UPDATE: Written by ACRE Research for Alabama NewsCenter.
Reminders of Birmingham’s industrial past dot the city’s landscape. Vulcan, the largest cast iron statue in the world, sits atop Red Mountain. Sloss Furnaces ceased its pig iron operation in 1970, but it is now a historic landmark and entertainment venue that hosts an annual music festival, Sloss Fest.
Adaptive reuse has contributed greatly to Birmingham’s revitalization as economically obsolete buildings are transformed to meet the demands of the modern-day real estate market. Adaptive reuse, however, is not just about renovating buildings. One of the more innovative examples is Birmingham’s Rotary Trail, which created an urban greenscape in the most unlikely of places, an abandoned rail tunnel along First Avenue South.
The “railroad cut” was a reminder of Birmingham’s industrial past when both people and goods moved via train. It was quite obvious that refurbishing the four-block-long cut was an expensive undertaking.
Birmingham’s Rotary Club was looking for a centennial project in 2013, and its timing turned out to be perfect. The club helped raise $3.5 million for the project, and a once-desolate stretch of rail bed was transformed into an inviting, communal green space. And the railroad cut just happened to be on the eastern side of Railroad Park, so the Birmingham Rotary Trail was a natural extension of the green revolution happening downtown.
The Birmingham Rotary Trail was visionary on many levels. For starters, there is no profitable use for an abandoned rail bed, so the traditional path of private redevelopment was extremely unlikely. For it to work, it had to be a civic-type venture, so enter the Rotary Club.
It was also visionary for its environmental impact on the downtown area. Sitting at one of downtown’s lowest points, the railroad cut drew runoff from the city streets, and polluted stormwater would find its way into a close-by creek. Created in partnership with the Freshwater Land Trust, the new design diverts stormwater, and flooding is no longer an issue.
Another visionary aspect of the Rotary Trail is that it is not an isolated project. It is a part of the Red Rock Ridge & Valley Trail System, a long-term plan that aims to connect Jefferson County with greenways, trails and more pedestrian- and bicycle-friendly streets. Additionally, it is a unique case of infill, as the most marginal of lands, an abandoned rail bed, is no longer a liability and an eyesore but instead an award-winning green space for the Magic City’s residents.
K.C. Conway, director of research at the Alabama Center for Real Estate and CCIM chief economist, believes this is just the beginning of a new era of adaptive reuse, particularly in secondary and tertiary markets. He examines this trend in a white paper entitled “Adaptive Reuse: Turning Blight into Bright,” which represents the first step to redefine and quantify the adaptation of obsolete commercial properties for new uses as an institutional-grade product category.
“We predict that adaptive reuse projects will make up a greater percentage of investment activity than self-storage and other select non-core property types by 2023,” says Conway. “But the commercial real estate industry’s understanding of this property segment isn’t keeping up with this growth.
“We are now helping to innovate a new data platform that will allow us to assign key indicators to the category, including dedicated vacancy and absorption numbers, as well as cap rates and IRR. This will be an important next step in raising the product type to institutional-grade and helping it to go beyond equity capital to attracting debt lenders.”
The full report, produced jointly by the CCIM Institute and the Alabama Center for Real Estate, can be downloaded for free at www.ccim.com/insights.
Categories: Local Scenes Stuff