Sunday, April 02, 2006

20 years later, Galleria remains Hoover, AL retail star

Special to The Birmingham News

HOOVER, Ala. - When Jim Wilson Jr. built the Riverchase Galleria, he had no idea just how far its impact would reach - not only on the city of Hoover, but way beyond its borders.

"It's much more than anyone imagined, with over 14 million visitors a year," said Wilson, president of Jim Wilson & Associates in Montgomery. "It's also been a catalyst for growth in the city of Hoover."

The giant shopping center opened in February 1986, only a few months after the Interstate 459 loop was finished. Birmingham's Harbert Construction Corp. was general contractor on the project, which cost $161 million to complete.

The timing was right: Many people were moving over the mountain, creating an ample market for the mall's merchants. As a result, the Galleria acted as a catalyst that helped make Hoover what it is today: a large, financially successful suburban city.

The Galleria generates approximately 25 percent of the city's sales and use tax revenue each year, which totals $52 million, according to city officials.

Such success has been good for everyone. "It's good for merchants, but it's also good for the fabulous influx of revenue that goes into numerous coffers," said Robert Robicheaux, executive director of marketing and industrial distribution for the UAB School of Business. "It's made it possible for the city of Hoover to build the schools they have."

And it filled a niche for shoppers who formerly had to travel to Atlanta for the latest fashions and other items. "Once it opened, it filled that need," says Kay Yarbrough, director of marketing and public relations for Jim Wilson & Associates. "Upper-income customers had a convenient place to go."

Hoover Mayor Tony Petelos said the Galleria has been an integral part of the city's growth. "It's an incredible draw and it's growing and thriving," he said. "It has a huge impact on our metro area and generates the most sales tax in Hoover. You look at a shopping center that is 20 years old, it usually starts to decline, but that isn't the case with the Galleria. It continues to do a great job."

For his part, Wilson said he waited to develop the mall until the interstate was finished in the area. "It was just out in the woods back then," he said of the two parcels that would be developed. "When we started building, the biggest fight we had was over the skylight - it cost an extra $6 million and my partners didn't want to spend it, but I said it would set us apart. It gave the Galleria pizzazz and it's remained that way."

Aging gracefully:
Retail involves constant competition, and some predicted the Galleria's demise - or at least a slump - when Birmingham's Bayer Properties built The Summit off of U.S. 280. Others predicted The Summit would never make it because of the Galleria's close proximity. Both predictions were wrong, Robicheaux said.

"The law of retail is that the stores at The Summit actually help the Galleria and vice versa, because it makes the area an even more attractive destination for shoppers," Robicheaux said. "Most people who come from greater distances will shop at both centers. The more shopping you can bring together in a small space, the greater the pull from the outside area."

Even so, the Galleria has had to change with the times, especially in view of the "lifestyle center" trend in retailing that is exemplified by The Summit, an open-air collection of upscale stores designed so shoppers can park their cars near the front doors of the shops they're interested in.

The Galleria's success also has launched a slew of shopping centers around it, including Patton Creek, a lifestyle center developed by Birmingham's AIG Baker Shopping Center Properties that is located right in the mall's shadow.

The Galleria has fought back with new retail names such as Hollister, a trendy retailer of California-style clothing; Sephora, which sells name-brand cosmetics and fragrances; Swarovski crystal and new restaurants such as Shula's Steakhouse, Ted's Montana Grill and California Pizza Kitchen. The mall got a new anchor in March when Belk opened in the former Proffitt's space.

"Each time they build a square foot of retail space around us, it dilutes us," Wilson said. "Retail is always a fight - and we continue to fight and get our share of the very best tenant mix."

In May 2004, Wilson sold half of his interest in the Galleria to Chicago-based General Growth Properties, which owns or manages 275 malls throughout the country, including Birmingham's Century Plaza. General Growth also took over the Galleria's management.

"General Growth is first class," Wilson said.

Even with all the changing and rearranging throughout the years, the Galleria is a big part of Hoover's history, said Tracy Gatewood, a marketing manager for General Growth.

"This property has a special place in the history of the Hoover area," Gatewood said. "Kids have grown up coming to this mall, ridden on the carousel and met their friends. It's just like Hoover's downtown."

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