Gulf Shores, Alabama... Developers ditch condos, ride commercial Waves

Developers ditch condos, ride commercial Waves

Gulf Shores businessmen whose project is one of nine with extensions expiring in October opt to build shopping center instead

Sunday, September 28, 2008

By KATHY JUMPER

Real Estate Editor

Three Gulf Shores businessmen dropped plans to develop 67 condominium units and are rebuilding their retail store bigger and better on 11th Street and W. Beach Boulevard in Gulf Shores.

Waves shopping center is under construction on 1.6 acres and will open by the end of the year, according to owners Marty Hoffman, his brother Johnny Hoffman, and builder Greg Kennedy.

The Hoffmans bought the property in 1996 and operated Waves Groceries & Beach Apparel, as well as a package store, there for a number of years until Hurricane Ivan destroyed the building in 2004.

After Ivan, the Hoffmans partnered with Kennedy on plans to build condo units, but put the effort on hold when the condo market stalled.

"We had hoped the real estate market would turn," Marty Hoffman said.

The group is one of nine developers whose approved condo proj ects got building extensions from the city of Gulf Shores good until Oct. 10. The extensions were granted in late 2005, allowing developers to build under old codes if they chose not to redesign projects to meet new zoning rules that limit density and building height on the beach.

Kennedy said his group doesn't expect the city to renew the extension next month.

The new zoning came about as part of the Envision Gulf Shores planning process following Ivan. Its aim is limiting the development options on Gulf-front parcels to prevent traffic congestion and a glut of condo towers, and to create a pedestrian-friendly downtown area.

Gulf Shores Councilman Robert Craft said he will not support another extension for that area, but noted that he is only one of six votes. The extensions expire before he takes office as the newly elected mayor on Nov. 3.

The extension just delays the Envision plan that was enacted four years ago by the citizens, Craft said. "That is a unique area of town, and in my opinion, that whole West Beach area should never have been zoned beyond a certain point for higher density residential."

The property is low and prone to flooding even in minor storms and there is only one way in and one way out, he added.

Building Waves made more sense, according to Kennedy. To construct condo units under the city's new density guidelines would have cut the planned number of units by almost two-thirds, he said. The partners had sold the project to a developer, but after Hurricane Katrina in 2005, an increase in insurance costs and a subsequent glut in condo inventory, the plans fell apart.

Instead, the group is investing $1.3 million in Waves shopping center, which is across the street from the beach.

The two-building center will include Waves, a 4,800-square-foot store that carries groceries, bait, tackle, beach apparel and features a 500-square-foot package store; Shakes Frozen Custard, which also has locations in Foley and Orange Beach; and a 3,100-square-foot restaurant with outdoor seating.

The restaurant has not been named but it will be operated by the owner of Sunset Cork Room on E. 2nd Street in Gulf Shores, according to Kennedy. There is plenty of interest in the remaining retail space, he said.

Waves is the last zoned commercial site on W. Beach Boulevard, which the developers view as a plus, according to Johnny Hoffman.

Kennedy added, "Every restaurant that's been there has done well."

/cut/3/cMIKE KITTRELL/ Staff PhotographerJohnny Hoffman, Greg Kennedy and Marty Hoffman are the developers of Waves, a commercial center under construction at 11th Street and West Beach Boulevard in Gulf Shores. The center's two buildings will include include a retail store, a Shakes Frozen Custard and a restaurant. The trio originally had planned to build condominiums.