In a relatively rare development for Birmingham’s industrial market, one of the city’s largest commercial real estate firms is working on a speculative construction project.
Graham & Co. is taking steps to redevelop a 9.23-acre brownfield site near Sloss Furnaces for two new facilities that would drive industrial activity in the area.
Dubbed “Project Car Yard,” the development would include a 117,000-square-foot distribution-style warehouse at the current Johnny Spradlin Auto Parts salvage yard on Messer Airport Highway, as well as a 15,200-square-foot facility at the corner of Seventh Avenue South and 31st Street North next to Sarris Restaurant.
It’s a $12 million project with an estimated cost of $9 million to $10 million for the larger facility and about $2 million for the smaller one. A Graham & Co. affiliate has the site under contract and expects to close on the property in late spring or early summer.
Sonny Culp of Graham & Co. said the site has been used as an auto salvage yard for about 60 years, and current property owner Spradlin Auto Salvage is removing the cars from the site to be recycled.
Graham & Co. is in talks with some prospective tenants and expects to start construction in the fall, Culp said.
“This is a great opportunity for the economic development community with a modern reuse in a needed category of development,” said Henry Graham of Graham & Co. “Best of all, the aesthetics of the immediate area will change greatly.”
The project is estimated to have a more than $1.8 million economic impact on the city with direct and indirect revenues over the next decade. More than 100 temporary construction jobs would be created in addition to the potential for more than 100 full-time permanent jobs on site.
While doing its due diligence, Graham & Co. said it identified several geotechnical and environmental challenges to the site. The firm is applying for various incentives from the city of Birmingham to help make the project a reality, including brownfield sales/use and property tax abatements. Graham & Co. also is requesting the Birmingham Industrial Development Board take title to the site to facilitate various grants, and it is requesting the city make several safety and road infrastructure improvements by the site.
“We have been working hard to solve the development challenges and are excited to where it is leading us,” Graham said.
The proposed project comes at a time when Birmingham’s industrial market is posting low vacancy rates and high market rents. Coupled with the city’s perennial challenges with topography, high construction prices have kept new developments to a minimum. Increased real estate activity in hot spots like the Parkside District also is driving industrial businesses to look for new space as they relocate.
“This is a unique opportunity to redevelop a large site in Birmingham’s core industrial market,” Culp said. “There has not been a pure speculative building built in this market in a long time, and this is a great place for it.”
The project is a sign of the strength of the city’s industrial sector, which has seen several large sales and new developments, including a new $29.75 million metal tube fabrication facility off Pinson Valley Parkway also by Graham & Co. for Samuel Son & Co.