December 16, 2015
By Michael A. Calvert
Downtown wasn’t a destination for hipsters 30 years ago, but now young people are on the sidewalks of downtown walking dogs, sitting at outdoor cafes, and heading to new bars and restaurants. Zyp bikes are everywhere. Now nearly 10,000 people live in lofts, condos, and new apartment buildings, and more than a dozen projects are under construction. Downtown and the Railroad Park area comprise the hottest real estate market in metropolitan Birmingham.
In 1986, Birmingham’s first loft apartment project, Wooster Lofts, was a bold experiment. There were no comparable projects in Birmingham. Developers, realtors, and bankers were skeptics. They said lofts work in New York and Chicago, but not in a southern city where leafy neighborhoods were close to downtown and suburban houses on large lots were only twenty minutes away. Besides, they said, “Don’t you know downtown is dangerous and in a long-term state of decline?”
The Pizitz Department Store, Loveman’s, Blach’s, and many other retailers had closed their downtown stores. Several corporations relocated to burgeoning office parks on U.S. 280. Even some lawyers, accountants, and other professionals left downtown. The streets were lined with 267 vacant buildings with empty show windows.
The clubs and restaurants that opened on Morris Avenue in the ‘70s closed after the murder of a U. S. Steel executive stoked fear of crime. Racial tension continued to cast a pall over the city. Some business leaders said, “Downtown is worn out and obsolete, and it will be necessary to build a brand new city south of Birmingham — over the mountain.”
How were the first loft apartments in Birmingham developed? A group of young professionals worked to pioneer downtown living with Operation New Birmingham, better known as ONB, a partnership between the city government and the business community to redevelop the City Center. In 2012, ONB became part of REV’s city-wide revitalization program.
When I was hired to lead ONB in 1982, I saw that downtown Birmingham had “good bones” – more intact blocks of historic buildings than other southern cities, so historic preservation became a key strategy for revitalization. There was potential for renovation of the large warehouses and factory buildings on Morris Avenue and First Avenue North near the railroad tracks. Solidly built around the turn of the century, these multi-story buildings had become obsolete for their original purposes.
Seattle’s Pioneer Square, Richmond’s Shockoe Bottom, and a few other downtown warehouse districts had been successfully adapted for offices, restaurants, and shops. After discussions with owners and tenants of the First Avenue buildings, ONB’s historic preservationist, Linda Nelson prepared surveys and reports to qualify the buildings for lucrative historic tax incentives although we did not know the future use of these aging brick buildings..
A few weeks later Linda, who also acted in local productions, flounced into my office well after the lunch hour one day and said, “I’ve got the answer for First Avenue. Stunning loft apartments on the upper floors with chic restaurants, craft shops, and jazz clubs on the first floor. I just had lunch with some cute, young architects and they’ve got sketches showing all this in First Avenue warehouses.”
“OK,” I said trying to conceal my skepticism with little effort and less success, “Great, but can they meet the building code? And what bank will finance them?”
Linda launched into a passionate monologue on our responsibility to save Birmingham’s rich architectural heritage for future generations.
The picture she painted certainly got my attention. I asked her to form a committee to explore the concept. She recruited her friend Dorothy Shaw, architects Bob Burns and Pat Gallagher, realtor Bo Grisham, homebuilder Patrick O’Sullivan, Pizitz comptroller Scott Shepard, and several other young professionals to pursue our vision for downtown living.
Their enthusiasm had quickly converted me to a committed advocate. They visited lofts in downtown Nashville and brought Memphis loft developer Henry Turley to Birmingham to share his success there with local bankers, developers, and realtors. ONB commissioned a survey of downtown employees that showed 12-26% would “seriously consider” living downtown and that translated to several thousand potential tenants.
Realtor Bo Grisham found a 3-story furniture warehouse in the 2300 block of First Avenue North owned by civic-minded Jim Head who agreed to give us a free one-year option to buy the warehouse. Soon the architects on the committee sketched plans for 15 apartments with parking in the basement and a sundeck on the roof. Scott Shepard prepared a pro forma chart of income and expenses showing a positive bottom line. A new corporation he and Dorothy formed would be the developer. High fives and cheers erupted at the committee meeting where all this came together in a few months.
Privately I worried that obtaining bank financing might make this project another lost opportunity that we would bemoan for years to come. Scott proceeded to arrange a meeting with a loan officer at SouthTrust Bank. We trooped into the office of the fresh-faced banker in a black, pin-striped suit and a gray silk tie. He appeared to listen intently to my introduction about ONB’s goals to revitalize downtown and the success of other cities with loft housing. Bob Burns presented his color renderings, Bo summarized the survey of downtown employees, and Scott spread the pro forma chart on the banker’s glass-topped desk. When Scott had finished presenting the debt coverage ratio and other technical criteria for financing, the banker asked no questions. An uncomfortable silence followed.
The banker cleared his throat, closed the thick folder we had carefully prepared, and said the bank supported ONB’s revitalization efforts, but unfortunately our project did not meet the bank’s underwriting requirements. Scott appealed for further consideration, but the banker just smiled like an undertaker, shook his head, and thanked us for coming to SouthTrust. As we shuffled toward the door, Dorothy turned and asked if anything would make him reconsider. He shrugged and said, “Maybe leases signed by creditworthy tenants.”
After a glum silence in the elevator, we emerged into the marble lobby and Bob Burns said, “Damn it, we all know people who would jump at the chance to live in a cool loft apartment, and our friends could easily fill these fifteen apartments. An impromptu meeting ensued in a corner of the bank’s lobby.
“I’ve got it! “ Linda said with a dramatic flair, “An open house at the warehouse. A leasing party! Why not?” We all agreed it was a great idea and pushed through the revolving door with renewed enthusiasm.
A date was set for the event. Then on a Saturday morning, the committee met in the warehouse to hand address 700 postcards to ONB members, friends, business associates, and a list of artists and supporters of the Museum of Art. Linda arranged for two kegs of beer and huge bags of popcorn from Sysco Foods. Scott scored a donation of three cases of wine from a vendor.
Bob and Pat reduced their floor plans to a page that could be copied and folded as a guide for the open house. Their renderings were mounted on easels. Bob outlined the proposed loft apartments with bright red tape on the floor of the warehouse and hung sheets of newsprint where the front door would be with the apartment number written in red. Linda positioned gift-wrapped boxes with slits for forms requesting information on leasing near the kegs, popcorn, and the exit.
On the evening of the open house a steady stream of people came into the warehouse. Some stayed on the first floor and socialized, but most climbed the stairs with the floor plans in hand and walked about in the spaces outlined with tape behind the newsprint ”doors.” After our last visitor left, we were delighted to find dozens of forms in the boxes. Some had notes of thanks and good wishes, but many had asked for leasing information. Several indicated which loft they wanted to lease. We were thrilled.
By the end of the week, Bo executed leases for all fifteen loft apartments and had a long waiting list. Jim Reed wanted one for his rare book business, artist Toni Tully rented a loft for her studio, and two photographers chose lofts with space for darkrooms beneath a sleeping platform. Bob Burns and his partner David Blake took a loft. Judy Thompson, Vice-President of Thompson Tractor, leased an apartment for out-of-town visitors.
Bo and Scott reported at a committee meeting that they had submitted the leases to our loan officer at Southtrust. Bo held up the loan commitment, and there was a round of applause.
Following a little celebration, Scott noted a name for the project was needed for the final application. Linda was prepared for this question and rose to address the committee.
“Gentlemen,” she began in her most formal stage voice, “Lou Wooster was a Birmingham heroine who saved the city in its early years. Madam Wooster and her ‘girls’ nursed the victims of a cholera epidemic after the young city’s respectable women fled to the countryside. Let us honor her contribution to our city by naming this building Wooster Lofts.” This nomination was accepted by acclamation.
As renovation proceeded, almost everyone was amazed and delighted by the success of Wooster Lofts. Bankers from SouthTrust and other banks, however, questioned the depth of the market as additional projects were proposed. They wondered aloud if more than a few people would live downtown, but they couldn’t ignore Wooster’s long waiting list. Two other loft projects were quickly announced.
Beginning in the late ‘80s, additional warehouses were converted to lofts. Realtor Michael Randman created Birmingham’s first loft condominium with apartments for sale on Second Avenue and bought one for himself. Developer Adam Cohen developed several loft projects.
Renovation of historic buildings for lofts continues today with the former Thomas Jefferson Hotel and the Pizitz Department Store currently under construction. New mid-rise apartment buildings are going up around Railroad Park and Lakeview. Restaurants, clubs, including Starbucks and Publix are coming downtown to serve the growing number of residents.
Beginning with Wooster Lofts in 1986, the thousands of hipsters living downtown are continuing to make downtown to a vibrant community. These days no one is talking about building “a brand new city over the mountain.”