Orange Beach - The Wharf

Giant residential-retail-entertainment development on track to be first of canal mega projects to open; Hank Williams Jr. gets the party started Memorial Day weekend with project amphitheater's first concert

Sunday, March 12, 2006
By KATHY JUMPER
Real Estate Editor

The Wharf's 11-story ferris wheel is ready to roll, and Hank Williams Jr. will get the party started with the first concert in the 10,200-seat outdoor amphitheater on May 27, the Memorial Day weekend in Orange Beach.

When it opens, The Wharf will be one of the first mega condominium, retail and entertainment developments on the south side of the Intracoastal Waterway next to the Foley Beach Express toll bridge. More than 500 workers at the 200-acre site are working to have many of the amenities ready to debut the last week of May.

"We've known from the get-go that once we were going vertical, that the lifestyle center would be the heart of Orange Beach," said Beason Wilkes, director of development for Birmingham-based AIG Baker. "It's a neighborhood and resort area. Sure, our business slowed down after Katrina. But in the last four weeks, it's been robust."

In fact, some of the buyers who were considering presale units in other projects at the Gulf are now interested in units at The Wharf, he said. Construction is well under way on The Wharf's first two condo buildings, where all of the 190 units were sold before Hurricane Katrina hit last fall. Prices averaged $400,000 in the first building a year ago, and recent sales in the second building averaged $550,000.

A combination of factors -- last year's active hurricane season, sluggish sales and more than 2,500 existing units for sale -- has caused many of the developers on the Waterway and the beachfront to step back and wait for the market to improve.

In February, developer Jim Mattei, a Mobile native, pulled the plug on Waterdance Resort, a 700-unit project on the north shore of the Waterway, citing poor presales.

Developers of the 507-unit Portage Crossing project on 16 acres on the north shore of the Waterway in Orange Beach had to find a new contractor after Hurricane Katrina hit last August, but the project is still on go, said Patrick Daily, owner of REMAX of Orange Beach.

All of the 507 units were reserved in one day last spring, but about 200 or so buyers backed out before the sales closed, according to Daily. Those units will be released again, but at a higher price, he said. The first units sold for prices between $400,000 and $800,000.

Riverwalk work to resume

Work on Riverwalk Orange Beach, next door to the Portage Crossing site, should resume within 30 days, according to spokesman Rebecca Wilson. That development includes Gulf World Marine Park, which is now set to open in spring 2007.
"We've added to our amenities and attractions and our project has gone from $85 million to over $300 million," Wilson said. "These improvements required complete architectural and engineering changes," which delayed construction.

There will be 1,100 condo units instead of 300, and the size of the convention center was increased to 68,000 square feet, she said.

"We're two-thirds sold in the first phase of condos, and as soon as we get to a comfort level with sales, we'll start construction," said Paul Wesch of The Mitchell Company, a partner in Riverwalk.

"In the near future, it's going to be The Wharf on the south, Riverwalk on the north and then slowly, a beautiful development at Bon Secour Village," Wesch said. "As those three projects mature and the market cycles up, we'll see other projects get going on the Waterway."

Work is under way on Bon Secour Village, a marina and mixed-use development on 1,000 acres off Baldwin County 4, with about one mile of frontage on the Waterway in Gulf Shores.

The slowdown in resort sales is not all due to last year's hurricanes, according to Daily, of REMAX. Condo developments are popping up across the country, from Las Vegas to Naples, Fla., he said.

"Investors and users have a tremendous amount of choices," Daily said. "And I don't think all these (projects) are going to get built. I think less than 50 percent will. The key for buyers is to pick the projects that are going to get done."

"Part of The Wharf's appeal is being in the middle of all the activity," Wilkes said. We see a mix of people coming in. One group of buyers has been on the beach and now they want off the beach, but still want to be on the water. We're seeing buyers from as far away as Guam, Europe and California."

The 741 condo units at The Wharf will be built over two to three years, and most of the 1 million square feet of retail space should be leased within two years, according to Wharf developers. Future plans include a 239-room condo hotel, The Inn at the Wharf, and the units will be sold for $400,000 each, Wilkes said.

The project's 210-slip marina with floating docks will open in April, he said.

Kicking off public use

Memorial Day weekend and concert will kick off public use of some of The Wharf's major amenities. The site's icon, a 142-foot tall ferris wheel, was custom-made in northern Italy, according to Wilkes. A 70,000-square-foot Rave theater will also open that weekend, along with four or five restaurants and several retail stores.

On July 4th, all of the entertainment, stores and restaurants on the site's Main Street will be open, he said.

The Wharf's "big box area" on the west side of the Foley Beach Express toll bridge will include large stores such as a grocery or electronic store, Wilkes said.

So far, 200,000 square feet of retail space has been leased, according to Jeff Rouzie, leasing representative for AIG Baker. "The focus now is on unique boutiques and entertainment," he said, "and the big boxes will come later."

The tenants so far include Monsters of the Deep, a 5,000-square-foot interactive museum featuring shark exhibits; Starbucks Coffee; hamburger eatery Johnny Rockets; Sand Dollar Shoes; H.L. Hood; Tootie Green's Yellow Broom, a gift shop; Galati Yacht Sales; Private Gallery; Go Fish, a clothing and jewelry shop; Twin Palms, a gift shop; Shades; Bungalows; Just Off The Beach, a gift shop; Michelle's Beach House, a home furnishings store; Ooh La La; Tickled Pink, a retro gift shop; Unique Jewelry N' Things; Pensacola Blues, a jeans and denim store; Regards from the Beach, a gift shop based in Tuscaloosa; Diamond Jewelers; Little Things, a children's clothing store; Top Nails and Tan; Live Bait Food & Spirits restaurant; and Frontier Grill, a Mexican restaurant.

"When you go through two hurricanes in a row, it can knock you back," Rouzie said. "But this is more than a condo project. The multiplicity of this complex on the water is unique. Within 24 months you'll see a totally different mix of retailers."