Creating tech hot spots: Hoover hopes to transform Meadow Brook, Inverness office parks into mixed-use innovation centers
As the office market deals with high vacancy rates, Hoover officials are developing strategies to help re-energize and potentially transform some of the city’s office parks into mixed-use centers, particularly in the U.S. 280 corridor.
The city is focusing on Meadow Brook Corporate Park and Inverness Center North, both of which have large office buildings available for lease, with a total of more than 600,000 square feet of vacant space, according to property owners and the city.
Meadow Brook Corporate Park has about 281,000 square feet of vacant office space, said Greg Knighton, the city of Hoover’s economic development manager.
Slightly west, Inverness Center North has two completely vacant 150,000-square-foot buildings and a third similar-sized building with about 35,000 square feet of vacant space, said Randy Thomas, executive president for NAI Chase Commercial, the leasing agent for the owner, In-Rel Properties.
Despite a challenging office market, Hoover economic development officials say they see potential ways to make those office parks more attractive so the existing tenants can expand and building owners can reel in tenants and jobs that help stimulate the economy.
City officials have identified five target growth sectors: information technology, life sciences, freight and logistics brokers, automotive research and development, and corporate headquarters.
There is a strong desire to amp up Hoover’s technology sector, but to do so, economic development officials say some adjustments may be in order.
The large, legacy office parks built in the 1980s and 1990s were good for a season, but many companies today are looking for something different, said Knighton, who has been in the industry for nearly three decades.
Instead of being surrounded by trees and isolated from other businesses, many technology companies of today are looking for innovative campuses in high-density areas where their employees can interact and collaborate with other technology workers, Knighton said. They want to be surrounded by innovative startup companies that create disruptive technology and knowledge spillover from one business to another, he said.
Many companies today want to have a lot of amenities close by, within walking distance for their employees so it’s easy to walk downstairs and go to a coffee shop, restaurant, gym or retail store, said Jackson Pruett, an economic development coordinator for the city.
“STEM (science, technology, engineering and math) workers want amenities,” he said. “If it’s not a cool environment in which to work, they might prefer to work from home.”
Pruett added that many technology companies attract young professionals who like the idea of living within walking distance of their jobs, so providing housing alternatives in close proximity also is a need.
“This is a really cool opportunity to bring innovation-minded economic development and commercial real estate together,” he said.
If the city can work with current property owners to create a cool, dense, mixed-use space, it will help support the technology companies that already are there so they can continue to attract knowledge workers and simultaneously give economic developers something to attract companies that currently are outside the market, he said.
“We’re not just generally selling the city, but we’re selling specific nodes of innovation and technology that we think could be a really competitive advantage for us,” Pruett said. “It gives this park or other areas of the 280 corridor a unique identity as an innovation center for the region, which is a huge need.”
The good news is that Meadow Brook Corporate Park and Inverness Center North already have some of the outdoor amenities that companies like, such as lakes and walking trails, Knighton said.
Also, the 35242 zip code that includes Meadow Brook and Inverness has the highest concentration of technology workers in the entire Birmingham-Hoover metro area, he said.
What’s missing right now is the housing component and easy, quick access to restaurants, coffee shops and services such as a gym or dry cleaners, he said.
At Meadow Brook Corporate Park, there are a lot of restaurants and retail opportunities directly across U.S. 280 in Brook Highland Plaza, but getting there on foot or in a vehicle isn’t the easiest task, especially with new modifications to U.S. 280 that eliminated one of the direct crossover points, Knighton said.
Having those kinds of amenities mixed in on the Meadow Brook Corporate Park campus could be a huge selling point, he said.
“Building an environment like that is super critical,” Knighton said. “Employers and employees crave that sort of atmosphere. You’ve got the workforce built in. You’ve got the bones built in. It’s really taking an office park that has great bones and adding amenities to it.”
The city’s comprehensive plan that was approved in 2019 advocates the idea of taking some of the unused parking areas and green spaces in Meadow Brook Corporate Park and adding housing and retail amenities.
Now, it’s time to take a deeper dive into that mindset and see what it would really take to make that a reality, Knighton said.
Knighton favors starting with Meadow Brook Corporate Park because that park already is seeing a lot of momentum with the recent addition of companies such as McLeod Software (which already has close to 600 employees on site) and Lake Homes Realty (which plans to add about 350 jobs there).
“If we want to build on this innovation, there’s a real opportunity to take that park to the next level,” Knighton said.
The city’s Industrial Development Board and new Commercial Development Authority have advised Knighton and his team to move forward with finding a leading real estate and economic development advisory firm to develop a more specific market analysis and business plan.
The Hoover City Council set aside some money in the city’s 2023 budget to help pay for such a study, but Knighton said Shelby County’s economic development agency, 58 Inc., and landowners and existing tenants in Meadow Brook Corporate Park could be potential funding partners.
Knighton said he has been encouraged by his conversations with some of the property owners thus far.
“These property owners are very interested in seeing a metamorphosis occur in their locations to include mixed-use activities and more connectivity and activities to create a technology ecosystem,” he said.
SDM Partners, an Atlanta-based real investment firm, bought four of the large office buildings in Meadow Brook Corporate Park about five years ago. SDM sold the 145,000-square-foot 100 Building to McLeod Software and renovated the 128,000-square-foot 1200 Building and leased about 90% of it, said Steve Martin, the managing principal for SDM Partners.
The 135,000-square-foot 500 Building, formerly home to Blue Cross and Blue Shield of Alabama, has about 45,000 square feet still vacant, and the 101,000-square-foot 300 Building, also formerly used by Blue Cross and Blue Shield of Alabama, has been vacant about 10 years, Martin said.
Martin said his company is on board with the idea of transforming Meadow Brook Corporate Park into more of a mixed-use center that includes housing and retail options. SDM Partners already is exploring the idea of tearing down the 300 Building and redeveloping the 5.9-acre site for multi-family housing, he said. They’ve been bringing in food trucks for office tenants in other buildings but would love to have a food hall or coffee shop on site, he said.
INVERNESS CENTER NORTH
Inverness Center North has been mostly vacant since Southern Company Services vacated its three office buildings there around 2017 to move to the Colonnade.
In-Rel Properties bought the office park at auction in July for about $16 million, said Thomas of NAI Chase Commercial. That was a bargain considering the previous owner bought it for $68 million, he said. In-Rel paid about $36 per square foot, and comparable office properties in the Inverness area are selling for $140 to $160 per square foot, he said.
Now, there are two completely vacant 150,000-square-foot buildings and a third building with one tenant —FIS (a financial technology firm) occupying about 115,000 square feet, said Thomas of NAI Chase Commercial.
As of late October, there was one new potential small tenant considering a lease for that building and about 16,000 square feet of available space left on the first floor, he said.
Thomas said NAI Chase Commercial and In-Rel share the same ultimate goal as the city of Hoover for Inverness Center North — to bring in new amenities for the campus to attract tenants. Potential ideas include restaurants, an ice cream shop and other retail and service establishments, he said.
However, the owner is not interested in eliminating any of the existing parking lots at Inverness Center North, Thomas said. “We need that parking for the buildings once we’re fully occupied again,” he said.
Instead, In-Rel Properties would favor using about 10 acres on the Inverness Center North campus that originally was planned for a fourth building as space for some type of retail center, Thomas said.
“We have no intention of building a fourth office building,” he said. “There’s a better use for that dirt.”
In-Rel first must get approval from the group that controls the overall Inverness development plan and then come to the city for zoning changes that would allow a new type of development, he said. Thomas said In-Rel hopes to have a request to the city within the next five months.
Knighton said what Hoover officials are proposing is nothing new. It has worked in other markets such as Oklahoma City; Newton, Mass.; and Richardson, Texas, he said. It’s just going to take a planned approach with both short-term and long-term strategies to get there, he said.
Eight or nine years ago, Inverness and Meadow Brook were seen more as being on the outskirts of the metro area, but with the growth of Chelsea and other parts of Shelby County, more and more businesses are looking south of Interstate 459 as potential relocation spots, Knighton said.
Hoover is seeing more inquiries now due to the footprint of the properties in the city and the talent base, he said. “There’s a lot of excitement about redevelopment in this city.”