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Tough Decisions: Useless Plaza Vs. Another F-ing Parking Garage

September 23, 2008 Downtown 45 Comments

The large law firm Thompson Coburn, who was being lured to Clayton, is staying downtown in floors of the US Bank tower on 7th. That is the good news. The bad news is the deal will cost about $700K in tax incentives to keep from losing a huge number of jobs. Furthermore, the Missouri Development Finance Board will build yet another parking garage downtown (garages are more prolific than Walgreen’s with sometimes more than one per corner).

The site of the new garage is the NW corner of 7th & Locust. Over a decade ago the Ambassador Theater was razed on that corner by then Mercantile Bank (now US Bank). I recall going downtown and seeing the once magnificent building being demolished. Mercantile Bank wanted a proper entry for its mid-1970s tower.
For twenty years the two had managed to co-exist next to each other.

At the same time the owner of the Arcade-Wright buildings a few blocks away wanted to raze those structures for surface parking. The Post-Dispatch editorialized at the time against razing the Arcade/Wright for surface parking but in favor of razing the Ambassador for Mercantile’s “urban plaza:”

January 30, 1995, Monday, FIVE STAR Edition

Downtown St. Louis will lose another of its landmark buildings later this year when Mercantile Bank knocks down the 17-story Ambassador Theater Building at Seventh and Locust streets. That’s too bad, but the reality is that not every older building can or should be saved.
After the building is demolished, the site will be turned into a landscaped plaza with a fountain and trees. The plaza will be an enhancement to downtown besides setting off the bank’s modern office tower and its bank building at Eighth and Locust.
Built in the 1920s, the Ambassador Theater Building housed an elegant movie palace, which was also used for stage productions, but its lights went dim in the 1970s. The theater portion of the building was stripped bare before Mercantile acquired the structure in 1989. It has been vacant, or nearly so, since then. The city’s Heritage and Design Commission assented to the historic building’s demolition, influenced, no doubt, by the bank’s plan to create an attractive plaza there.
Meanwhile, the owners of the historic Arcade and Wright buildings on Olive Street, at Eighth, also seek permission to demolish. They want to replace the buildings – one 18 stories tall, the other 16 and both more than 75 years old – with a parking lot. That is hardly the kind of open space that will add to the quality of downtown life or promote its economic growth.

So presumably the paper’s editors in 1995 felt an “attractive plaza” with a “fountain and trees” would add to the “quality of downtown life.” So where are they now decrying the loss of this “enhancement?” It didn’t take long for everyone to realize this new plaza was just an elaborate circle drive – a seldom used one at that.

The public was fooled by the idea of a great public space in place of the fabulous but vacant Ambassador. The plaza does indeed have grass, a fountain and trees. I’ve also never seen anyone use the space. I think I biked through the circle drive once but it is truly a forgetful space.

In addition to losing the Ambassador and with threats against the Arcade/Wright the owner of the nearby Syndicate & Century buildings notified the city in May 1995 they were revising their plan for the block bounded by 9th, Olive, 8th & Locust to be surface parking.

The Ambassador didn’t come down until 1996, and it didn’t go willingly:

St. Louis Post-Dispatch – September 3, 1996
Author: By Elizabeth Holland ; Of The Post-Dispatch Staff
After considerable struggle, Spirtas Wrecking Co. employees finally cut and removed a chunk of a truss of the Ambassador Theater late last week. Workers had been waging a battle with the building’s massive, concrete-filled trusses and expect to continue doing so until all of the trusses are removed, said Gail Partain, an executive with Mercantile Bank.

But back to the dreadful plaza that replaced the well-built 17-story Ambassador.

Plaza is a glorified circle driveway - in the middle of the CBD!
The plaza is a glorified circle driveway - in the middle of the CBD!

Butt look, grass and a fountain!

Of course the drive cant even be used when it it kept chained off.
Of course the drive can't even be used when it it kept chained off.

Again I don’t recall seeing anyone in the space – ever. I take that back, I have seen security guards make sure nobody dare use the space. When I was taking these pictures a guard came outside. Perhaps he thought I was a disabled terrorist in a bright orange wheelchair?

Perhaps a parking garage is a better use of this space? It couldn’t get any worse…unless they copied the other garage on this city block:

This is the lovely garage seen by visitors to our convention center.  They should have razed this a decade ago.
This is the lovely garage seen by visitors to our convention center. They should have razed this a decade ago.

Does it get any worse than this?  We lost a spectacular building on another corner of this block so the bank could have a ‘nice’ entrance.  They should have started here.

The corner of 7th & Locust reads more as a vacant hole than a quality urban space.
The corner of 7th & Locust reads more as a vacant hole than a quality urban space.

Since I started writing this post I’ve made a couple more visits.  Yesterday afternoon I spotted a few smokers at the base of the tower — not in the plaza itself.  Again no seating is provided and sitting on the grass would probably upset the guards. The Plaza was designed by Gene Mackey who was just honored by the AIA St Louis.

Demolition of the Ambassador cost over $2 million.  Spiratas & Mercantile Bank ended up in court over the extra costs due to the concrete filled trusses.  When built the Ambassador was meant to stay around longer than it was.

While we have too many garages already I think we have too many vacant corners as well.  At least a garage will bring some urban form back to this corner.

Further reading:


Currently there are "45 comments" on this Article:

  1. Tim says:

    How about a parking garage with a Walgreens on both the bottom and top?
    I have to ask myself how much does an empty building cost to keep v. tearing it down? It seems pretty simple to me, pretty or not, if its a drain on resources, down it should go then. I did some late night exploring in that theater in the early 1990’s. It was a cool space and its a shame no one had a profitable use for it. I still say there should be more curved concrete forms in random spots all over the city.

  2. john w. says:

    If your logic is based solely on a financial bottom line, then I suppose “if it’s a drain on resources, down it should go”, but of course that same logic could be applied to the numerous vacant historic buildings comprising large percentages of once vibrant neighborhoods in north city. Why don’t we just blow everything down and make a great big moonscape with some curb contained grassy areas and fountains? Why don’t we demolish every single building in the CBD that isn’t already a parking garage, and replace them with parking garages. Then, just like the stubborn concrete filled trusses of the Ambassador not willing to die so young, the sloped cast in place concrete parking decks of all the garages will ensure that they will never be able to adaptively reused as anything else in the future. We’ll be stuck with a bunch of freakin’ parking garages with Walgreen’s on the ground floor. I might say that the cars would love it, if in fact cars had a soul or a life, but they don’t. Cars don’t give a crap where they are. People tend to give a bit more of a crap.

  3. Matt B says:

    Something to keep in mind…

    Downtown office vacancy:
    Buildings with dedicated parking (2 or more spaces/1,000 sf of office space): 4%
    Buildings with no dedicated parking (less than 2 spaces/1,000 sf of office space): 14%

    Increase in office vacancy since 2000:
    Buildings with dedicated parking: 1% increase (3% to 4%)
    Buildings with no dedicated parking: 7% increase (7% to 14%)

  4. Adam says:

    “…and its a shame no one had a profitable use for it.”
    because a profitable use never would have come along ever again and the building would have sat vacant forever. no IMMEDIATE profit? DESTROY IT!

  5. Michael P says:

    You, sir, are an idiot. And the type behind these ill-conceived plans in downtown STL.

  6. JMedwick says:

    With the Ambassador long gone, I don’t mind the locating of a garage on this parcel. That said, with the plan in early-mid 1990’s to redevelop the stretch of Washington between 7th and 10th with convention related uses, the true mistake (well other than being short sighted and tearing down the Ambassador) was not using its destruction as an opportunity to build a new/larger/ more urban friendly garage on the site of the Ambassador building and tear down the ugly garage at 8th and Washington to be replaced with a true urban plaza that would play off of the convention center expansion or with a new building for convention use.

  7. Tim says:

    I look at if from the point of view of the owner. If I had a building that was just costing me money instead of making me money and the long term prospect of it ever making me money was unlikely, then yes, tear it down. I don’t understand what is so hard to grasp here. It runs against my nature to consider forcing people to keep a building standing that doesn’t make a profit.

    I think some one is ahead of you on in North City. I think there is more vacant land there now than there was 100 years ago. Don’t get me wrong, I can understand keeping a property even though it costs more than it is worth financially just because I like the way it looks or I think it might make me money in the future. But to force someone to keep it standing just because some one else wants it there makes no sense to me. In the end it’s private property and none of your business.

  8. JMedwick says:

    As a side note, the concentration of garages on 7th street combined with:

    1. The previous discussion regarding barrier that the convention center forms to traffic heading north out of downtown; and
    2. The proposed new I-70 bridge

    It is clear that how screwed up downtown transportation planning really is. Nothing makes sense like locating all of the downtown parking garages on 7th, a street that has been blocked by large developments on the northern and southern ends of downtown.

  9. Kara says:


    We all live together in a society and if it is going to be civilized then we need to consider each others business as the things we do affect many others. The argument that “it’s my property, I can do whatever the hell I want” only works when you live alone on an island.

    I think they should build a theatre on this parcel. Downtown needs a good movie theatre.

  10. John M. says:

    Thanks for the excellent reporting on this subject. The reality indicated by shutting off indoor access through the old mall was spot on. That became a major issue. To this day I will never understand why they alotted such a small garage for this structure on the other side of the property, That only housed 300+ vehicles for the US Bank building. Many chose to use the Convention Center garage but walking outside in inclement weather and safety concerns are important to the many employees housed in this buiding.

    They sought out a transportation plan a few years back that had shuttles and parking included in it. I never heard what happened with that plan. But I guess this happened to it.

  11. James R. says:

    And I take the pont of view of an urbanist. We’ve got a tax system that doesn’t take into account the value (and huge embodied energy) in existing buildings. Instead, owners are encouraged to tear down and rebuild the cheapest DryVit, vinyl, duct tape, and chewing gum piece of poo they can get away with. Then they let it depreciate, move out, let it sit vacant and rot, tear it down, then get the public subsidy and start over.
    Or, since there is no incentive to redevelop a property, they might as well tear it down and put a surface parking lot there. That way you are only paying taxes on the land, not a building.
    I don’t see what is so hard to grasp here. If you tax and zoning codes, not to mention infrastructure spending, is designed around encouraging sprawl and disinvestment in the urban core, that is what you are going to get.
    Historic tax credits are a good first step but form based zoning, urban growth boundries, and taxing the use value of land would make a much bigger difference.

  12. GMichaud says:

    The quality of design is important. There may be a configuration in which a plaza is actually a benefit. Moving streets around and putting the plaza in the middle could help. Making it a major transit transfer point could be another.
    Underground garage anyone?

  13. john w. says:

    Why don’t we just rename downtown St. Louis “garageville”?

  14. john w. says:

    …and build a 79-story parking garage in the mudhole where the old baseball stadium stood.

  15. John M. says:

    I think the article stated that part of the garage would be subterranean. As far as being a transfer point, I can’t see how that would be possible. I know at one time they talked about a secondary transfer point for the Metro working with their now primary, intermodal, but I think it was dropped.

    Speaking of the intermodal at 620 S 16TH, I don’t see anything on here about that. What are your thoughts on how that finally came about, and its overall affect on DTSTL.

  16. ex-stl says:

    at some point isn’t it tempting to just give up and say Sam Houston was right? (god forbid) despite many efforts for the better, it does look like some would see TX as a model.

  17. Jim Zavist says:

    IF the garage includes ground-floor retail, it could be an improvement. But if all it is is a fortress to store vehicles and to separate the office building’s tenants from the outside world, then NO! On a micro scale, the plaza helps visually frame a building that doesn’t relate to the fabric of downtown from the first half of the 20th century. But, as you note, on a macro level, it’s another dead, allegedly “public” but really private, plaza sucking life out of the city. I wouldn’t go so far as to say “dreadful”, but there are better options. And while we can lament the loss of the Ambassador Theater Building, it’s gone. Are we going to lament the loss of the structures that preceded the Ambassador Theater, as well?
    Viable and vibrant urban areas are not static places – new continues to replace old. If you want static, go visit Colonial Williamsburg (history.org). The best we can hope and work for is continued improvement, which is why I’m conflicted. Not every old building can or should be saved. I never saw the Ambassador Theater Building, so I can’t judge its value, either at the time of demolition or if it had been allowed to remain until now. I do know that there’s an opportunity on the table now, and that done well, it can be an improvement.
    I’m also really conflicted by the desire to see ground-floor retail with the reality that it would be owned and leased by a public entity, the Missouri Development Finance Board. I have a problem with the public sector competing with the private sector. There are multiple private landlords downtown with vacant ground-floor retail space – in the bigger picture, would adding to that supply be a positive or a negative, for all involved?

    [slp — it is about the loss of a quality building the made a significant contribution to the public street. No doubt something was razed to build the Ambassador. At that time the city was getting more dense and each new structure added to the quality of the urban scene. Neither this plaza or the garage that will replace it improves upon what came before — that I will forever lament. I don’t want static, just denser and more urban. Any retail in the base of this garage will likely fail. A M-F restaurant might do ok on the lunch crowd. A 24/7 Walgreens would actually be a good thing.]

  18. Chris says:

    I can assure you that the Ambassador Building was magnificent; but you are right, it is gone now and we can’t do anything about it except insist that something of equal or better quality is built in its built.

  19. samizdat says:

    Not too relevant to the discussion, but when the bank tower was first proposed, it included in the plans for this block, in addition to the tower currently occupying it, two more buildings: an additional 55-story office tower, and a 20-ish story hotel. Which, I suppose, means the Ambassador would have come down anyway. A sad fact. Even 30 yrs ago, the beautiful gem kown as the Ambassador was already receiving its’ death knell. Foolish commercialists and their pandering toadies the bought and paid for St. Louis politicians. Oh, and the short-sighted and ignominious PD imprimatur of the theater’s demolition.

  20. John M. says:

    You know one thing I have felt about the One US Bank Building,( mercantile tower ), I love its outside asthetic design. and the framing of it, not discounting the astute observations about the little used plaza, was it did do what it was designed to do in framing that beautiful building for full visual effect. And in that way I will miss the purposeless plaza.

  21. Tim says:

    To say I totally disagree with the statment that you some how have any say about my private property wouldn’t even come close to expressing my horror at such ideas. (Yes, of course beyond the obvious thing of say building a smelting plant in Ladue.) But an old building that I have no use for? No, down it goes….

    Here’s an idea, a tax code that is simple and not designed to mold and shape behavior. Ah, what a dream.

    “Downtown needs a good movie theatre”…sure, no argument there. But…would it work? In retrospect did you ever try to see a movie at the Union Station theater? Not a good time.

  22. James R. says:

    The tax code already molds and shapes behaviour. They all do no matter what form. It’s just a question what you want to give incentives for. I’d rather see incentives for a just and sustainable world.

  23. john w. says:

    For those that simply see a beautiful old building rotting away with no apparent immediate interest in renovation, the word ‘irreplaceable’ needs to be injected into the discussion because it’s not simply a matter of replacing bricks and mortar. The craft required to build such magnificent buildings cannot be simply renewed, as the economy of today’s architectural detailing has eschewed any craft for all but the most exclusive and expensive projects. If it’s irreplaceable qualities are nearly inarguably worth saving, and I’m willing to bet MOST who appreciate quality architecture that plays a vital role in our urban fabric and who regularly blog and become civically active would agree that they are, then simply saying “down it goes” is a wrong as it gets. We’re not discussing some vacant craphole in a rural or suburban setting not reliant on strong architecture presence, where simply saying “down it goes” would not be met with resistance, we’re discussing critical extant urban conditions that are and have been compromised severely by the “down it goes” mentality over the course of now many decades. Soon, there won’t be much left at the current rate of loss.

  24. Tim says:

    “I’d rather see incentives for a just and sustainable world.” Wow, the second shudder inducing statement of the day here. When I hear “just and sustainable” what I understand is “wealth redistribution”.

    If the building is worth saving strictly because of its style and craftmanship then gather the funds and make an offer. Otherwise….leave me alone.

    I agree, the tax code is made up to attempt to mold all kinds of out comes. Mostly what you get is unintended consequeneces. My point again is that it should be simplified and leave out the attempts at molding actions.

  25. James R. says:

    Yeah, and that is what I get for using soundbite when I’m in a rush to get something out.
    Look, it doesn’t matter how much you try to ‘simply’ the tax code, it will still shape behaviour – yes, often as unintended consequences. That’s going to happen no matter what you do. The only way to even attempt to get away from that would be a single flat tax, applied equally to every person across the board. No deductions, no state, sales, local taxes, no property taxes. Just one check that you pony up once a year for the priviledge of being alive. (Actually, it would be interesting to see how that would play out.) And even that would influence behaviour in certain directions, intended or not.
    I’m saying that *I* don’t want to just leave it to the unintended consequences. We’ve got that now and look where it has gotten us. Of course, you seem to be happpy with that.
    “If a building is worth saving strictly because of its style and craftmanship then gather the funds and make an offer.”…”And old building I have no use for”…”runs against my nature to consider forcing people to keep a building standing that doesn’t make a profit.” All a result of our tax and zoning codes.
    And forget about the ‘just’ part. If you don’t see that our current development patterns are unsustainable, I think you need to look a little closer.

  26. john w. says:

    Urbanism is not about libertarianism, and as we are now seeing with our nation’s economy, the ‘free’ and unfettered laissez faire attitude toward what those with money and power can, and will do in absence of strong regulatory framework, the property ownership autonomists will run our built environment into the ground as long as they retain the right to do what they wish and tell others to butt out. A property in an urban environment is woven into the fabric of the urban quilt, and there must be adherence to some base standard in preservation and urban quality, or you can be assured we’re screwed. Tim, perhaps you’d feel more at home at the Americans for Tax Reform website, or posting on Paul Weyrich’s personal blog.

  27. Jim Zavist says:

    Steve, I’m trying to find some resolution in your comments. It appears that you believe that “At least a garage will bring some urban form back to this corner.” “Any retail in the base of this garage will likely fail.” “I don’t want static, just denser and more urban.” and “A 24/7 Walgreens would actually be a good thing.”
    I understand the underlying frustration, that “Neither this plaza or the garage that will replace it improves upon what came before — that I will forever lament.” I lament the loss of significant structures, as well. But is this primarily a rant against losing the Ambassador or a (not very successful) rant about trying get some (any?) ground-floor retail in the new garage?
    In my heart, I’m a pragmatist. The Ambassador is gone. The plaza is here. A garage is apparently in our future. We can’t get the Ambassador back, so “our” remaining choices are either to keep a plaza that most people don’t value or to build something on the dirt. “We” can build a garage now or we can wait and hope that some promised “additional 55-story office tower, and[/or] a 20-ish story hotel” will be built in 10, 20 or 50 years. We can push for a garage with retail or we can accept a truly “denser and more urban” (St. Louis style) garage without retail.
    My vote is for a garage with ground-floor retail (yes, even a “24/7 Walgreens”) . . .

  28. Chris says:

    Ah Union Station’s Movie Theater…perhaps the subject of another post at some time. If a movie theater does open downtown, it must learn from the mistakes of the Union Station theater. Addressing disruptive behavior before it ruins business is the first step.

  29. Tim says:

    “and as we are now seeing with our nation’s economy, the ‘free’ and unfettered laissez faire attitude toward what those with money and power can, and will do in absence of strong regulatory framework,” I’d hate to see your concept of intervention if you think this is latest round of bail out is the result of a “free market”. Repealing the CRA would have been free market. Pushing lenders to loan money to people that can’t afford them with the threat of being charged by HUD for discriminating is hardly, “free market”. I can’t imagine anyone calling Freddie or Freddie anything but a government sponsered entity. The proper response to the correction is to let it happen and clear away the result of the intervention. But alas the answer to the negative outcome of intervention is always more intervention. It’s as if I woke up to find Hugo Chavez in the White House.

    The more I think about that “plaza” the more it’s really a drive way. Here’s a question, why does this plaza we are discussing look as nice as it does (not the design but cleanliness) and why does the Locust park look as crappy as it does or did until the recent cleaning?

  30. Brian says:

    It’s a shame garages end up concentrated on any street. But then again, I think one trade-off of enlivening the more intact street walls along Washington and Olive has meant reinforcing Locust and Pine as pseudo-alleys. Likewise, 8th Street’s gain may be 7th Street’s loss. Of course, St. Charles Street may as well be an alley, but then that street was vacated long ago on this superblock, forcing Locust and 7th to take on that role instead.

  31. James R. says:

    “Pushing lenders to loan money to people that can’t afford them with the threat of being charged by HUD for discriminating is hardly, “free market”. ” Do you honestly think that is what happend? That ‘the poor’ bullied there way into unaffordable mortgages?
    Again, this is a prime example of the unintended consequences of regulation *and* the lack of regulation. Essentially, at one point in this country there were usury laws that limited the interest rates that could be charged for mortgages. Banks required greater down payments and, importantly, held on to those mortgages and serviced them. Therefore, the banks subjected borrowers to greater scrutiny and required larger down payments. Banks were getting limited income off these loans, and would be holding the note for the life of the loan, so they wanted to make damn sure the mortgage holders were going to pay. They basically weren’t willing to take many risks.
    Then, for a whole series of reasons, including the desire by the government to make the US a nation of home-owners, a number of these regulations were changes. Banks were allowed to charge more interest and therefore relaxed their lending requirements. They were willing to take on more risk because they were getting greater returns and thus your FICO score determines your mortgage rate. Next, banks were allowed to sell off these loans, basically get a reduced amount up-front and sell off the cash flow. And then, perhaps most importantly, complex and creative financial instruments called Collateral Debt Obligations were developed where loans were divided and bundled together and then sold and traded essentially as stocks. The intention here was that risk could be spread out and by their analysis eliminated. If you bundle a whole bunch of mortgages together you can decrease risk since few in that bundle would default.
    So, here comes the unintended consequences. Credit became cheap and easy as the prime rate fell. With Alt-A ‘liar’ loans, sub-prime, no down payment interest only loans, money became available to anyone who could walk through the door. And people did. The more buyers and the more money is available, the more inflation in housing prices. More people turned to alternative mortgages as prices inflated to get larger houses, counting on the value increase to develop equity. Mortgage brokers became less concerned with the long term performance of the loans since they weren’t servicing, only originating and selling. Pension funds, hedge funds, etc. bought the CDOs with not really understanding what they were.
    The problem is, when nobody cares about the risk, from the homebuyer up through those ultimately purchasing the CDOs, risk tends to multiply as it is hidden. It is a system that instead of eliminating risk eliminated accountability. The CDOs became overburdened with underperforming mortgages. And now people are freaking out. This bailout is no where near the end of it. There are those who expected it to happen for quite some time but were dismissed as kooks.
    We are nowhere near laissez faire, but by pretending to have been (before the bailout) we’ve made things much much worse.

  32. Tim says:


    From a NYT article in September of 1999…

    “Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.”

    “In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae’s and Freddie Mac’s portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.

    The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.”

    I’d call this one of the seeds of this weeks news. And yet, this will be painted a “free market” failure. In 2003 Ron Paul introduced a bill to de-fund Freddie and Fannie. No one listened and here we are……

  33. Tim says:

    “Do you honestly think that is what happend? That ‘the poor’ bullied there way into unaffordable mortgages?” I don’t think that is what I said. It’s insane, one day the banks are racist for NOT lending money the next they are racist FOR lending money.

    From the NYT, September 1999


    “Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.”

    “In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae’s and Freddie Mac’s portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.

    The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.”

    As you can see this didn’t happen over night. From Ron Paul in 2002. I think he made this speech more than once to introduce this bill…..


    “However, despite the long-term damage to the economy inflicted by the government’s interference in the housing market, the government’s policies of diverting capital to other uses creates a short-term boom in housing. Like all artificially-created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged over-investment in housing.

    Perhaps the Federal Reserve can stave off the day of reckoning by purchasing GSE debt and pumping liquidity into the housing market, but this cannot hold off the inevitable drop in the housing market forever. In fact, postponing the necessary but painful market corrections will only deepen the inevitable fall. The more people invested in the market, the greater the effects across the economy when the bubble bursts.

    No less an authority than Federal Reserve Chairman Alan Greenspan has expressed concern that government subsidies provided to the GSEs make investors underestimate the risk of investing in Fannie Mae and Freddie Mac.

    Mr. Speaker, it is time for Congress to act to remove taxpayer support from the housing GSEs before the bubble bursts and taxpayers are once again forced to bail out investors misled by foolish government interference in the market. I therefore hope my colleagues will stand up for American taxpayers and investors by cosponsoring the Free Housing Market Enhancement Act.”

    Yeah, he’s the “crack pot”.

  34. James R. says:

    Hey, I’m with you on Ron Paul. I would love to see a Paul/Roscoe Bartlett ticket in this election. They are about the only politicians I see who are telling the truth about a whole range of issues. And they are both routinely dismissed as crack pots.
    As I said above, there has been government intervention to make us a nation of home owners, and of course this was extended to low and moderate incomes. But you can’t blame this on Fannie and Freddie taking too many low-income loans. All that did was accelerate the failure. This worthless paper is spread throughout the system, it’s just that Fannie and Freddie were some of the first to go off the cliff. This failure was *inevitable* because a system designed to eliminate risk eliminates moral hazard. As much as there are no consequences for the person (of any income level) walking away from the house where they are upside down on the mortgage, there’s no consequences for the mortgage broker because all they wanted to do was close the deal, get their fees, and move on. And this continues all the way down the line to, obvioulsy the government chartered entities and private banks that own the paper and who are getting $700 million bailouts.
    But Ron Paul would take it a step further by saying that it was inevitable because we have a fiat currency, no fractional reserve requirement, and debt-based money creation. And once you have debt based money, you are locked into continual growth since the amount owed is always larger than the amount of money available.
    Jim Kunstler would take it even further by saing that suburbia itself was inevitable based on cheap oil coupled with a system based on continual growth.
    And I’m to the point right now where I really don’t give a f*ck about cries that an urbanist system limits private property rights. You never had real private property rights under use-based zoning anyway. Try running a slaughter house in your back yard. More importantly, we’ve spent the last 50+ years squandering our natural resources and national captial in celebration of the ‘private property rights’ of a 2 car garage on a 3/4 acre lot just 15 miles from the Wal-Mart and the strip mall. I dont’ care how much you like commuting or driving your riding mower, that time is over. We’ve wasted our efforts on a living arrangement that has no future because there is a Global Shitstorm gathering on the horizon. Enron, Fannie Mae, Freddie Mac, Bear Sterns, AIG, and just now Washington Mutual – just the first drops. The oil spike to $147 – the first rumble in the distance. We’re going to be sorry that we obliterated our public transit systems, our national freight and passenger rail system, and our pedestrian scaled neighborhoods, cities, and towns.
    The least we can do is try to stop the madness and rebuild/preserve what we can. It’s foolish to think we can eliminate the effects that monetary systems and development processes have on our built environment. I say we need to throw out the existing and replace them with something that creates environments that work for both today and tomorrow.

  35. GMichaud says:

    Wealth redistribution, say isn’t that what the major capitalists are doing?, buying government wholesale and then designing policies for maximum profit. The beauty of mass transit and health care is that everyone, rich or poor benefits equally. Emphasis should be made on programs of that type, not wealth redistribution proposals such as the massive bailout now proposed.

    However, back to the subject at hand, the Ambassador Theater was a beautiful building, my last memory of it was standing in the lobby during demolition with a massive crystal chandelier laying on the floor. Crystal balls and prisms were scattered everywhere.

    It was a good, structural building. Most building can be adapted to new uses. Some questions that have to be answered include what is a sound energy policy concerning reusing old buildings? What is sound urban policy? What is best for the citizens?, and how should we respect and understand the cultures that came before us?

    Even today these questions are not considered, primarily because policy is run by the wealth redistribution crowd. (in other words more and more for the elite).

  36. Tim says:

    “Try running a slaughter house in your back yard.” I can except that level of zoning myself. But beyond that I get queasy. Lets face it the city population moved west to get away from the stench that was downtown in the 19th century. Between the tons of manure, open cess pools, lye and other manufacturing I’m guessing the “good old days” stank.

    With on on the fiat money, etc. You lost me with the Malthusian “running out of resources”. I still saw the mess is caused by intervention and will only lead to more intervention and so on and so on….

    “Wealth redistribution, say isn’t that what the major capitalists are doing” It’s “corporate socialism”. Super. “Centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly.”-Karl Marx. Like I said, I woke up and Hugo Chavez was in the White House.

    Deep sigh…. anyway, my original thought was that the Ambassador was a cool old building but in the end if it isn’t economically feasible to keep it then it has to go. If you can’t rent it out or find some other use for it then that is the market trying to tell you something.

    If I was king there would be a lot of these in the city……


  37. Patrick says:

    I have enjoyed the intellectual fervor of this thread but I find it disheartening to see such and an astute free-market capitalist completely ignorant of Adam Smith’s “other book.” You know, the one concerning moral economics. The sentiments in that writing go a long way to explaining why buildings and spaces used for social gatherings are of great importance to any urban place and have innate value beyond the altar of the Almighty US$

    Shudder if you must!

  38. STL Realtor says:

    I wish they could make a more high tech parking garage. maybe one that functions like a motorized tie rack.

  39. john w. says:

    Tim, you’re still in here? the Free Enterprise Institute and Investor’s Business Daily are always looking for willing and combative flatland righties like yourself. You and Grover Norquist would enjoy a few beers at the bar. BTW, I’ll take Hugo Chavez over the current administration and the diseased republican party any hour of the day. We’d be better off, frankly.

  40. john w. says:

    Why is it that every time the diseased republican party is in power for any sustained period of time, the exposed corruption is startling (or, perhaps not), the meaningless but breathtakingly costly and deadly military engagements abound, the brash disregard for our own foundational historical document in the Constitution is flaunted, and the nation’s economy swirls around the flushing toilet bowl like the dark brown boats of human digestive relief?

  41. john w. says:

    …well, john w, because they don’t care! Don’t you know that already?

  42. gatsby says:

    The Plaza:
    True story – the plaza was designed specifically so that nobody would use it. Thus, no seating. They were concerned with the homeless and other “undesirables” hanging around. It worked.

    #1) Fannie/Freddie are/were GSEs.
    #2) The Democrats took the lid off of those borrowing limits (at a preferred GSE rate) and as a result they bought and held those mortgage backed securities to get better returns (to boost their stock price) rather than selling them off. They held trillions, enough to become a threat to the entire banking system. Greenspan warned of this – he was right – and that’s why he retired when he did.

    That being said, plenty of blame to go around with the unintended effects of regulation and good old-fashioned greed being a couple of major players. Gotta love those rating agencies . . .

  43. Greg says:

    John W. – One of these days we are all going to have to stop blaming our issues on our party system and realize that it’s only to our detriment that we continue to bicker about Republican’s or Democrats. Politics is just a means for diving us up so that the status quo always trumps progress. Divide and conquer.

  44. john w. says:

    Greg, that stopping the blaming thing should’ve started eons ago, and without a parliamentary structure more akin to those existing in western Europe, for instance, where proportions of election victories are seated in the body by the parties that won them, we’re on an indivertible path to the frustrating divisiveness that you say has to stop. “Politics is just a means for [dividing] us up so that the status quo always trumps progress”- Wow… I thought I was a hopeless pessimist when it comes to politics, but that’s just downright cynical. If you’re incapable of evaluating party behaviors and seeing critical disparities between the actions of each, these past 8 years at the least, then you haven’t been paying attention.

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