The Highlands of Spanish Fort
Spanish Fort,AL
Highland Land Holdings (an affiliate of ALH) and a real estate fund managed by Inland Capital, hold over 4,100 acres of land within the Highlands of Spanish Fort Planned Unit Development (the “Property”). HLH is the master developer of the PUD.
Spanish Fort is located in Baldwin County, Alabama and is part of the Mobile MSA, the 8th fastest growing Metropolitan Statistical Area in the country. The Mobile MSA is one of the strongest economic growth areas in the country. An influx of people, including retirees, has driven exceptionally strong population growth over the past decade. Housing affordability and convenient access to the white beaches of Alabama and Florida's Gulf Coast, coupled with a transportation infrastructure supported by two interstate highways, have attracted new residents from all over the country. Residents of the 1,613-square-mile county have easy access to job bases in Mobile, AL and Pensacola, FL. Major employers in Mobile, AL area include, Austal USA, the Port of Mobile, Airbus U.S. Manufacturing, and the Navy Federal Credit Union. These continue to create jobs and facilitate the growth of a strong housing market in Mobile and Baldwin County. Other leading county employers include a mix of midsize service, retail, and manufacturing firms, as well as health care and government-related operations. In addition, the tourism industry is a major component of the overall economy, attracted by the presence of numerous golf venues, beaches, quality accommodations, renowned resorts, shopping, and many other amenities.
The property is conveniently located within minutes from Interstate 10 and the Eastern Shore Centre, a 540,000-square-foot lifestyle shopping center. The tract adjoins the Spanish Fort Middle School and the recently constructed, state of the art, 53-acre City athletic facility, and is five minutes away from the Spanish Fort High School. The property is only an hour from Gulf Shores and Orange Beach, but situated on historically high ground, which eliminates the risk of storm surge or flooding from hurricanes. The property includes approximately 12,500 feet of streams, abundance of live oaks, rolling hill topography, and soils highly suitable for development.
History of the Property: The Property is part of an 11,000-acre tract of timber property that International Paper had owned since 1975. In the early 2000’s, IP took the initiative to identify and develop those portions of its land holdings that had highest and best uses that differed from its standard timberland portfolio. IP concluded that the demographics and development potential for Mobile and Baldwin County were very strong. Its Real Estate Development Division then began immediate zoning, entitlement and development of the full 11,000-acres. IP and the City proceeded with the improvement of the two major intersecting roads through the lower portion of the property (Bromley Rd and Jimmy Faulkner Drive), which provide access from US Hwy 31 (four miles) and Interstate 10 (five miles), and provide easy access for utilities. IP also reserved sufficient sewer capacity to serve the Property from the privately held Baldwin County Sewer Service.
In 2007, with entitlements nearing completion, IP retained a nationally recognized real estate advisory firm to perform a market feasibility study for the proposed development. The advisors investigated the market area of the property, specific development opportunities, potential land values, and necessary investment in infrastructure. The findings of the analysis, as of July 2007, indicated potential sales in the regional market of 6,282 lots/homes per year and concluded that the site could obtain a 16% market share of this total, equating to sales of 1,005 lots/homes per year.
IP decided to proceed with the full development of the property and later in 2007, the 11,000 acres were annexed into the City of Spanish Fort as a Large Scale Planned Unit Development (PUD) entitled for a total of 29,964 residential units.
The PUD represented a residential community with a mixed-use village component consisting of:
¨ Single-Family—27,309 units
¨ Multi-Family—1,150 units
¨ Mixed-Use Village Residential—1,505 units.
An Inland Capital Management sponsored real estate fund entered into a joint venture with Rock Creek to develop 2,129 of the 4,100 acres in 2017. In December of 2017, that Fund placed approximately 1,660 acres into a permanent conservation easement with the remaining 440 acres at the crossroads where the village center will be. This 440 acres and the approximately 2,000 acres held by HLH will be developed into a highly amenitized master planned community known as the Highlands of Spanish Fort as described below.
The City of Spanish Fort has built a 53-acre multi-million-dollar athletic facility on Jimmy Faulkner Drive adjacent to our proposed village center. This City recreational facility, together with the adjacent planned community amenity areas and commercial village, will anchor the Highlands of Spanish Fort (HOSF) development.
The Market:
Coastal Alabama has always been an attractive real estate market due to its affordability, warm climate and the pristine white sand beaches of the Gulf of Mexico. Historically, development of the area started at Gulf Shores, where it was dominated by tourist attractions and vacation rentals. Over the years, development went up the coast from Gulf Shores, through now, fully developed, Fairhope and Daphne, to the City of Spanish Fort.
Spanish Fort, located in Baldwin county, is the closest city to Mobile (10 min away across Mobile Bay). Mobile, the oldest city in Alabama, in recent years has become a major employment hub. The Port of Mobile is the twelfth busiest port in the country and home to the headquarters of several large businesses. The Mobile Metropolitan Statistical Area consists of Mobile and Baldwin Counties and around 600,000 people. Baldwin County is the fastest growing county in Alabama. Spanish Fort has an estimated Median Household Income in 2015 of $75,279 (compared to Alabama’s $44,765). Estimated Median House / Condo Value in 2015 was $253,415 (as compared to $150,200 in 2000). Estimated Median House / Condo Value in 2015 for the State of Alabama was $134,100.
Mobile:
Founded in 1702, Mobile is one of the oldest cities in the US. Six different flags have flown over the city: French, Spanish, British, Republic of Alabama, Confederacy and the United States of America. Known for streets lined with massive live oaks, Mobile, Alabama is a picturesque city at the mouth of the Mobile River at Mobile Bay, leading to the Gulf of Mexico. With a 2015 estimated Census population of 619,104, the Mobile Bay region is Alabama’s second largest metro area. Mobile County, the second-largest county in the state, has 415,395 residents. Baldwin County’s population is 203,709 and has increased more than 12 percent since 2010, making it the fastest growing county in Alabama. The population for the city of Mobile is 194,288.
Over the last decade, Mobile’s economic development efforts garnered $8.47 billion in capital investment and 15,771 jobs at new and existing area companies.
Mobile is home to more than 31 aerospace companies. In 2015, Airbus established its first production site in the U.S., the Airbus U.S. Manufacturing Facility in Mobile, AL. The $600 million, 53-acre assembly plant is located at Mobile Aeroplex at Brookley. The Airbus assembly plant makes Mobile the fourth city in the world and the only city in the U.S. to assemble the A320 aircraft family. The facility is drawing continued investment from Airbus suppliers and service vendors, including Safran Engineering Services, Hutchinson, MAAS Aviation and UTC Aerospace. At this time, there are 510 employees at Airbus’ U.S. Manufacturing plant, with 1,000 more workers expected to be added in the next couple of years.
Austal USA, an industry-leading defense contractor, designs, manufactures and supports innovative, high-speed aluminum ships. It started operations in Mobile in 1999 with under 100 employees on a 14-acre facility that consisted of a 90 x 60 assembly bay fronted by a 380-foot wharf. Over the years, over $400 million has been invested in the expansion of Austal's state-of-the-art ship manufacturing facility and the company has grown to a staff of over 4,000.
Mobile is the largest Gulf Coast city between New Orleans and Tampa. The Mobile-Tensaw River Delta is the second largest in the U.S.. Mobile Bay is the fourth largest estuary in the nation.
When it comes to infrastructure and extensive transportation options, Mobile leads the way. The city’s strategic location on the central Gulf Coast and abundant transportation options keep commerce moving and growing. Major rail, ship and highway transportation systems converge along the Mobile River at the Port of Mobile to link Mobile businesses with the nation and the world. In addition to a deep-water port, Mobile has two major interstate connectors, five Class I railroad service providers and two airports.
Over the past decade, the Alabama State Port Authority has invested more than $700 million on facilities at the Port of Mobile, including a container terminal, a steel terminal, expansion at McDuffie Coal Terminal, a rail ferry terminal, new warehouses and a turning basin. The 45-foot ship channel with its 1,000-foot turning basin is only three hours from deep-water. APM Terminals-Mobile, a state-of-the-art marine terminal, is PostPanamax capable and offers global access to shippers. The Alabama Cruise Terminal features a 66,000-square-foot terminal, state-of-the-art security and an attached 500-space parking deck with easy access to Interstates 10 and 65. The terminal is the home port for the Carnival Fantasy cruise ship.
Baldwin County:
The Property is located in Baldwin County, the largest county in Alabama by area and the fastest growing county in the state. With a land mass larger than Rhode Island, Baldwin County features no single large metropolitan area. Instead, the county consists of multiple smaller cities and their residential surroundings.
The northern half of the county has remained quiet and largely rural. However, the southern half of the county, from Spanish Fort to Daphne and Fairhope, across to Loxley, Robertdale and Foley, and down to Gulf Shores and Orange Beach, is exploding.
According to statistics provided by the Baldwin County Association of Realtors, the county has experienced a 39 percent increase in the number of residential properties purchased since 2011. During that period, sales in each new year exceeded the previous one. The average days on the market for a house in Baldwin County was 169 in 2011 and 173 in 2012, falling to 158 in 2014 and 145 in 2015. At the same time, the median sales price went from $190,000 in 2011 to $233,007 in 2015.
A low crime rate, great real estate choices and affordability drive interest in the county from all over the U.S. The construction of new subdivisions is especially active on the Eastern Shore, namely in and around Spanish Fort, Fairhope and Daphne.
The proximity to Mobile is obviously a bonus for the Eastern Shore. Spanish Fort is the closest city to the major employers of Mobile and is perfectly positioned right across the bridge over the Mobile Bay.
With its fast growing population, the county is experiencing overpopulation of some of its 45 schools. The school system estimates its growth rate at 500 students per year. The countywide school system enrolled 16,000 students in 1985-86. In 2016, enrollment was over 31,000. Since development started from the coast up, schools in the southern cities have become the most overpopulated. In contrast, several new schools were recently built in Spanish Fort, making the area one of the most desirable for families with school-age children. The subject property adjoins the newly built Spanish Fort Middle School, which has a perfect 10 rating and has capacity for 848 students.