Major development planned around Lulu's restaurant

Sunday, June 21, 2009 By KATHY JUMPER Real Estate Editor

Mac McAleer recalls bringing Lucy Buffett to the 27-acre site near the Dr. W.C. Holmes Bridge and hugging the Intracoastal Waterway and saying it would be the home for her new restaurant.

"She said, 'Are you kidding me?'" McAleer said last week, smiling.

Lulu's at Homeport Marina opened five years ago. Last year, 200,000 people came through, and the restaurant did $13 million in food and retail sales, McAleer said. Folks wait up to three hours for a table, listening to live music while sitting at one of three bars or watching their kids play in the mega sandbox.

Sometimes, a visitor even catches a glimpse of Lucy's famous singer- songwriter brother, Jimmy Buffett. (He pilots his own plane to the nearby Gulf Shores Airport.)

"It's been a great partnership with Lucy," McAleer said of the deal with his ex-wife, whom he calls a close friend.

Ambitious project

Now he plans to parlay Lulu's destination status by surrounding the eatery with a 250-room hotel, five-story parking deck, 1,000-seat conference center and a casual fine dining restaurant, retail and office space on Ala. 59 and East 29th Avenue. A new ferry terminal, with room for two high-speed vessels, might eventually take 250 passengers to Biloxi casinos and bring them back again.

He would also like to put a lighthouse, similar to the Middle Bay Lighthouse in Mobile Bay, near the existing marina, and have a bar and deck extend from the lighthouse to the casual fine dining restaurant, which will be located under the Holmes bridge.

"Will it happen?" he asked. "That's my intention. Three groups of investors are presently doing their due diligence."

Partners in the project include his marina management team - son Joe McAleer III and Ken Carter. They plan to either partner with other developers or sell them land.

McAleer, a former top executive at Krispy Kreme Doughnuts, leases the land to Lulu's restaurant and built the adjacent multimillion-dollar, 76-slip concrete floating marina, which is almost leased up.

He presold and planned to build 96 condominium units before Hurricane Katrina, but returned the buyers' deposits after the storm.

The new project has been dubbed Homeport, which was the name of the Buffett's family home on Mobile Bay, said McAleer.

Preliminary plans for Homeport are in front of the Gulf Shores City Council, which must approve a right-of-way relocation on the land.

Transportation epicenter

McAleer views the Homeport location as being an epicenter of transportation, with the nearby airport, the main highway and the waterway.

Gulf Shores Councilwoman Carolyn Doughty said the city rezoned property along the waterway from industrial to resort use several years ago with the idea of developing a tourist center not as vulnerable to Gulf storms as properties on the coast.

"It would give us an alternative," she said. "It would be like a second coast."

Meeting space is in demand at the Gulf, which lost about 45 percent of such space after 2004's Hurricane Ivan, according to Herb Malone, president of the Alabama Gulf Coast Convention & Visitors Bureau. He was glad to hear about the Homeport plans, adding, "We will be even more excited when it goes vertical. Lulu's is a tremendous asset to the area."

Charlie Williamson of Gulf Coast Commercial Realty in Mobile is working with McAleer to put the hotel group together and bring in financing and investor groups. Once the hospitality group is in place, he will work to bring in other venues to enhance the property, he said.

"The big thing was we already had a venue in place that was successful, and we didn't have to start from a piece of dirt," he said. "Lenders are not going to lend one dime on a land deal. He's already got the land, which is an unbelievably huge hurdle.

'Excited about timing'

"We're excited about timing on this," he continued. "We think in eight or nine months we'll see the hospitality industry get aggressive again."

Developers want to have plans finished and permits ready when the market turns, he said. The site engineering and project management is being done by Engineering Development Services in Daphne.

More venues at the Gulf mean more activity for everybody, according to Shaul Zislin, owner of The Hangout on the beach at Alabama 59 and 182 in Gulf Shores, which opened a year ago.

"If they can bring in 50,000 more people a year for their conference center, those guests won't eat at Lulu's every night," he said. "Whatever extra they can generate, we say bring it on."

/cut/p36.3/cPhotos by BILL STARLING/ Staff PhotographerTop: Lulu's at Homeport Marina on the Intracoastal Waterway is seen from the top of the Dr. W.C. Holmes Bridge in Gulf Shores.

Above: Mac McAleer plans to develop the property surrounding Lulu's. He also owns and leases the land for the popular restaurant. His plans call for a 250-room hotel and conference center as well as other venues. He is shown at one of the outdoor bars at Lulu's, which is owned by Lucy Buffett.

/cut/3/cRendering by Nimrod Long & AssociatesThis rendering shows the planned development of the Homeport Marina on the Intracoastal Waterway to be built around Lucy Buffett's popular Lulu's restaurant.