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VOL. 40 | NO. 12 | Friday, March 18, 2016

Rutherford, Williamson mirror Nashville's commercial construction boom

By Kathy Carlson

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While Nashville and Williamson County grab much of the attention for commercial development in the Midstate, Rutherford County’s also on a roll.

“Growth in apartment, retail and office space has been explosive in Rutherford County over the past 24 months,” says Brian Hercules, vice president of economic development for the Rutherford County Chamber of Commerce.

As the county’s population approaches 300,000, it has added 1,000 apartment units a year for the past two years and just racked up its first year of 1 million hotel-room nights. By some estimates, Rutherford’s population could pass 400,000 in 2035.

There are multiple hot spots for new retail venues, multifamily rental housing and office space, with the heart of Rutherford County’s current growth occurring in the Medical Center/Gateway Boulevard area northwest of Murfreesboro’s downtown public square.

That’s where The Avenue shopping area opened in 2007 and where St. Thomas Rutherford Hospital relocated in 2010 from a site a few blocks from the square.

“Medical Center Parkway and the Gateway are really strong,” notes John Harney, a broker with the Parks Group Commercial Real Estate.

Until development shifted in that direction, most had occurred along Old Fort Parkway and Memorial Boulevard, on the way into Murfreesboro from Interstate 24.

Rapid growth in the Medical Center area has followed extensive study and planning.

The Gateway Commission helps guide its growth, and the city is studying what to do with the parts of town where current Gateway occupants once were situated.

Rutherford’s recent growth represents a strong bounce back from the slowdown in commercial development brought by the great recession of 2008, developers say.

“We sort of hit a high water mark in 2006 and early 2007, then the recession hit, but it was not near as severe here as for a whole lot of the country,” Harney explains.

“We began to bounce back in mid-2013 and 2014, and 2015 was the best year for our company.”

Apartment construction has been strong. “In 2014, (Rutherford County) saw the addition of 1,023 new multifamily units, and 1,185 were added in 2015,” says Hercules.

The Gateway area is attracting urban-style midrise apartments, hotels, offices and, so far, one corporate headquarters.

Tommy Smith of StoneGate Commercial Real Estate says his company has about 800 apartment units either underoccupied or under construction in the Gateway area, with another 180 to be added. On nearby Robert Rose Drive another 440 apartments will be built.

“Young professionals is what all of this is designed for,” he says, adding that Rutherford County apartments are priced lower than many comparable units in Nashville.

Harney notes that the urban-style, mid-rise apartments with elevators also attract new retirees.

“They can afford the rents, they don’t want the bother of maintaining a home, they like the security and they like having an elevator.”

On the retail side, Hercules says, the addition of Sprouts Farmers Market and La-Z-Boy Furniture Gallery, among others, is indicative of strong growth.

“In addition, we have added three new Walmart Supercenters, two Walmart Neighborhood Markets, and restaurants such as Peter D’s, BJ’s Restaurant and Brewhouse, The Goat, Slim Chickens and several fast-food options.”

Turning to offices, the auto parts maker M-TEK, Inc., is building a 70,000-square-foot North American headquarters in the Gateway area.

Phase I of The Fountains at Gateway, a new 31-acre Class A multitenant office and retail development, will open this summer, according to Hercules.

The first phase, about 100,000 square feet, is being built now, with more than 100,000 additional square feet planned for the second phase and 250,000 in the third.

The new office space will complement local efforts to attract additional corporate headquarters.

The Gateway area includes several new hotels to meet the needs of nearby businesses.

There are three remaining hotel parcels still to be developed in the Gateway area, says Smith.

Other areas for commercial development include North Memorial Boulevard, where mid-rise luxury apartments are being proposed, and the New Salem Highway corridor, which has attracted growth after an I-24 interchange was added in 2007.

Meanwhile, Murfreesboro’s practice of planning continues these days in two new neighborhood studies.

One is aimed at deciding how to make best use of the North Highland Avenue corridor, home to St. Thomas Rutherford Hospital and related businesses before the move to the Gateway area.

The other study tackles the South Broad Street corridor, eastbound from where it intersects with Memorial Boulevard just south of the Square.

The city recently engaged Ragan-Smith Associates, a Nashville land-use planning and engineering firm, to conduct the studies. Ragan-Smith previously worked on the planning for the Gateway area.

The North Highland area includes both commercial and residential property, with single-family homes, student rentals and some historic overlays, says Randy Caldwell, executive vice president of Ragan Smith.

The second area, the Southwest Broad corridor, runs south of the square. It has been known historically as The Bottoms because it’s in a low-lying area with frequent flooding.

It is home to a greenway and includes the Murfreesboro Civic Plaza, Cannonsburgh Village and the west Main Street area.

This study includes a marketing component, Caldwell adds. The studies are just beginning, will include public input, and should take about nine months.

“The goal is to create a plan that’s a vision of the stakeholders and citizens,” says Caldwell.

Underlying all the commercial development is population growth from rapid job expansion.

“Certainly the hospital is a great job generator,” Smith says. “…There’s a terrific economy here. It’s a college town with about 23,000, 24,000 students. Nissan’s here. … We have a very balanced economy. It’s a very nice place to live.

Middle Tennessee State University, with an enrollment of about 23,000 students, has played a key role in developing the area.

“The university has been a great partner,” Harney says. “Murfreesboro and Rutherford County, in the last 15 years, have woken up to the fact that MTSU is a great partner in educating a work force, especially as we move toward a technology-based work force. Our future in maintaining job growth depends on how well-educated the work force can be.”

Harney adds that his company works throughout Middle Tennessee on a variety of projects.

“I don’t think people know how blessed we are to be here, with a great quality of life and visionary leaders. … That’s paying off right now.”

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