|
 |
TAX CREDIT CORNER
|
Terra Cotta
Lofts
By Zachary Boyers
The State of Missouri has multiple tax credit programs to provide
incentives for investments and charitable contributions to approved
projects. This regular column features examples of how the various
Missouri state tax credit programs benefit the State, generally,
and St. Louis in particular.
Finally, it is happening in downtown St. Louis. People are looking
downtown for a new place to live and a new lifestyle to call their
own, and they are finding that they have choices. From loft apartment
units now under construction at the Rudman Lofts and the Merchandise
Mart, to for-sale lofts at Louderman Lofts, the Elder Shirt Lofts
and Paristyle Lofts, a new wave of residential development has hit
the downtown neighborhood.
The largest for-sale loft condominium development under construction
to date, Terra Cotta Lofts, aims to build what experts regard
as the key to continuing revitalization downtown: a critical mass
of new residents. This project’s 99 loft units will add nearly 200
residents to the streets and sidewalks of a rebounding St. Louis.
These kinds of numbers, added to the slew of new units coming up
and down Washington Avenue and throughout the Old Post Office district,
are the kinds that begin to illustrate a real story of how downtown
St. Louis is coming back. From Portland to Providence, and Denver
to Minneapolis, downtown residents have been the key to successful
revitalization. Terra Cotta Lofts will carry existing momentum in
downtown St. Louis to yet another level of intensity.
Chicago-based investors and developers Jay Case, John Vanker and
Joseph Freed and Associates have worked with Firstar Bank to secure
loans and state tax credit equity for this $20 million historic
renovation. “We think the opportunity for full-scale downtown redevelopment
in St. Louis is ripe, and we’re glad to play a role in seeing that
happen,” Case says.
The loft building, originally designed by architect Albert Groves
and built in 1915, was home to General American Life Insurance Company
until 1977. It is probably most recognized for the giant neon ball
atop its roof, which signaled changes in the weather in the late
1950s and 1960s. The developers plan to re-light the ball as part
of the building’s redevelopment.
For years, developers explored the potential for downtown’s rebirth
in St. Louis but found it economically infeasible. The great costs
to fix the core’s historic buildings made improvements difficult.
This was true until the introduction of the Missouri State Historic
Rehabilitation Program. Developers Case, Vanker and Freed teamed
up with Firstar Bank and its Missouri Tax Credit Clearinghouse to
capture the full potential of this credit. “Terra Cotta Lofts is
a critical project for the continued revitalization of the Loft
District,” says Kathy Bader, chairman of Firstar Community Development
Corporation. “It’s a major landmark in the heart of everything happening
along Washington Avenue, and the tax credits are helping it come
back to life.”
The Missouri Certified Historic Rehabilitation Tax Credit Program
offers credit against Missouri income tax liability for 25 percent
of the qualified costs for rehabilitation of certain buildings.
Eligible projects must either be certified historic buildings or
buildings within certified historic districts.
To the extent that most developers cannot use the Missouri credit,
they are selling it to the Missouri Tax Credit Clearinghouse, a
division of Firstar Bank’s Community Development Corporation. This
transferability is critical in the success of historic buildings,
making it feasible for developers to adaptively reuse St. Louis’
stock of architectural gems. After buying the credit, the Clearinghouse
can then sell them to other qualified Missouri taxpayers.
These credits in aggregate allow for powerful historic redevelopment.
“At this stage in downtown St. Louis, we would not be able to do
the Terra Cotta Lofts without the state historic tax credits,” Case
notes.
The building’s 176,000 above-ground gross square footage will be
developed into retail space on the first floor, and 99 condominiums
on floors 2 to 12. The subject building is undergoing a complete
gut renovation to include a new roof, new windows, new elevators,
new mechanical systems—including plumbing, HVAC, electrical—and
a stylized lobby. New high-speed elevators and a trash chute will
serve each floor. The building will also have a rooftop deck with
panoramic city views, a party room, an exercise room, storage lockers,
a bicycle storage room, and a secure lobby with intercom access
to each unit. Units will be characterized by large windows, hardwood
floors, high ceilings and an open floor plan. The rehab will focus
on quality soundproofing, safety and stability. Units will feature
hardwood floors in the living/dining area and a kitchen equipped
with custom cabinets, electric range with self-cleaning oven, dishwasher,
garbage disposal and washer/dryer. The master bedrooms will have
their own baths with double bowl sinks and steeping tubs.
Unit prices vary based on location in the building, but 32 one-bedroom/one-bathroom
units are priced on average at about $150,000 and 66 two-bedroom/two-bathroom
units are priced on average at about $200,000. Case comments “Our
units will be known for quality, and the building will be a real
center of activity for a maturing loft district. Prices will cover
a wide swath of the market, attracting a great mix of people. And
that’s what great downtowns are known for.”
Notably, the development has experienced early sales success, with
more than 50 percent of the units pre-sold at the time of construction
start. As Firstar’s Bader puts it, “It is very exciting to see the
demand for quality housing in a newly energized urban environment
continues to be strong.” As many are aware, the Washington Avenue
Historic District has received $17 million in federal funding for
streetscape improvements including wider sidewalks, lights, benches
and trees to give the area a more residential look and feel, and
the work will be completed this year. This, along with an estimated
500-plus new residential units to be completed in 2002, and progress
in the Old Post Office district redevelopment efforts, will ensure
that downtown will look and feel very different in short order.
Thanks to the Terra Cotta Lofts and other residential developments,
downtown’s streets and sidewalks will be alive again.
Zachary Boyers is vice president of Firstar Community Development
Corporation.
|
|
|
|
|
-
- - - - - - - - - - - - - - - - -
-
- - - - - - - - - - - - - - - - -
-
- - - - - - - - - - - - - - - - -
-
- - - - - - - - - - - - - - - - -
|
