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Downtown Business Not So Good for Good Works

The giant ribbon-cutting scissors are barely back in their box and Good Works is pulling the rug on their second location, located on Washington at 9th (Banker’s Lofts). I attended the ribbon cutting on December 13th and I must say it was an exciting time, the ribbon cutting for Flamingo Bowl was later that same day.

Above: Deputy Mayor Barb Geisman, Ald Phyllis Young, the store manager and Jim Cloar from the Downtown Partnership cut the ribbon on December 13th, 2007.

In the Post-Dispatch on the 24th of this month the news of their closing:

In the latest blow to downtown St. Louis, Good Works Inc. will close its home-furnishings store next month due to a lack of new customers.Many of the shoppers who visited the store at 901 Washington Avenue were the same ones who frequented the Good Works store at 6323 Delmar Boulevard in University City, said Chris Dougher, one of the owners. Co-owners Dougher and Rita Navarro plan to expand the store in the Delmar Loop.

“We just aren’t generating new business,” Dougher said of the store on Washington Avenue. “It’s a huge disappointment, but we can’t foresee it changing in the near future.”

The 8,000-square-foot store, which opened in November, was one of the larger retailers to locate downtown in recent years.

The store on Delmar, which sells contemporary furniture and accessories, has been successful since opening at that location about 11 years ago.

The owners decided to open a second store on Washington Avenue because they wanted to be part of the downtown renaissance and thought it would become the next Loop.

However, a soft economy has slowed downtown loft purchases, store openings and retail spending.

On opening day I wrote:

“I wish Good Works the best of luck and hope they do get all the support they need from the city — and some on-street parking out front.”

Just imagine the loop as four traffic lanes and no on-street parking, it would totally kill the vibe that it has. That is what exists in front of the Good Works store on Washington — it is a poor pedestrian & retail environment. To do well they needed lots of customers and the area to the immediate East is a dead zone — so dead the taxi cabs get to use the sidewalk as a taxi stand. The loft crowd just doesn’t walk by this location on the way to get groceries, dinner or drinks. Too few people do walk by. OK, back to parking.

As I’ve written before I think so much of St. Louis is auto centric with too many drive-thrus and surface parking lots measured by the acre. Even downtown it is hard to take pictures without getting a damn parking garage in the image. So how can I be arguing for on-street parking? On-street parking does a number of very beneficial things for an area. First it reduces four traffic lanes down to two — much friendlier. This also helps to slow down the traffic on the street. People parking and getting in/out of their cars & feeding the meter creates activity on the street. And finally having parking in front of the store decreases the perception that downtown has a parking shortage. When someone arrives they may have to park in the next block or two but the fact that someone got to park out front helps give the impression that parking is fairly easy. This is not to say that a few on-street spaces out front would have provided a steady stream of customers but it would have changed the feel of the area for the better. Certainly more Loop-like.
Of course they recognize they were basically stealing customers from their Loop location. Not much you can say about that except it takes a lot of marketing to increase a customer base. The Loop didn’t happen overnight and neither will retail downtown. For many places the rents far exceed the number of customers.

This is why we need to take immediate steps to make downtown more pedestrian/retail friendly. On-street parking needs to be added where it doesn’t exist, add street vendors selling hot dogs, toasted ravioli, t-shirts, whatever. Street performers would also be a nice touch. The sidewalks need life to have a good stream of retail customers. If we are not quick to act I can see much of downtown being just a restaurant zone with very little retail.


St Louis Centre; Different Owners, Different Standards

In 2005 the failed downtown mall, St. Louis Centre, was at the center of Mayor Slay’s priorities. At the time the Mayor and others were busy pushing Centre owner Barry Cohen to tear down the sky bridge that crosses over Washington Ave and move forward with redevelopment.

From the Mayor’s blog on Sept 25, 2005:

Stories in the business pages last week confirm the obvious. Barry Cohen, the owner of St. Louis Centre, is stalled. After a summer of fumbling, Mr. Cohen lost the funding proferred by Downtown Now’s Tom Reeves to demolish the skybridge.

Since purchasing the downtown mall more than a year ago, Mr. Cohen has promised, announced, floated, and projected some plans – none of which has come to anything. It is not clear to me whether he is hapless or canny, hoping for a profit on the $5.4 million the Biz Journal says he paid for the property.


As Tom Reeves told us, there’s plenty else to do Downtown. Meanwhile, we’ll keep sending Mr. Cohen those tax bills.

Wow, he had the mall for a whole year and the mayor calls him out. Slay supporter, now former developer John Steffen, was treated differently from day one:

Friday, February 17, 2006

This is a note to every developer hoping to be able to make a deal in the City and to every citizen hoping for redevelopment: John Steffen has announced ambitious plans to turn St. Louis Centre and the One City Centre office building into a mixed-use development.

These plans are possible because a public/private team, including Barb Geisman, Rodney Crim, Rollin Stanley, and Tom Reeves, kept their eyes on the goal line — not the headlines.

Not every real estate transaction can be negotiated in a blog.

I congratulate Barb, Rodney, Rollin, and Tom for their discipline — and I wish John good luck in getting this done.

This was well over two years ago and today the mall is totally vacant and the bridge still hovers over the street. Pyramid is out as developer with their equity partner Spinnaker taking over the now very stalled project. In fact, as reported here a week ago, Steffen and his company are out of the development business completely. Does this mean that Geisman and company dropped the ball? Were they all too cozy with Steffen?

Oh wait they did manage to give Steffen a sweetheart deal — a TIF backed by the city’s general revenues. That was also in 2006.

In the year and a half since then we’ve seen only slick marketing — drawing a line around a few blocks and calling it a district, The Mercantile Exchange or MX for short. That is almost as clever as the cards calling Ballpark Village a six block area (Broadway/5th to 8th and Clark to Walnut is 3 blocks no matter how many times they say otherwise).

So my question is this —does the city-backed TIF deal run with the property regardless of who takes over? If so, how long does Spinnaker have to complete the project? A year? Five years? A decade?

I think Steffen wanted this project so the city put up roadblocks for Cohen so he’d be forced to sell to Steffen.

Finally on Wednesday KMOX reported Pyramid’s story with greater detail and certainty than I had last Friday:

The developer of major St. Louis projects…St. Louis Centre and the former Dillard’s building, in the Mercantile exchange project…is getting out of the development business. Pyramid Construction’s John Steffen made the announcement through Steffen’s attorney Attorney Steven Goldstein… Problems in the real estate lending market are the main reason. Goldstein says Pyramid is currently working with other developers, investors, lenders and the city to make a transition for its development projects…but will continue to operate it’s property management division…which oversees a thousand apartment units in the city and surrounding area.

For someone with $609 million in development on his plate, Steffen has gone on a crash diet. Two years ago Steffen had this to say;

“We literally have more people offering to finance us than we have projects to finance,” Steffen said. “I need more projects because I have banks wanting to do business with me.”

Our city’s leaders bought Steffen’s hype. Or did Steffen buy off their better judgment with generous campaign contributions and illusions of success? Regardless our leadership has once again failed us. They claim Steffen was a victim of the current crisis but the roots of this go way back (see my post from June 2006) .
Perhaps we would have been better off giving Cohen a chance to prove himself? Of course then many of us wouldn’t have been able to enjoy the fancy parties thrown by Steffen for each project he announced. We sold out for some sushi.

I do hope all their projects are assumed by others and that they perform well. I also hope the next time we’ve got a developer bragging about his ability to get financing that we recognize the red flags.


Copia the same Nearly Four Months After Fire

On the morning of December 29th Copia Urban Winery went up in flames — ruled arson by investigators. The following message was posted on their website within days after the fire:

We regret to inform you that Copia Urban Winery and Market will be closed temporarily due to an unfortunate fire. The Copia family would like to extend their gratitude to all of you for your dedicated loyalty and support. We apologize for any inconveniences this occurrence may have caused. Plans to rebuild are already in motion, and updates will be posted regularly. We look forward to seeing you very soon.

Nearly four months later the Washington Ave restaurant remains boarded up with no signs of rebuilding taking place. The website is the same. To my knowledge there have been no arrests either. With so much good stuff happening on Washington Ave it is unfortunate to not see something happening here.


City Policy on Street Vendors Counter to Desire for Vibrant Streets

Bustling sidewalks and numerous food vendors are hallmarks of great urban streets. Food vendors sell everything from hot dogs, pretzels, nuts, ice cream, water/soda, kabobs and all sorts of other street food. In St. Louis our laws severely limit food & other street vendors leaving our sidewalks less than lively than they could or should be.
By design food vendors are limited to the CBD with a maximum number of 10 permits being issued. Yes only 10 permits are issued for the entire city. When I was in Toronto in 2006, for example, I could often see 10 vendors up and down streets from a single position. All cities place limitations on the use of the public sidewalk — that is reasonable. But there is a point where you can get so restrictive then you don’t achieve the type of environment that you want. More pedestrians would certainly attract more retailers, residents and businesses.

The argument against an increased number of food vendor permits is that they compete with established restaurants that have greater investments in their location and such. I don’t personally buy into this argument.

The person seeking a nice sit-down lunch isn’t going to grab a $3 hot dog just because they pass a vendor. Similarly, the person that wants a veggie dog with sauerkraut isn’t necessarily going to eat out an a restaurant if said dog is not available from a vendor.

We never have all 10 vendors out at one time. The hot dog vendors we do have lack a veggie dog option — very frustrating to this fan of street food. Every vendor I encountered in both Toronto and Vancouver, for example, offered veggie dogs. I see a potential void in the market here but these vendors have a lock on all the permits — new competition offering more choice is not an option.

Street vending is a

great way to start a small business. Although the carts are not cheap, they certainly require less upfront capital investment than many other businesses.

Vending in the city is limited to a few small districts such as Soulard Market, a section of South Broadway just South of Meramec and a portion of downtown:

A. “Downtown Vending District” shall mean (1) the area bounded by the Mississippi River on the east, Cole Street on the north, Tucker Boulevard on the west and Interstate Highway 64/U.S. Highway 40 on the south; and (2) the area bounded by Fourth Street on the east, Interstate Highway 64/U.S. Highway 40 on the north, the former Ninth Street (vacated by Ordinance 9191) on the west and Gratiot Street on the south.

So while our leaders talk about creating a 24/7 downtown it is clear that is all hot air — they are not doing the things necessary such as totally revising our vendor laws. Currently vending is only allowed from 6am to 11pm. Hardly 24/7. For more information on the city’s vending laws see Revised Code Chapter 8.108A.

Nothing prevents the selling of newspapers — freedom of the press and all — but many newsstand vendors in cities like New York also offer items like candy, water, books and perhaps item targeted to tourists like t-shirts and film. Under St Louis’ law, that would require being inside one of the few & limited vending districts and getting one of the very rare permits.

I’d like to see the sidewalks in our commercial districts teaming with vendors as well as have the storefronts of local businesses spilling out onto the sidewalk.

The sidewalk area in front of the convention center consumed by an ill-placed taxi stand should be packed with all sorts of vendors. Around Metrolink stops downtown we should also see concentrations of vendors. Vendors should also line the sidewalks leading to/from the arch. When people leave the Fox after a play there should be vendors offering street food as well as play-related merchandise.
If the city were to increase the number of permits and open up all the sidewalks to vending I think we’d see more vendors in the market. This would be a very good thing. And I’d be able to get a vegetarian hot dog with mustard and sauerkraut.


State & City Help fund competition for existing grocery store

Last month Mayor Slay made an announcement many had been expecting:

Schnucks will build downtown’s first full-service grocery store, a 20,800 sf urbanized version, in the Missouri Development Finance Board’s Ninth Street Garage at 9th and Olive Streets.

I guess I am not clear how mayor Slay defines “full-service.” City Grocers opened in October 2004 and offers this downtown resident everything I expect from a grocery store. Of course, I don’t expect to fill a prescription at a grocery store. Nor do I expect to get mylar balloons & florals from a grocery store. I expect groceries.
The Mayor continues:

This is an important step forward for downtown. I can’t tell you how many times people have asked me why downtown doesn’t have a supermarket, and where downtown residents shop. Now we have a great answer to both those questions — we will have a Schnucks downtown later this year or early next year, and downtown residents will shop at it.

And what exactly has the Mayor told all these many people asking about where to shop ? Hopefully City Grocers.

The business journal had more:

It will cost $7.56 million for Schnuck Markets Inc. to build out, stock and open downtown St. Louis’ first full-service grocery store. But the family-owned supermarket chain is getting help.

Lots of help — from tax payers of course.

Schnucks will pay $3.42 million necessary for tenant improvements, inventory and other opening expenses at the downtown location, at Ninth and Olive streets, according to state finance board documents. The remaining money will come from a combination of state, federal and city subsidies.

“If we didn’t have the public support, it wouldn’t be a viable project,” said Scott Schnuck, chief executive of Schnuck Markets. “We’re starting with a space that wasn’t designed for a grocery store.” The location will require a leveled floor, extensive wiring and other improvements, he said.

Not designed for a grocery store? Who’s fault is that? Schnuck’s development arm DESCO was involved in building the garage. And in razing the National register listed Century Building. And in suing two downtown property owners who believed a parking garage facing the Old Post Office would be a detriment to downtown.

Does this mean they could not lease the space to anyone else?

Back to the article:

The grocery chain will receive $1.1 million in state funds from the Missouri Development Finance Board (MDFB), $1.29 million in proceeds through the federal New Markets Tax Credits program and $1.75 million from the city of St. Louis through a development agreement that will operate like a tax increment finance (TIF) plan, according to a resolution approved March 18 by the state finance board. The city’s Board of Aldermen approved the development agreement March 14 and has sent its bill to Mayor Francis Slay for his signature.

So tax dollars are now being used to buy inventory??? Inventory that will be sold for profit! WTF?  Meanwhile we have a grocery store already — just not one that is heavily subsidized.  Granted prices will likely be less at this new Schnucks compared to City Grocers.  So we are helping buy food for downtown loft dwellers.

Do we really want the state and city government handing out favors to help one business at the risk of harming another?  What message does this send to someone looking to start a small business in the city?  That once you’ve taken a huge financial risk and proven the market does exist we will swoop in and give favors to our wealthy buddies so they can steal your customers!
From the same article on the new store; “it will have a pharmacy — something that’s been missing downtown since Walgreens left a few years back.“  Walgreens, ironically was located in the very same spot — on the ground level of the Century.  Walgreens was booted out so the building could be razed for a parking structure.

It will be nice to see a new Schnucks without a massive treeless surface parking lot out front.