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By
Bill Beggs Jr.
Old and tired warehouses sprawled across 56 acres along Hall
Street... a declining neighborhood in East St. Louis with seemingly
nowhere to go...The intersection of Chouteau and Mississippi,
so close to Lafayette Square—yet so far...A departing Target
store in downtown Kirkwood that seemed, even when open, to leave
a gap in a community ripe with possibilities.
That was then—and “then” was just five
or so years ago for these four real estate challenges. Now is
well, wow!
St. Louis Business Center
is a bustling industrial park that’s home to JB Hunt Trucking
and more than a dozen other tenants.
Parsons Place is a neighborhood
in East St. Louis where more than 200 families live and play
just a few blocks from a MetroLink station.
Eleven Eleven Mississippi,
one of the area’s hottest new eateries, is the centerpiece of
a thriving mixed-use development just up the street from Lafayette
Square.
Station Plaza in Kirkwood,
which occupies the former Target site offers 239 upscale loft
condominiums, urban townhomes and apartments combined with street-level
restaurants and retail while all anchored by a new civic square.
These four developments are examples of dozens completed and
on the drawing board in the Gateway City and on the other side
of the Mississippi and Missouri rivers. Urban Land Institute
(ULI) has selected them as case studies to be presented at a
half-day symposium on Wednesday, May 2: “Investments in Progress
in the Urban Marketplace.” This symposium by ULI St. Louis,
in partnership with the St. Louis Regional Chamber and Growth
Association (RCGA), will evaluate how these projects exemplify
revitalization plans in the downtown core and elsewhere in the
region. The symposium is sponsored by Brinkmann Constructors,
Casey Communications, Duke Realty, Peoples National Bank (Gold-level
Sponsors) as well as Silver and Bronze Sponsors.
The program, 7:30 a.m. to 1 p.m. in the Khorassan Ballroom at
The Chase Park Plaza Hotel, will focus on four case studies
that examine some of the area’s most successful recent developments.
Project leaders will discuss development details, recommend
available resources, and address all aspects related to financing,
zoning and community impact. Attendees will have the opportunity
to discuss different development topics with local experts at
18 separate roundtables, following the presentation on the four
case studies.
ULI St. Louis has been the overall sponsor of the event, first
held in 2003 and again in 2005. A “think tank” that, by design,
invites everyone to the table, ULI is comprised of savvy planners,
developers, lenders and pioneers of all disciplines, from lawyers
and contractors to architects and retailers. Movers and shakers
in the public and private sectors have worked shoulder-to-shoulder
with leaders of cultural institutions and other nonprofits to
generate buzz about St. Louis. In 2003, the ULI chapter here
had fewer than 150 members; today, it boasts nearly twice that.
And the national ULI includes more than 34,000 members worldwide.
ULI has been perfect for pragmatists populating the Show-Me
State, who know success isn’t somewhere over the rainbow. Financing
can be more complicated than Rubik’s Cube; negotiating zoning
issues and fire codes from jurisdiction to jurisdiction like
navigating a maze. And despite successes demonstrated elsewhere,
some investors remain hesitant. For one thing, when venturing
into new territory, there may not be “comps” available to demonstrate
feasibility.
“ULI is known for digging deep, and for its candor,” says Richard
Ward of Development Strategies, who chaired national ULI’s Public/Private
Partnership Council. “Things aren’t as simple as they used to
be. There are many layers of financing.”
You don’t have to remind Phil Hulse, Barb Freeland, Wendy Timm
or John Porta—who for years were up to their elbows in the four
projects that they’ll each spend a half-hour each presenting
at the symposium May 2. In the spirit of developers helping
one another, they’ll talk about how they’ve made money or how
they’ve lost it. They’ll discuss relative profitability. And
they’ll imagine what they would have done differently, if they
could have.
ULI selected mature projects, developments that have been “on
the street” for a few years. By highlighting those with a track
record, presenters also will have an opportunity to evaluate
what their developments mean to the bigger picture.
“We’re talking about smart growth, smart projects,” says ULI
member Ron Johnson, design principal at Arcturis. “Each of these
is a catalyst for other development.”
St. Louis Business Center
This vast complex along Hall Street once was the site of St.
Louis Car Company, which manufactured rolling stock into the
1970s. Languishing for the next 25 years as an industrial park
whose rock-bottom lease rates attracted many tenants, repairs
tended to be the likes of tarpaper patching and plywood. At
night, trucks would rumble in to dump debris at will.
Around the turn of the Millennium, Phil Hulse and his partners
recognized one of the opportunities of a career. They could
transform the site into a bona-fide industrial and business
park that would not only be a smart investment, but among other
things could reverse a business exodus.
“The complex wasn’t set up to handle today’s distribution needs,”
recalls Hulse, a principal of Summit Development Group and Gateway
Commercial. “It had a worn, tired look, like they’d bought paint
that someone was closing out.”
So, there went the neighborhood—volunteer vegetation was removed,
rusty chain-link painted, and landscaping done along the Hall
Street frontage. A logo was designed, signage erected. Aesthetics
was only part of the rehabilitation process, of course. Buildings
whose structures were still solid were “re-skinned.” New floors
were poured, better foundations built, truck docks added. In
many cases, the infrastructure was ideal: The buildings were
clear span with ceilings of ideal height.
“The process was complex. It was quite a balancing act that
sometimes required a lot of hand-holding,” Hulse says. “Here
we had 850,000 square feet of space, and everything was wrong
with it.”
Today, 14 companies with approximately 600 employees are based
at St. Louis Business Center. The complex is 95 percent leased.
Tenants include JB Hunt Trucking, Boeing, Corpak, Nu-Era, Arcobasso
Foods, Brahler Truck Tires, Fleet Pride, Plastic Lumber Co.
of America, Dawes Transportation, CWC and AA Importing.
Clients and prospects have myriad choices, from new to retrofit.
Hulse and his team can provide expertise in everything from
architecture and finance, to environmental and legal matters.
Parsons Place
Located just a few blocks from a MetroLink station and the Jackie
Joyner-Kersee Boys & Girls Club in East St. Louis, this residential
development holds the distinction of being the first in the
City of East St. Louis to receive a tax credit award. A credit
of $1.6 million for the first phase of construction and $1.1
million for the second phase leveraged $45 million in private
investment.
Barb Freeland, executive vice president of McCormack Baron Salazar,
is delighted how the project eventually came into being. But
she points out that, from land assembly to financing, building
a modern development in this distressed city was not a walk
in the park.
It helped that, at the outset, Metro (then Bi-State Development
Agency), the City, County and State were firmly behind the project.
“It was clear to us that many parties wanted to see this happen.
Bi-State wanted to promote transit-related development, and
became partners in making this happen,” she says. “It’s been
huge.”
At square one, however, the biggest challenge was convincing
investors that they could pull it off: “There were no comps
within a 25-mile radius of the site.”
Parsons Place, for which ground was broken in 2000 as the City’s
first new private development in 30 years, has helped to change
a pervasive mind-set. Emerson Park Development Corp., the forward-thinking
neighborhood association, has embarked on a for-sale program,
having already offered 12 for sale and planning to put 15 to
20 more on the market this year. Moreover, the City is now embarking
on developments other than public housing.
M Lofts, 1107 to 1111 Mississippi
How did a 35-year-old development firm based in Clayton with
a portfolio of brand-new projects, including golf course developments,
wind up rehabbing a circa-1920s building at Chouteau and Mississippi
in the City?
Wendy Timm, COO/CFO of Conrad Properties, sometimes wonders
that herself. “This was a marked contrast to taking on a behemoth
building,” she says with a chuckle.
What made things easier at the gut level for Timm and her team
was the well-established neighborhood just to the south: Lafayette
Square. In a city of 100 neighborhoods, its neighborhood association
is arguably one of the strongest of them all.
“It’s a very tight neighborhood, a very cohesive community,”
Timm says. The community of 900 households seemed ideal for
a neighboring mixed-use development, in the old International
Shoe building, which is on the National Register of Historic
Places. The revitalized five-story structure is now home to
36 one- and two-bedroom loft-style apartments.
“What’s fascinating to us is that most of our lessees, maybe
90 percent, are from out of town,” Timm says. “They’re very
attracted to the security of a gated community.”
The location is ideal for anyone of the urban-dweller mentality,
who otherwise might have chosen one of the loft developments
on Washington Avenue downtown. But when moving forward with
the deal, therein lay a challenge for Timm’s team: No comps
nearby. Despite that, they made it happen. Leasing began in
2003, and the complex now is more than 90 percent leased.
M Lofts offers options for businesses, as well. Timm notes that
office suites are available in a variety of floor plans.
If she could do it all over again, Timm would have liked to
purchase some of the surrounding property and created “a nice
little village.”
That said, the timing was right.
“The market was on its way to being made,” she says. “In our
business, timing is everything. We can’t take credit for being
overly smart.”
Station Plaza, Kirkwood
The development plans of John Porta and his partners were right
on Target.
When the discount store was razed, MLP Investments LLC started
on a mixed-use 239 unit residential and retail development in
downtown Kirkwood. (Attention, Target shoppers! Your new store
is a mile or so south, at the junction of Kirkwood Road and
Interstate 44, in a mega-complex featuring a Lowe’s, TJ Maxx
and Wal-Mart.)
As MLP’s project started to take shape, the landscape of that
part of town—just caddy corner to the Amtrak station and within
the historic Kirkwood downtown started to change. Not only did
the for-sale residential units sell and the apartments lease
quickly, but Station Plaza was a catalyst for the entire district.
“The area around us started taking off,” Porta says. At least
one other condo development is close by, and similar development
is abuzz north of the railroad tracks, as well. Station Plaza
is anchored by an expansive civic plaza in front of the restaurants
that comes complete with a fountain and tables sprouting umbrellas.
Weather permitting, Thursdays are the night for “Parties on
the Plaza.”
“Downtown Kirkwood had the retail and residential basis already
in place,” he says. “Station Plaza built on this and encouraged
even further pedestrian activity.”
How fast did Kirkwood Station sell? “The loft condos sold out,
66 condos in 90 days,” Porta says. “The apartments leased up
well, but at a slower pace.”
Blame interest rates, which were lower at the time and buyer-friendly.
Rentals weren’t as robust.
A peculiar challenge for Porta and his ilk has been the inadequacy
or obsolescence of regulations addressing these types of mixed-use
developments. In many cases, they’ve been conspicuous by their
absence. Building and Fire codes to address this mixed-use arrangement
were either vague and unclear, woefully out-of-date or in some
instances did not even exist.
“Many cities across the country still don’t even have this mixed-use
zoning,” Porta points out. “It can really be complicated, which
is one reason approvals can take so long.” However, with the
completion of Station Plaza and other mixed-use developments
that are successful and becoming popular, cities are now addressing
this type of complex project.
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Dan
Lee: Pinnacle Topper To Keynote
May 2 ULI Event at the Chase
|
You
ain’t heard nothing yet—ain’t really seen nothing, neither.
Atrocious grammar notwithstanding, on New Year’s Eve, revelers
at Lumière Place, Pinnacle Entertainment’s $430 million
project at Laclede’s Landing, should be having quite the
celebration. Officials expect there will have been plenty
of holiday parties at the complex before then, too.
Daniel R. Lee, chairman and CEO of Pinnacle Entertainment,
will provide his perspective on the opportunities his company
has availed itself of in the region (River City, the company’s
gaming and entertainment complex at Lemay, is slated to
open late in 2008), and how Pinnacle’s development will
be a catalyst for further growth.
Lee knows a thing or two about such things. Described as
a consensus builder and nothing short of visionary, he was
CFO of the company headed by Las Vegas development wizard
Steve Wynn, the force behind such jaw-dropping projects
such as Bellagio.
Pinnacle’s seven and a half acres on Laclede’s Landing is
shaping up to be a breathtaking addition to the northern
riverfront: Lumière Place features a large casino, 200-room
luxury hotel, spa, business center, fine restaurants and
12,000 square feet of meeting and convention space.
Pinnacle says the project will help further revitalize downtown
by spurring additional neighborhood redevelopment, and has
committed to oversee $50 million of investment into a new
residential, retail, or mixed-used development to be completed
within five years of the casino and hotel’s opening.
As part of this, Pinnacle and Rodgers Group Development
are developing Port St. Louis, a $25 million, riverfront
10-story glass and brick structure housing 49 condominiums,
each with luxury finishes, balcony views and access to a
rooftop pool and commons area; completion is scheduled for
2008.
The casino project is estimated to create 4,500 jobs: 700
construction jobs, 1,300 permanent jobs, and an additional
2,500 ancillary service jobs region-wide. |
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