COVER STORY, SEPTEMBER 2006

GREAT EXPECTATIONS
Economic development teams see bright future.
Daniel Beaird

Depending on a city or town’s location, its means of building a dependable economy for itself can vary greatly from another town’s process. Southeast Real Estate Business recently sat down with economic development planner from three different cities across the region. Each city is witnessing an upturn in its economy, but they are doing it in very different ways. Alexandria, Virginia, has one of the most knowledgeable workforces in the country. Macon, Georgia’s industrial market is benefiting from its prime location between Atlanta and the Port of Savannah. Finally, Lauderdale Lakes, Florida, is choosing the benefits of mixed-use development as land becomes more and more scarce in South Florida. 

Alexandria, Virginia

The United States Patent and Trademark Office in Alexandria, Virginia, displays the city’s knowledgeable workforce. Many federal agencies do business in the city.

Alexandria is located inside the Beltway just across the Potomac River from Washington, D.C., and is in close proximity to Ronald Reagan Washington National Airport. The area’s economy is driven by a large technology industry, the fourth-largest concentration of professional associations in the country and the tourism industry.

“The lifestyle in Alexandria attracts economic development,” says Mike Stuart, economic development marketing specialist for the Alexandria Economic Development Partnership (AEDP). “The development climate in the area is fantastic. We are seeing tremendous interest in Alexandria and its not centric to one area.” The AEDP is a public/private partnership between the city of Alexandria and the business community. It assists businesses and targeted industries with information regarding the availability of sites and facilities, office and retail space, and economic and demographic statistics for Alexandria.

According to Stuart, Alexandria, while being a very historic area, is one of the most wired cities in America; has one of the best electronic city governments; and offers free WiFi circles in the downtown area. The balance between old and new is a challenge facing Alexandria on a daily basis. “Alexandria’s outlook is very progressive regardless of how many older buildings might be here,” Stuart says. “The technology industry is emphasized here, so the city works hard to make sure it has a vibrant tech sector and is at the forefront of new trends in technology.” Alexandria paved the way for the U.S. Patent and Trademark office through brownfield redevelopment of a vacant railyard.

The largest redevelopment in Alexandria is Centex Homes’ and Pulte Homes’ redevelopment of Potomac Yard. Centex Homes and Pulte Homes purchased the 167-acre site, ranging from the Arlington County line to Monroe Avenue, from Crescent Resources. A mixed-use development is planned and it will consist of 1.8 million square feet of office space; 135,000 square feet of retail in addition to the existing 600,000-square-foot Potomac Yard Shopping Center; a hotel with approximately 300 rooms; and 1,973 residential units. Development conditions include the realignment of the Route 1/Monroe Street bridge and dedication of major public open space areas for both passive and active recreation.

As Alexandria strives to attract new businesses to its city, it also has set up a program to help its current tenants. The façade improvement program is an initiative funded through AEDP in collaboration with the city of Alexandria’s Department of Planning and Zoning. The program provides commercial property and business owners in the targeted areas matching grants of up to $1,500.  “The boundaries of the program extend to King and Queen streets,” Stuart says. “Our program is designed towards small businesses that need small improvements like new signage and landscaping work. A small business owner may not have the kind of money needed to make those improvements right away.” The façade improvement program began in 2002 in Alexandria’s enterprise zone along Mount Vernon Avenue. It was such a success that it has been expanded citywide this fiscal year.   

Alexandria wants to attract not only federal agencies and contractors, but small businesses and associations as well. Associations and non-profit organizations can take advantage of Alexandria’s exemption from gross receipt taxes on business-related revenues. They are also eligible to use the industrial development authority bond financing program to purchase real estate. Technology companies in Alexandria are exempt from taxes on research and development activities; and international companies can benefit from Alexandria’s close location to Ronald Reagan Washington National Airport.

Macon, Georgia

Kohl’s Department Stores decided to locate their distribution center in Macon, Georgia, in 2002, and since then, Macon has become an industrial destination in the Southeast. “Once Kohl’s located its 588,000-square-foot distribution center here developers began to look at Macon,” says Pat Topping, senior vice president of the Macon Economic Development Commission. “It was the first large project in Macon in quite a few years.” For Kohl’s, it came down to Macon or a town in Alabama; and when Georgia’s governor, Sonny Perdue, dedicated $700,000 from the One Georgia fund to site work in Macon, Kohl’s made its decision.

Since then, Sara Lee has located a 213,000-square-foot distribution center in Macon, and Bass Pro Shops has located a 450,000-square-foot distribution center there. “Before Kohl’s came to town Macon was risk to investors,” Topping says. “Now, as investors look further south, Macon is a lower risk than some other cities.”

The city’s location helped attract some of those industrial players. Macon sits at the junction of Interstates 75 and 16 with direct access to Atlanta and Savannah. With one of the nation’s busiest airport just to the north and a major Southeastern port to the east, Macon has taken advantage of its prime property. Macon has begun to experience some of the industrial development growth that McDonough, Georgia, a southern suburb of Atlanta, has experienced in the past. According to Topping, the lower rental rates in Macon were a major factor in Sara Lee’s decision to locate its distribution center there.

Not only does Macon compete with other Georgia cities like McDonough, Savannah, Columbus and Augusta, but it also competes with Southeastern cities like Opelika, Alabama, and Greenville and Greenwood, South Carolina. And while those other cities have much to offer, Macon is home to Central Georgia Technical College, Georgia’s largest technical college. “The college does a super job of training Macon’s workforce on an ongoing basis and it can gear up when a Sara Lee or Kohl’s comes to town,” Topping says.

The industrial market has had its biggest year this year. “We have had 10 announcements that will create more than 650 jobs and will invest $153 million into Macon just through July,” Topping says. “That’s compared to 510 jobs and $70 million in investment all of last year.” Topping believes that the economy is picking up and industries that have been putting off industrial space for a few years are beginning to get back into the market.

About one quarter of Macon’s workforce drives into the city on a daily basis from surrounding counties. Therefore, the residential market has boomed outside of Macon. The retail market is expanding as well. Bass Pro Shops has attached a 130,000-square-foot retail store to its distribution center in Macon, the first of its kind. “The excitement about Bass Pro Shops retail store and 3 to 4 million visitors it receives every year has caused retail developers to buy up all the land surrounding it,” Topping says. That is 400 acres, according to Topping. Macon also has a 750,000-square-foot mall that has been announced. “In the next 3 to 5 years, the corridor from Riverside Drive to Bass Pro Shops will see tremendous retail growth,” Topping says.

As development grows across all sectors in Macon, its main concentration remains the industrial market. It has targeted five industries including logistics, aerospace sub-assembly and maintenance, shared service operations, food processing, and automotive suppliers. Macon’s level of prospect activity is higher than it has ever been and there is no slow down in sight. “Macon has been able to make a good case for itself with a strong workforce and a terrific logistics location with close proximity to Atlanta’s airport and Savannah’s port,” Topping says. “Developers are looking to Macon as the next location for warehouse, light assembly and light manufacturing.” Macon has found its niche.

Lauderdale Lakes, Florida

In Lauderdale Lakes, Florida, like most cities in South Florida, the focus is on using the land it has to the best of its abilities. Land is scarce in South Florida, so the more people who can live, work and play in the same area the better. Several mixed-use projects have been proposed in Lauderdale Lakes  during the past few years, one of which has received numerous won awards from planning, urban design and real estate associations.

Bella Vista at Lauderdale Lakes is a 32-acre mixed-use project located on Oakland Park Boulevard in the new town center of Lauderdale Lakes. The project is being developed through a partnership between the Lauderdale Lakes Community Redevelopment Agency and developer United Homes International. It will be designed in the new urbanist style of redevelopment planning. A two-story Broward County Public Library will be the cornerstone for the development. The Lauderdale Lakes Cultural and Educational Center will be set at the center of Bella Vista. A town green the size of two football fields will anchor the project, surrounded by 551 luxury residential units. Bella Vista will offer more than 20,000 square feet of ground floor retail and office space. Amenities will include a 5,000-square-foot clubhouse with a fitness center, a party room, an indoor racquetball court, a half-court basketball court, a tot lot and an outdoor pool. “The city of Lauderdale Lakes has seen strong growth during the past few years and Bella Vista at Lauderdale Lakes will keep the momentum going,” says Celeste Dunmore, economic development officer for the city of Lauderdale Lakes.

Lauderdale Lakes has been growing due, in part,  to its Community Redevelopment Agency (CRA), which was established in 2000. The CRA invests Lauderdale Lakes’ property tax dollars back into the city’s redevelopment area. “Since this process has begun, the city has seen a huge increase in its property assessment value both within the CRA and the city overall,” Dunmore says.  This year, the CRA experienced  a 16.2 percent increase in property assessed values and the city of Lauderdale Lakes experienced a 21.3 percent increase in property assessed values. “This increase was higher than Broward County’s increase” Dunmore says.

In terms of development, the city is focusing on the retail, medical, service and technological industries to meeting the growing needs of the community. Lauderdale Lakes does not compete directly with cities that surround it like Fort Lauderdale, Florida, for example. “Our demographics are similar to Fort Lauderdale, and both cities are located in Broward County” Dunmore says.

Lauderdale Lakes in some instances has taken the lead in planning for growth and development.  Lauderdale Lakes is in the process of establishing a local activities center to encourage greater density, mixed-use facilities, pedestrian friendly communities, enhanced public transportation, opportunities for employment, shopping and recreation within the LAC. The city, as mentioned before, is also establishing a town center at the intersection of State Road 7 and Oakland Park Boulevard, one of the heavily traveled roadways in Broward County. The town center plan accommodates many uses, one of which has already been acquired by Wal-Mart. The plan is in place to transform aging suburban strip malls into a vibrant community center. 

The city of Lauderdale Lakes has taken bold steps to realize its vision.  In 2004, Lauderdale Lakes residents supported a $15 million general obligation (GO) bond for improvements to include new bus shelters, new parks, new landscaping, street resurfacing and other projects. New land development regulations have been established to guide future development and growth. As Lauderdale Lakes grows, the development of mixed-use projects like Bella Vista at Lauderdale Lakes can only help attract more developers to the city. The high demand for live, work and play communities is being met in Lauderdale Lakes. “Developments like Bella Vista will lead to significant economic impact during the next 3 to 5 years for Lauderdale Lakes,” Dunmore says. 

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