Home » Economy » Recent Articles:

Walkable environs still seeing investment

The economy tanked and work stopped.  New strip centers on the suburban fringe are not getting built and many that exist are quite vacant.  But in older established areas we are seeing individual buildings and spaces within buildings get renovated.

It has been a joy watching crews working to renovate the interior and exterior of this building on Washington Ave.  The detailing around the openings on the ground level had been badly damaged over the years but they are repairing it.  The big projects are on hold but the small projects are so much more exciting to me.

– Steve Patterson

 

Starting bid 900K

February 16, 2010 Downtown, Economy, Real Estate Comments Off on Starting bid 900K

The handsome building at 1701 Locust was sold twice in 2005: for $1.25 million in August and for $1.8 million in December 2005.  Next week it will be auctioned online with bids starting at 900K.  Ouch!

Many buildings downtown faced similar issues.  When times were great building prices rose quickly but they have cooled even faster than they heated up.

Nothing appears to have been done, except architectural drawings for lofts.  This 4-story building contains over 76,000sf.  From the listing;

“Exceptional user purchase or redevelopment opportunity. The Property is a vacant office building measuring approximately 76,000 sf in downtown St. Louis. The property is an ideal candidate for a user purchase or redevelopment to mixed-use of commercial and residential. Phase I and Phase II applications for local, state and federal historical tax credits have been completed and approved, which provide for tax credits of 25% (state and local) and 20% (federal) of eligible costs and expenses of renovations to offset state and federal income taxes.”

It is located a block West of me so I hope someone will buy and rehab it. There are plenty of for sale condos on the market already so rental units makes more sense currently.  More information can be found at Auction.com.

– Steve Patterson

 

Recovery Act high-speed rail announcement in St. Louis

ABOVE: Dr. Ed Montgomery (center) at press cponference in St. Louis on 1/28/2010.
ABOVE: Dr. Ed Montgomery (center) at press cponference in St. Louis on 1/28/2010.

Yesterday, across the country, announcements were being made regarding $8 billion in federal grants from the Recovery Act.  One of those announcements took place in St. Louis.   I was there for the announcement and captured the entire press conference on video so you can view the entire event.

#1 – Opening with Missouri Governor Jay Nixon and Dept Admin Karen Rae (Dept Admin Transportation Dept):

httpv://www.youtube.com/watch?v=bv-_Ol3yVtA

#2 – Dr. Ed Montgomery (White House Exec Dir for Auto Communities and Workers):

httpv://www.youtube.com/watch?v=6nPtfGJw9hg

#3 – U.S. Congressman Russ Carnahan (D-3rd):

httpv://www.youtube.com/watch?v=v4Pml8wxnmo

#4 – Question  & Answer:

httpv://www.youtube.com/watch?v=w_lqGfRz0RM

#5 – Missouri Senator Joan Bray (D-24):

httpv://www.youtube.com/watch?v=HqdKuMR8BPI

Another press conference will be held today (Friday 1/29/2010) at the Amtrak station in Alton IL.  It will be years before the St. Louis-Chicago connection is complete but as was said this $8 billion is only a down payment.  The federal government subsidized the interstate highway system for decades while ignoring passenger rail. Chicago will be the center of a network of high-speed rail lines, our proximity is good.

“A White House official visited St. Louis today to announce $1.1 billion in stimulus money for high-speed rail between St. Louis and Chicago and another $31 million to upgrade passenger rail service between St. Louis and Kansas City.” (St. Louis-Chicago high-speed rail gets $1.1B in stimulus)

Improving city-to-city rail transit will increase the ability for someone living in the St. Louis region to go car-free.  Residents on both sides of the Mississippi River can take MetroLink to the St. Louis Amtrak station and travel to Chicago and beyond.  I look forward to taking a high-speed train to Chicago.

– Steve Patterson

 

Projects getting done despite the economy

December 18, 2009 Downtown, Economy, Midtown 17 Comments

We all know the economy crashed.  There are signs of recovery but with the unemployment rate at 10% on average (it is up to three times higher for some population segments), a recovery is a long way off.  I know many architects that are either unemployed or with very little work.  If they are not working now that means the construction industry won’t be working in 6 months.

Despite the stark realities of 2009, St. Louis did see some projects move forward.  Presumably most of these had financing in place prior to the financial meltdown.

I present four of many:

SE corner of 20th & Locust nearing completion
1818 Washington Ave. (disclosure: developer is a client/advertiser)
1818 Washington Ave. (disclosure: developer is a client/advertiser)
P.W. Shoe Loft Apartments, 3427 Locust in Midtown
Spring Street Lofts at Spring & Forest Park Blvd.

Hopefully we will see many more small-scale re-use projects such as these begin in 2010.  Financing for projects the size of these is a major challenge but nothing like a project the size of say Ballpark Village or the long-stalled Bottle District.  One building at a time is how you rejuvenate a city.  That can be through renovation or new construction.  I’d much rather numerous small projects spread out across the city than a few big projects concentrated downtown.

– Steve Patterson

 

Successful Northside Job Growth

The first phase of the Northside redevelopment project as proposed by Paul McKee is to focus on the “job centers” and mixed use areas. Numbers are being thrown around as to imply thousands of jobs will be created by this project. I wonder what measure will be used to declare the project a success with respect to jobs by those proposing the plan.

The project will require a lot of construction jobs, which is a fact. These are people that would not have been needed otherwise. The time frame of twenty years implies the jobs will be needed for an extended duration compared to most construction projects. Despite that scope and time frame, do construction jobs truly help grow the area? Even with such a long time frame the jobs are only temporary. It is unreasonable to assume that someone could graduate, make a career of the project, and retire when it is done. Based on retirement accounts requirements they would still have another twenty years of work.  Shouldn’t the expectation for jobs created be that the jobs are permanent? Yes,t his economy has shown that no job is truly permanent, But no matter the time frame  construction jobs are by nature temporary. The 40/64 concrete river project demonstrates that. When 40 is complete construction will continue in the region, but will all those workers stay in St Louis? I doubt it. Some of them will return when the new Mississippi bridge starts up in full. There will probably be projects after that, but I don’t want the fate of the region’s job growth to depend on never ending highway work.  Local restaurants can’t move around the region at will to follow the construction.  They need permanent customers to keep open.

Looking at the McKee track record for development makes me wary, too. He touts his Winghaven and NorthPark projects as examples of what he and his associates can accomplish. The two projects boast two of the regions larger employers in Express Scripts and MasterCard. Unfortunately both these employers were already in the region before they moved into their new offices.  More specifically, they were in the same city. Sorry, Maryland Heights, I hope you didn’t need those taxes. True, Express Scripts was threatening to leave the area and NorthPark help keep them here, along with some tax incentives. Also, MasterCard had outgrown its offices in Maryland Heights and needed new digs. But in the end, McKee merely helped keep jobs from leaving. Preventing negative growth is not the same thing as creating new growth. Who does McKee plan on luring into the north city for this new project? I doubt Edward Jones is going to give up all their brand new buildings along 270.  Do you think InBev is tired of the historic brewery yet?

Additionally, there is the dilemma of existing projects already in work to compete with. Winghaven still has space available for development. NorthPark is basically a field with nice streets. Express Scripts isn’t even in the development, instead choosing to be south of I-70 next to UMSL. The old Ford Plant has been wiped out of existence and Hazelwood is dieing to get some tax base back on that land. The current economy has opened up business space in areas like Earth City and Westport. The occupancy rate downtown offices are not that great. And these are just some examples of places in the region vying for new jobs. What if the Northside development center gets all the new jobs in the coming years and every where else in the metro area remains stagnant?

Finally, the current economic conditions do not bode well for new jobs. Every region of the country is going to fight to keep what they have. Other cities are constantly offering huge incentives to attract growth. Just look at what it took to keep Express Scripts. What exactly does Paul McKee have to offer to convince a company to move to St Louis when it is hard to keep the ones already here? St Louis will be wrangling with every other city in the country for each new job. Not to imply it is a contest St Louis cannot win, but it won’t be as easy as some people are implying. The Lou is not the only place that will be offering new buildings and tax incentives in the coming years. That still leaves the possibility of start-ups as the source of new jobs. Might the next Google or Facebook start up in north St Louis? A future global company setting up roots in the new development could be the pinnacle of the project. Unfortunately, as many failed businessmen will tell you, there are more failures than success with new companies.

How will you measure the success of the project with respect to jobs:

  • For just having jobs associated with it?
  • Having low end retail jobs new to the city?
  • Pulling jobs into the city from around the metro area?
  • Preventing jobs from leaving the metro area?
  • Getting new jobs at the cost of other developments in the metro area?
  • Being the founding location of a future Fortune 500 company?

Permanent new to the region jobs, while not sucking up all growth in the metro area, will be my measure of success.

– Kevin McGuire

 

Advertisement



[custom-facebook-feed]

Archives

Categories

Advertisement


Subscribe