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Loughborough Commons, Eminent Domain and Fairness

Today I was have a “conversation” about Loughborough Commons with another REALTOR® that lives and works in my area. Quick background, the Schnuck’s grocery store wanted to build a new building and create a big shopping center and in the process 12+ homes were bought out and razed. A single family held out — not wanting to move.

This is where our conversation turned to disagreement. We were discussing value — fair market value. He felt it was “unfair” of the family to hold out for a higher price on their family home than what was the “market” value prior to redevelopment and rezoning of the land. I countered that it was unfair they were being forced to sell something they didn’t wish to sell. Furthermore, I stated I thought it was immoral that Desco, Ald. Villa and the City of St. Louis forced this situation upon these families for an outparcel.

When a client comes to me and wants to sell their property my job is to help determine the best price for them relative to their debt, how quickly they wish to sell and what the market will bear. Some property is in more demand than others and prices generally reflect that. If you buy all the homes around me and then want mine I am going to be wise and recognize the value just went up. Developers know the “value” of that land is considerably higher than if located in an area not being targeted for redevelopment.

Developers often will offer 25% more or so above the normal residential assessed value but often this just approaches the true market value. They’ll use scare tactic arguments to suggest all development will stop if we try to curtail these practices but little evidence if offered to back up these claims.

Taking someone’s occupied personal home is unjustifiable. Sure, if it is falling in and they’ve been dragged through every housing court in town I’ll grant you an exception. But in terms of fairness I think preference should be given to home owners, not developers. I always wonder about the people that advocate for developer’s rights in such terms — how they’d feel if it were actually their home being threatened.

Fair is relative but what is fair to me is allow people to not fear their homes being taken away from them at the whim of a developer or sales tax starved municipality.

– Steve

 

Currently there are "24 comments" on this Article:

  1. awb says:

    When the houses were in demand (by Schnucks), their value increased. In a fair system, where a private entity can’t use government’s help to force a sale, Schnucks could not have relied on this form of corporate welfare to reduce their costs.

    I don’t see any government official helping me to build a bigger house or expand my driveway and garage. Why should they offer that kind of deal to Schnucks? So Schucks can take on the load of doing business in the City and profiting from that?

     
  2. Your Virtual Alderman says:

    Every day the project-and neighborhood-looks better and better. The construction of a modern shopping center adjacent to older homes shows a city that is growing within its historic context.

    The benefits provided to the overall St. Louis city community by the development of this site to its highest and best use is the public good served in this case of eminent domain.

    [REPLY Better than what? Bare dirt? Most of the homes that were razed were cute and well maintained — does a cinder block Lowe’s look better than early 20th Century homes?

    Investment in our neighborhoods should not be confused with leveling what exists and creating something new that does not build upon adjacent areas. And I am so sick of the “highest and best use” argument to take away people’s homes. Between the old factory and the old Schnuck’s there was plenty of land for a new project.

    The new project should have connected to all the adjacent streets, left the homes along Grand, added some condos or apartments and should have been of much higher density. The Schnuck’s and Lowe’s could still be part of the project — just arranged in a much better way. You know, highest and best use of the land! – SLP]

     
  3. Craig says:

    awb,

    government officials offer “regular citizens” all sorts of programs to get new homes or make home improvements. There are many tax credits, tax abatements, the mortgage interest deduction.

    Second, developers often pay far, far more than 25% of the assessed market value for homes. Oftentimes, this number is 100% or more of that value.

    [REPLY The government offers little to someone that has a well maintained house that is paid for except the right to take it away from them. – SLP]

     
  4. Your Virtual Alderman says:

    The former site was obsolete (the Schnucks) and abandoned (the factory).

    “Obsolete” and “abandoned” are key tests in determining a finding of “blight”.

    The “cute” and “well maintained” homes were also functionally obsolete. Shotgun houses no longer meet the requirements of today’s homebuyers.

    By definition, shotgun houses are built without hallways (with rooms connecting end to end), and easily meet an appraiser’s defintion of functional obsolescence, even if they are well maintained.

    While there are thousands of shotgun houses in the city of St. Louis, when a block of such obsolete structures can be converted into a more productive, community serving use, blighting and eminent domain make sense.

    [REPLY Oh great, more phrases from the developer playbook. Obsolete and abandoned. This is the logic that has led to the razing of many fine structures in the City of St. Louis and all over this country. Union Station was functionally obsolete and abandoned, perhaps we should have razed it for a Central Hardware.

    I have zero problems rebuilding on the Schnuck’s site & the factory. And not all of the homes were shotguns lacking hallways — many of those had small halls — we have thousands of such homes all over the city and yes people do buy them.

    The issue here is lack of vision. Developers look at land and do the predictable thing they’ve done for decades rather than look for new and arguably better solutions. – SLP]

     
  5. Matt B says:

    Steve wrote…

    “But in terms of fairness I think preference should be given to home owners, not developers. I always wonder about the people that advocate for developer’s rights in such terms”

    It’s too simple to put ED in terms of Developer vs. an individual home owner. Here is an extreme example, but it is the simplest way to illustrate my point.

    99 of 100 home owners agree to sell for generous offers, and one owner outright refuses to sell (for the sake of argument no offer will be good enough). The location is prime for a commerical development, and the other home owners could never get the same offers by selling their homes to another homeowner.

    The one holdout has basically taken control of the other owners’ rights to make the maximum use of their own property. Which homeowners’ rights should be given preference, the 99 or the 1?

    You can still try and make a case for the rights of the little old lady who will not sell her house. But, what if the house is a rental owned by someone out of state or even the infamous Blairmont Companies. Should it make a difference?

    Now what if the new development is Steve’s dream TOD project?

    Eminent domain is not a bad tool it is just not being used in the best, most effective ways. Cities should be saying “If you want eminent domain here is what we want from you.”

    Steve wants…
    “The new project should have connected to all the adjacent streets, left the homes along Grand, added some condos or apartments and should have been of much higher density. The Schnuck’s and Lowe’s could still be part of the project”

    I don’t have time now but look forward to what Eminent Domain has in common with “Must See TV”.

    [REPLY Matt your example is at the late period in the game. So 99 folks are ready to sign and move and 1 says no and progress is stopped. The flaw in this process is not the one that doesn’t want to sell but the assumption that to redevelop and area we must erase all traces of 100 homes. Developers, planners and city officials treat the city as if it is a corn field where anything goes.

    If we had different (say modern) zoning that encouraged urban development patterns and rewarded higher levels of density Desco’s development team might have been forced to look at the site differently.

    But what happens is they design the same old sh*t and then bitch when someone doesn’t want to sell. Too f*cking bad. Design projects that are urban in nature and you won’t need to worry about the one or two people that don’t want to sell.

    We as a society are conditioned to make the lone holdout feel bad for holding up society’s progress yet we don’t hold the developers, architects, planners, engineeers, or politicians accountable for not seeking alternative solutions to the 50 year old suburban model. Sorry, I’m just not going along with that line of thinking — it has had decades and frankly it just doesn’t work. – SLP]

     
  6. Your Virtual Alderman says:

    Responding to SLP’s reply:

    “Oh great, more phrases from the developer playbook. Obsolete and abandoned.”

    “Obsolete” and “abandoned” may be phrases from the developer playbook, but they are also legal terms that are part of the precedent cases regarding eminent domain law in the courts.

    “This is the logic that has led to the razing of many fine structures in the City of St. Louis and all over this country.”

    Most buildings that have been demolised in the city of St. Louis were abandoned by their former owners for years. The city acquired them through tax foreclosure. Demolitions along the riverfront to make way for the Arch were of warehouse buildings that sat in a flood plain, and were mostly vacant and abandoned.

    To see a modern day version of this rot and decay, look at the remains of the Switzer Building. The interior members of that structure are rotten to the core.

    “Union Station was functionally obsolete and abandoned, perhaps we should have razed it for a Central Hardware.”

    Union Station would never have been rehabilitated if it were not for millions of dollars in federal grants awarded to the City of St. Louis.

    “The issue here is lack of vision. Developers look at land and do the predictable thing they’ve done for decades rather than look for new and arguably better solutions. – SLP]”

    I respectfully disagree. The issue here is not a lack of vision, but building a shared vision.

    Redevelopment of an older community is much more complicated than building new in a green field.

    The developers of the Loughborough Commons may not share the vision of SLP, but they have a shared vision with many others, including many neighborhood residents, the local aldermen, all other elected officials in the city of St. Louis, the business community, and the courts.

    The developers of the Loughborough Commons conceived a plan and are delivering on their vision.

    [REPLY Vision? What vision? It is a standard big box plus outparcel project. This is not vision. And I was at the meeting with the community — it was not a ‘we want to integrate with the area’ but a ‘here is what we are building and you’ll like it’ meeting that is so typical. Our standards are just way too low… – SLP]

     
  7. Craig says:

    A standard big box plus outparcel project does not represent a lack of vision. It represents a well-functioning, efficient, and easily built design.

    Personally, I would rather have the standard project and the current prices on goods as opposed to a non-standard design, the cost of which would be passed on to consumers–all due to a minority group seeking an “urban” design. By the way, these “urbanists” are the very same people that often refuse to shop at big box retailers, and thus, avoid the increased cost of a new design.

    [REPLY The next comment does a good job addressing your flawed thinking but I want to touch on a few points myself. First, the typical big box+ outparcel projects are not well functioning as they have a short shelf life which makes them inefficient from a cost standpoint.

    More sustainable commercial development that mixed opportunities for small locally owned storefronts near chain places would great a more stable and lasting project, resulting in lowered costs to consumers. Also, the more residents and commerce we can get on a given parcel of land the greater the chances of the developer getting a good return on investment as well as more options for the municipality receiving tax revenues. It is dense and compact urban developement that is the wise fiscal choice.
    – SLP]

     
  8. Ted says:

    Good urbanism isn’t about style, or a “minority group seeking an “urban” design”, it’s about creating an environment for the people of this city that is sustainable. In order for that to happen it needs to be integrated into the city so that it is walkable, bike friendly, etc. (not just car oriented). Good urbanism is also about creating environments that people can feel proud of, environments that won’t be obsolete if the current business model changes. Good urban design is adaptable, human scaled, designed with the future in mind. This development and others like it will eventually become a burden on the city. They will prevent it from being a place that people want to live, and a place that people will remember. They will leave the city with a legacy of empty big box stores that are hard to redevelop without tearing them down and rebuilding them. That is a waste of time, energy, and precious resources for which the world has a dwindling supply of. We need to be building with the future needs of this city in mind, not just the present wants of a few developers. We can be creative; it is within our grasp…well at least some of us.

     
  9. Your Virtual Alderman says:

    “This development and others like it will eventually become a burden on the city. They will prevent it from being a place that people want to live, and a place that people will remember. They will leave the city with a legacy of empty big box stores that are hard to redevelop without tearing them down and rebuilding them. That is a waste of time, energy, and precious resources for which the world has a dwindling supply of. We need to be building with the future needs of this city in mind, not just the present wants of a few developers. We can be creative; it is within our grasp…well at least some of us.

    By the time this happens (maybe in 20-30 years), the site will become ripe for a transit- oriented, mixed use development.

    By that time, Metrolink will run down I-55. The then old Schnucks will be sitting on a large tract of land next to an elevated South City Metrolink Station.

    In the mean time, the developers will earn their return, the shoppers of South City will have nice new stores, and the seniors will have more cheap and convenient places to sit down and have a cup of coffee.

    Think of the current project as a means to an end. An interim use, if you will.

    [REPLY Sorry, we don’t have the time or resources for interim uses. We need real sustainable solutions to attract population and growth now. Loughborough Commons will be a net drag and in 20 years will do more harm than good. – SLP]

     
  10. Ted says:

    Yes, that would be the best outcome of this whole thing. I just hope that we will have the resources in the future to redevelop (cheaply) sites like this. Why not just build it that way now, while energy and resources are still rather cheap and abundant with a future metro line worked into the plan. That just seems like it would be the most resource friendly way to do this, and it could be an example of long term planning.

     
  11. Adam says:


    By the way, these “urbanists” are the very same people that often refuse to shop at big box retailers, and thus, avoid the increased cost of a new design.

    Is that supposed to be insulting? Oh, those stupid urbanists! Always willing to spend a little more money in order to create a more livable environment! Not just thinking about saving a buck whenever they possibly can!

    I’ll take it as a compliment.

     
  12. Craig says:

    I was not attempting to insult urbanists for not shopping at big box stores. I certainly understand that shopping at smaller stores oftentimes results in a more pleasurable experience. I was just pointing out that many urbanists would not have to bear the price increases that would result if a Home Depot had to come up with an innovative design for each of its sites.

    Ted, I don’t think your starry-eyed post had one fact in it. Several vague conclusions and declarations, but no facts.

    “Good urban design is adaptable, human scaled, designed with the future in mind.” What does that mean?

    Sustainable equals walkable and bike-friendly? Who says? I can think of several sustainable communities that are very car oriented: Florissant, Chesterfield, Ballwin, Richmond Heights…

     
  13. Matt B says:

    Steve said…
    Matt your example is at the late period in the game. So 99 folks are ready to sign and move and 1 says no and progress is stopped. The flaw in this process is not the one that doesn’t want to sell but the assumption that to redevelop and area we must erase all traces of 100 homes. Developers, planners and city officials treat the city as if it is a corn field where anything goes.

    These are planning and design issues not eminent domain issues. My point was that homeowner’s rights goes both ways, and usually the hold-outs are in the minority. I’m not saying eminent domain is always right, but it is not the clear cut issue many try to make it out to be.

    Steve said…
    We as a society are conditioned to make the lone holdout feel bad for holding up society’s progress yet we don’t hold the developers, architects, planners, engineeers, or politicians accountable for not seeking alternative solutions to the 50 year old suburban model. Sorry, I’m just not going along with that line of thinking — it has had decades and frankly it just doesn’t work.

    We agree on the larger point of urban design, but I think too often the Eminent Domain issue is equated with issues of bad design (strip malls and Quick Trips). It is an easy mistake to make because the power has been used in so many anti-urban developments. But, just because the design is bad doesn’t make the development tool bad.

    If everyone happily sold for the Loughborough development, would that make that development OK in your mind?

    If 5% of homeowners were forced to sell for a great TOD development, would that make it a bad project?

     
  14. Dustin says:

    Craig, obviously you have a different definition of sustainable than, say, oh, most people.

     
  15. Matt B says:

    Craig said…
    Personally, I would rather have the standard project and the current prices on goods as opposed to a non-standard design, the cost of which would be passed on to consumers–all due to a minority group seeking an “urban” design.

    There is plenty of research showing that money spent on better design is paid back in better tenants and better sales.

    Go to the intersection of Kingshighway and Chippewa if you would like to see the triumph of standard, low cost design. There are plenty of vacant retail bays there just waiting for you to make your fortune.

     
  16. Adam says:

    Craig said:

    I was just pointing out that many urbanists would not have to bear the price increases that would result if a Home Depot had to come up with an innovative design for each of its sites.

    I disagree. I think if some of these big box retailers did try to come up with innovative, community-friendly designs then more urbanists would support them. That’s the whole point!

     
  17. Ted says:

    “Good urban design is adaptable, human scaled, designed with the future in mind.” What does that mean?

    Adaptable – Meaning that as the conditions of the economy change, or if any of the businesses leave, new uses would be able to occupy the structures that were built.

    Human Scaled – Meaning that without cars, would such a development continue to work? Are the buildings built to make people feel welcome, make them feel valued. Does it facilitate human interaction, and social progression?

    Designed with the future in mind – Once again, as the economy changes (and it will as resources become scarce), will such structures continue to be viable. Will such developments that are primarily car oriented continue to survive? Will the businesses that are in them always want those spaces, or will they simply be coming back in 20 years asking for more money from the city to build somewhere else and leave behind the old site?

    Sustainable Development – Building and developing so that we can meet today’s need without compromising the ability of future generations to meet their needs.

    These terms aren’t hard to understand. I was able understand such terms in the first couple weeks of my undergrad in urban affairs. They made more sense by the time I received my masters in urban planning. These aren’t some starry eyed ideas that I have, I simply don’t want this city to become any more car oriented than it is already. I want this city to be a place that doesn’t contribute any more than it already does to the degradation of this planet. I want this city to be a place that people want to come to to experience St. Louis. I don’t want it to become any other place USA. We aren’t some podunk town. We are a city that can demand good design. Developers may whine and scream for a little while, but they are in the business of building and they aren’t going to stop doing it just because they have to do it better. Plus, good design doesnÂ’t need to cost much more. Green buildings and developments are already comparable to standard developments on the coast, why would urban designs be any different? The only thing that is holding up the cost here is that no one is doing it. As soon as it becomes standard the cost will go down. We need a government that can implement policies that can move development forward in a sustainable direction. So now you know why I feel so strongly about thisÂ… now why do you feel so strongly about this? Why do you think that this is such a great development?

     
  18. stlmark says:

    A few things. First, I live in Holly Hills and will soon be shopping and spending my $$ in Loughborough Commons. I was not a shopper at this Schnucks because the produce section sucks. The new one (I assume) will be better. I also was not visiting the Nordyne plant on a regular basis. I will, for a lack of better options, be frequenting the lumber yard at Lowe’s. I will discontinue to shop at Norreberns Lumber which is in the County. Taxes and jobs for the City seems better than a shuttered HVAC plant, 12+ $65,000 homes and a sub-par grocery store.

    Secondly, the Home Depot on KHwy is a dump. Maybe some good ole competition from Lowe’s will make them clean up their act.

    Thirdly, you say:
    “When a client comes to me and wants to sell their property my job is to help determine the best price for them relative to their debt, how quickly they wish to sell and what the market will bear.”

    What does debt have to do with determining a fair price? If I own my home does that somehow mean it is worth less? That sounds like the car salesman that asks what you want your monthly payment to be, rather than talk about the sticker price. The guy that held out on the Schnucks offer appropriately politicized his cause so he could pad his wallet. He played the victim to get the highest price he could for his cute little home. He was leveraging the situation to profit as best he could. I probably would have done the same thing. Schnucks paid out the wazoo for those little homes and the residents of Holly Hills, Carondelet, et al get a nicer place to shop. Win-win.

    [REPLY Thank you so much for clarifying — I was completely unaware our only choice was leave the entire area exactly as is or do what is now being constructed. Why I am bothering to talk about it since the planning for the area was such a black & white issue.

    But let me see if I can understand this a bit, the old grocery store was not a good place to shop and the produce sucked so have to take people’s homes to solve that problem? Sorry, I fail to see how bad produce means we must take people’s homes. And giving Home Depot some competition might be a good thing until the point where we saturate the market.

    While I may not be shopping at Schnuck’s or Lowes I understand the draw. What you and others are not getting is that we could have had both of those stores along with retaining the existing homes, additional retail, office space and residential units such as townhouses or condos. We had this one chance to get it right and we blew it big time. The next chance will likely be around 2030 after one of the big boxes has been vacant for 5 years as well as most of the adjacent spaces. – SLP]

     
  19. checker says:

    I would have no qualms sticking it to the man and getting my maximum $$$ for my house. Bravo to the folks who did. We need a whole hell of a lot more stuff besides a new Schnucks to keep people in Carondelet. A decent school system is tops on my list.

     
  20. jason says:

    I can see StlMarks point as well as Steve’s. Thankfully my multiple personalities talk on a regular basis so I can attempt to work out the “convenience issues” versus “good taste and civic duty” argument in my head. The problem is that this stuff getting built, whether you like it or not, its almost like Superman coming to save the woman jumping out the window after she already hit the ground. Thank you Steve for attempting to be a superman in a city full of window jumping old ladies. Maybe one of these days we will pull together and actually catch her.

    I am thankful Lowes is coming in specific to the issue that the Kingshighway Home Depo is a pathetic waste. It near my house and its an eyesore. Maybe they will clean it up. Maybe instead the same issues this location has will creep up in Lowes. Arnold Hardware and Hanneke’s will always be there to help those disgruntled orange and blue shoppers.

    Why couldnt they make Loughboro Commons more pedestrian friendly? Have you seen how many people walk around this area? Putting more stores near the corner could have only helped them. Why cant these people get it that you can have smaller parking areas with more independant stores? Half the time the lot will not even be full! The major cause of this one is the minimum parking requirement.

    YES the city actually has a minimum number of parking stalls that are required to satisfy the desired square foot area that a developer is trying to get for retail. Usually about 1car for every 200sf of usable space. Restaurants are even worse with 1 car for every 100sf of space. I dont know exactly what the city requires, but you can bet that the vast expanse of parking is not because the developer wanted to give people plenty of places to park! IF they had their choice I am sure there would be more retail at the highway side of the lot.

    Developers could use someone on their side to help them through red tape. They tried it with Jennifer Florida, but this isnt what I am talking about. They need someone to help them find ways to reduce restrictions on parking requirements, setbacks, maximum building height, etc. We as citizens need someone to make the city adopt these changes as well as increase requirements for landscaping and pedestrian use.

    Is there anyone on here willing to do it? There are already people in these positions with connections, they just need to use them.

    [REPLY Thanks to all your personalities. I think the issue with the Home Depot is the product creeping out all over the parking lot. Each year it seems like more and more of the parking lot has become sales floor. While I love say produce markets that “spill” out onto the sidewalk I’m not fond of big boxes expanding onto the parking areas. This, I think, is the root of the displeasure with Home Depot. Also, a number of the parking lot trees have died and not replanted. This happens in many areas, including the Gravois Plaza nearby. If not controlled, it will happen at Loughborough Commons as well.

    I will be the first in line to argue in favor of reduced parking requirements — even maximum parking limitations on retail projects. – SLP]

     
  21. maggie says:

    Our current car-loving society makes dealing with parking issues very complex. While I agree that places like Home Depot and Schnucks have WAY more parking than they would ever need, other areas are struggling with how to handle all those cars.

    I know there has been a lot of controversy over lack of parking in the areas adjacent to the South Grand business district for years. Given the current climate where people will drive three blocks to a restaurant rather than walk, those living near commercial districts often come home to find they can not park anywhere near their home. Nothing sucks worse than arriving home with a load of groceries only to find out you’re going to have to lug them half a block to your front door.

    I think those minimums were put into place for these types of difficult situations. Maybe if we could distinguish different parking regulations for f-neighborhood commercial districts versus h-area commercial where big box development is more likely to occur we would be moving in the right direction.

    [REPLY Agreed. I see the maximum applying more to the big box store where the total number can get way beyond any real demand. In the neighborhood commercial districts they will have to work on shared parking and the city may need to look at small parking structures such as the one on Delmar across from the Tivoli. – SLP]

     
  22. Jason says:

    Maybe it could be a reduction calculation similar to the increase in floor area that you gain by using a sprinkler system, maybe its an increase in buildable square footage for adding items such as landscaping and (usable) public features like bus stops or similar connection to pedestrian circulation or public transit. Also allowing reduction of parking based on as maggie mentioned the type of retail. Considering Loughboro Commons is a PUD, these could be regulated differently by far! Many residential neighborhoods in close proximity to desirable areas that people drive to usually have parking pass requirements for those streets so non residents are relegated to public lots or meters. Maybe this is something that needs to be instituted on south grand. This may also help crime as cars would need to be registered to park in an area if you plan on parking on the street. It would also possibly limit the number of passes per address. Max 1 pass per 15′ of street frontage. Come on people, this isnt hard to determine since alot of this is online now. I think most city lots are at least 30′ wide. Granted this would be problematic if you want to have friends over, but then you could always have them park in back, or borrow the hang tag and you park in back if its a hang tag system.

     
  23. Mike says:

    Steve,

    I have a couple questions that I would like your thoughts on:

    1. Isn’t Loughborough Commons a sort of an exception, where autocentric is OK. It is right on the interstate and by the park, which means easy auto accesss and not as dense population wise. Plus, you’ve got Lowe’s as an anchor, which means most shoppers will need a vehicle to transport lumber, etc. And it helps support home improvement by being close.

    2. Couldn’t you argue that when you are the last home owner, the true market value just went way down. Who is going to buy the only occupied house which is about to have a Lowe’s built ten feet away. The value at that point derives strictly from the fact that Desco can’t just say “fine keep your house and we will build around you” due to zoning and whatnot?

     
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