Staff photo by Mike Pare / Machinery sits at the Waterside lifestyle center in East Brainerd where work is starting on new REI and Publix stores.

About REI REI reported annual revenues of $2.56 billion in 2016, a 5.5 percent increase from 2015, the outdoors retailer reported earlier this month. Founded in 1938, the consumer co-op has more than 12,000 employees.

Outdoor clothing and gear retailer REI plans to open a Chattanooga store as it joins grocer Publix as part of $40 million in new commercial space in the Hamilton Place area, a developer says.

The pair of retailers will go in the Waterside mixed-use development off Shallowford Road near I-75 that already holds an hhgregg electronics store and other small retailers, said Jack Haylett, senior vice president of Branch Properties.

Haylett said the REI and Publix stores are scheduled to open in the summer of 2018.

"The Hamilton Place area is the retail center of Chattanooga," said the Atlanta developer. "They wanted to be right in that area."

He said other small shops and restaurants also are slated for the Waterside lifestyle center, which was originally developed by the DeFoor Brothers prior to the Great Recession a decade ago. However, work slowed at the center amid the economic downturn and it's now gearing up again.

REI, with 147 stores in 36 states, is headquartered near Seattle. It calls itself the nation's largest consumer co-op and it employs about 12,000 people.

Company officials didn't return emails or a phone call seeking comment.

Haylett said the 25,000-square-foot REI store will be located toward the rear of the development near hhgregg and adjacent to the interstate.

"It will have great visibility," he said.

Publix, meanwhile, will open a 45,000-square-foot supermarket at Gunbarrel and McCutcheon roads, Haylett said.

"Publix is committed to Chattanooga and this helps them properly offer coverage where they don't service," he said. In East Brainerd, Lakeland, Fla.-based Publix currently has a store near the Hurricane Creek subdivision. The Waterside store will be its fifth in Hamilton County.

Mike Garcia, general manager of the hhgregg at Waterside, said he and others in the development are looking forward to the new additions.

"It's kind of hidden," he said, noting that Publix and REI will generate more traffic. "It's opening up the area. Something as big as Publix will affect [traffic] drastically."

The Embassy Suites hotel and Mellow Mushroom restaurant are located at the Shallowford Road entrance to Waterside.

Haylett said Branch Properties has developed a Knoxville REI store and officials have been talking with the retailer about other locations.

"With Chattanooga in the mountains, it has great, thriving outdoor activity," he said. "It seemed to be a fit."

Last year, the developers said that up to 300 new apartment units also were in the works for Waterside.

Haylett said the residential piece will be developed in future phases.

"It's coming along as we hoped," he said.

In all, Branch officials predicted $100 million in retail and residential development at the site.

Eventually, they said, Waterside could hold 350,000 square feet of retail space, 20,000 square feet of restaurants and the apartments.

Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.