is expected to remain in place about one month.

The $10.3 million modifications project at the Greenbrier interchange is in final stages of work. The ramp closures at Mooresville road are part of the $14.3 million widening and resurfacing of Interstate 565 in Limestone County that began this week.

Reed Contracting is the contractor on both projects.

The I-565 project, the first major project funded by the Rebuild Alabama Act, will resurface more than seven miles of I-565 from just west of Exit 1 (Interstate 65) to just west of Exit 7 (County Line Road) after widening some sections of roadway to expand the interstate to three travel lanes in each direction. Work requiring single-lane closures may occur between 6 p.m. and 6 a.m., but two travel lanes will remain open in each direction between 6 a.m. and 6 p.m.

 

 

Construction of Luxury Housing Continues as B’ham Developer Breaks Ground Near MidCity

As the worst of the COVID-19 crisis seems to be waning in North Alabama, new jobs, new construction, and plans for a new luxury living development pick up right where they left off in March.

Birmingham developers Capstone Communities broke ground on The Cottages at Old Monrovia, a 25-acre housing development near Old Monrovia Road and Oakwood Road, about a mile from Huntsville’s MidCity district. The rentals will feature a mixture of single-story attached homes, lofts and two-story townhomes.

“Our goal is to build a unique community and true sense of place at The Cottages,” said John Acken, executive vice president of development for Capstone Communities. “With plenty of sidewalks, pedestrian features and open green spaces, we want to create a safe and walkable community where residents can look forward to spending time outside enjoying cookouts, hosting community events and connecting with their neighbors.”

Capstone Communities estimates the project will bring 100 to 120 temporary and permanent jobs to the area in construction in management.

Convenient to Cummings Research Park and Redstone Arsenal, the low-density multifamily development consists of 275 cottage-style homes, expected to attract young professionals and their families, and empty-nesters looking to downsize.

Capstone Properties, the in-house management company for Capstone Communities, will begin leasing this fall. The first units are expected to be completed in March 2021 with the full completion slated for September 2021.

Architect’s rendition of the loft-style home at The Cottages.

Designed by Nequette Architecture & Design, also headquartered in Birmingham, The Cottages at Old Monrovia will offer a variety of upscale amenities such as nine to 12-foot ceilings, granite countertops, wood-grain flooring, in-unit washers and dryers, a smart home technology package, state-of-the-art fitness center, resort-style pool, centralized clubhouse, dog park, electric car charging stations, a car care center, a pet spa, 24/7 on-call maintenance and optional enclosed garage parking.

Capstone Communities (formerly Capstone Collegiate Communities) is a Birmingham-based commercial real estate firm specializing in the development, management and construction of student, multifamily and senior housing. They entered into a partnership with OG Capital, a private equity real estate investment firm specializing in the acquisition and re-positioning of existing multi-family properties throughout the South, to bring the development to Huntsville.

According to OG Capital principal David Oakley, the single-family style rentals have proven successful in other markets with a 50 percent faster lease-up period, and a 20 percent higher resident retention rate than traditional garden-style apartments.

“I first noticed this cottage concept out West a few years ago and grew to love it,” said Oakley. “Apartment living doesn’t have to mean stairs and elevators. The cottage style product meets the market by providing residents with the features they value most – private backyards, high ceilings and in-home tech packages – to name a few.”

It is Huntsville’s surge in innovation and economic growth that makes Huntsville the perfect location, said Shep Nolen, president of CBI Construction Services, Capstone Communities’ in-house general contractor for the project.

“We’re thrilled to enter such a promising market and support the city’s economic development efforts by creating additional jobs as Huntsville prepares for its next chapter of growth.”

Construction financing is being provided by Trustmark National Bank and Renasant Bank.

Reed Submits Apparent Low Bid of $14.3M for I-565 Widening Project

Huntsville’s Reed Contracting is the apparent low bidder to widen and resurface Interstate 565 in Limestone County.

The Alabama Department of Transportation opened bids for the project, one of the first major projects funded by the Rebuild Alabama Act.

Reed Contracting’s bid was $14,312,713.82. Bids must undergo review before the contract will be awarded through an expedited award process and the winning contractor given notice to proceed. Work is anticipated to begin in June or July.

The winning contractor will be incentivized to complete the project prior to Dec. 17, 2021, receiving $25,000 per day the project is complete ahead of that deadline, up to a maximum of 50 days and $1.25 million.

The project will resurface more than seven miles of I-565 from just west of Exit 1 (Interstate 65) to just west of Exit 7 (County Line Road). Paving on existing shoulders will expand the highway to three travel lanes in each direction.