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Lots of Entrepreneurship Happening in St. Louis’ Railway Exchange Building

Historically cities have  been incubators for entrepreneurs, bringing people together to exchange their goods. Many well-known early St. Louisans became wealthy selling goods/services to the growing city and country. Then population shifted to the suburbs, manufacturing jobs went oversees, and big corporations took the place of mom & pop businesses, online ordering with overnight delivery made going to stores quaint, etc.

May Department Stores, founded in 1877, moved to St. Louis from Denver in 1905, operated out of the upper floors of the Railway Exchange Building — over Famous-Barr. When May was acquired by Cincinnati-based Federated Department Stores in 2005, the Famous-Barr became a Macy’s and the number of employees in the upstairs offices shrank considerably. The Railway Exchange Building was sold to a developer, Macy’s consolidated to 3 floors from 7 or 8, but it is closing next month. Knowing all this you might think nothing is happening in the Railway Exchange — but you’d be very wrong!

The Railway Exchange Building, where Macy's is now on the lower 3 levels, has some very exciting things happening now, tomorrow I'll share what's going on in the former May Company offices.
The Railway Exchange Building, where Macy’s is now on the lower 3 levels, has some very exciting things happening now, tomorrow I’ll share what’s going on in the former May Company offices.

The 12th & 13th floors are the T-REx business incubator.

T-REx is a coworking space and technology incubator located in the heart of downtown St. Louis, Missouri. We’ve taken 60,000 sq/ft in the historic Railway Exchange Building and converted it into a hub for the St. Louis startup scene — now home to a growing community of entrepreneurs, developers, designers, mentors, educators and more.

T-REx now has 70+ business, with more coming.

The 12th floor lobby of T-REx
The 12th floor lobby of T-REx
Many businesses make their line of work visible to others.
Many businesses make their line of work visible to others, many are into fashion.
Paramount Apparel Manufacturing was founded in St. Louis in 1929 but moved to Bourbon MO in 1936. Today designers work at T-REx while manufacturing is in Bourbon & oversees. Click image for their website.
Paramount Apparel Manufacturing was founded in St. Louis in 1929 but moved to Bourbon MO in 1936. Today designers work at T-REx while manufacturing is in Bourbon & oversees. Click image for their website.
One entire section of the 13th floor is reserved for Arch Grant winners. The open center will serve to facilitate collaborations.
One entire section of the 13th floor is reserved for Arch Grant winners. The open center will serve to facilitate collaborations.

Arch Grants seeks to create a more robust startup culture and infrastructure in St. Louis. To increase employment growth and establish St. Louis as a place where entrepreneurs want to start and grow their businesses, Arch Grants offers startups funding in the form of grants and supports the startups as they remain or transition to downtown St. Louis. The Arch Grants Business Plan Competition helps to shape the image of St. Louis among aspiring entrepreneurs and others looking to have a formative role in building a new entrepreneurial climate in St. Louis.

Through the Business Plan Competition, Arch Grants selects promising startups to receive $50,000. Typically, taking venture capital forces an aspiring entrepreneur to sacrifice a significant stake in their company in exchange for funds. This process is often limited to ventures with access to the startup hotbeds like Silicon Valley, New York, and Boston. Arch Grants provides entrepreneurs with the opportunity to start a business with non-dilutive capital. In addition, Arch Grants supports the growth of winning companies by providing access to business networking and mentoring, free legal and accounting services, collaboration with local universities, and discounts on housing and affordable office space. After receiving an initial Arch Grant, startups have the opportunity to secure a second round of up to $100,000 in funding along with direct access to St. Louis-based angel investors.

To provide winners with the best chance of success, Arch Grants partners with comparable economic development endeavors in St. Louis that currently support business growth in the city including Innovation Venture Mentoring Service, St. Louis Regional Chamber and Growth Association, Regional Business Council, Washington University, St. Louis University, University of Missouri at St. Louis, Webster University, and Harris Stowe University. (Arch Grants)

I met a couple of recent Arch Grant winners during my visit to T-REx last week; Andrew Couch and Gilda Campos moved their startup from San Diego to St. Louis after receiving a grant.

Their main product/service is called CacheTown.
Their main product/service is an augmented reality technology called CacheTown, click image to view their promo video.

Couch & Campos rented a nearby apartment and walk to work, they don’t have a car. They said the decision to relocate was easy because of the enthusiasm of St. Louis to attract young businesses, they’d never have such an opportunity with venture capitalists on the West Coast.

Apparently other cities have spent big bucks to set up incubators of this size, but here they just had to repaint.  Some of these companies will fail, some will stagnate, but others will prosper. Let’s just hope the latter stay in St. Louis as they expand.

— Steve Patterson


Poll Results On Downtown Macy’s

Just over half (50.77%) the readers who voted in the poll last week felt the closing of the downtown Macy’s will have a negative/very negative affect on downtown. Here are the results:

Q: How will Macy’s closing their downtown location affect downtown St. Louis in the long-term?

  1. Negatively 47 [36.15%]
  2. Neutral 43 [33.08%]
  3. Very negatively 19 [14.62%]
  4. Positively 11 [8.46%]
  5. Unsure/No Answer 6 [4.62%]
  6. Very positively 4 [3.08%]

Here’s my take (not spin): I specifically included “in the long-term” in the question because I think the short-term effect will be negative, but will be neutral in the long-term. How long is long-term? I’d say 8-10 years, in this case.

Cities/neighborhoods are resilient places, provided they don’t pass a tipping point. For many of us that live downtown, Macy’s just wasn’t that important. I personally bought more from Macys.com than in the Macy’s store. When Macy’s closed both restaurants in the consolidation to 3 floors a couple of years ago I no longer had a reason to visit.    Previously I’d attend a monthly lunch in the St. Louis Room, then browse the kitchenware section afterwards, often making a purchase.

On the positive side I see the void as opening up the market so another retailer might consider a new store. The new urban CityTarget format comes to mind:

The Chicago store is housed in a 113-year old historical landmark constructed by architect Louis Sullivan in the heart of the city at the corner of State and Madison Streets. Nearby retailers include H&M, Forever 21, Office Depot, Nordstrom Rack, Sears and T.J. Maxx.

CityTarget stores are more expensive to operate and build, as they are housed in pre-existing spaces, Schindele said. In Chicago, for example, Target had to rip out old floors and strip dozens of coats of paint off of columns to give the store the CityTarget look.

CityTarget shelves are bright white rather than almond-colored. Mannequins, tested in one Target store, and brushed silver racks are used to display clothing. In a first for the Target chain, music plays in the Chicago and Seattle locations. (Huffington Post)

CityTarget stores are also located in Seattle, Los Angeles (2), San Francisco. Additional CityTarget locations are planned for Boston & Portland OR,  with additional stores in LA and SF.

Last month, in a different conference call, Target chief financial officer John Mulligan said the company was “very excited” about the CityTarget concept.

Target plans to open three more this year, Mulligan said. “And then, we’ve said all along, we’ll pause,” Mulligan said. “We’re pretty thoughtful about things like this. So we’re going to pause in 2014 and evaluate where we are at.” (Minneapolis-St. Paul Business Journal)

So even if Target can be interested it’ll be a while before it would happen. Other retailers might see an opportunity in the meantime.

— Steve Patterson


Poll: How Will Macy’s Closing Their Downtown Location Affect Downtown St. Louis In The Long-Term?

Macy's in the Railway Exchange building
Macy’s is located on 3 floors of the Railway Exchange building

You likely heard the news last week about the Macy’s store downtown:

Retailer Macy’s will close its downtown St. Louis in the Railway Exchange Center later this summer.

A final closing sale will begin June 2 and last 10 weeks. (KSDK)

Immediately following the announcement people were upset, but clearly not enough to keep the store open. The poll this week asks: How will Macy’s closing their downtown location affect downtown St. Louis in the long-term? The provided answers are:

  • Very negatively
  • Negatively
  • Neutral
  • Positively
  • Very positively
  • Unsure/no answer

These answers will be presented in random order in the poll (right sidebar) so the order doesn’t influence the results. You the comments below to share your thoughts.

— Steve Patterson


Press Release: More Strikes Hit St. Louis’ Largest Fast Food Chains

The following is from a press release:


Inspired by New York City and Chicago Fast Food Walkouts, St. Louis Workers Strike Major National Chains

First-ever St. Louis Fast Food Walkout; STL Can’t Survive on $7.35 Campaign Launches Calling For $15 and the Right to Form a Union without Retaliation; Aims to Get St. Louis’ Economy Moving Again

ST. LOUIS— Workers walked off their jobs at Jimmy John’s and McDonald’s Wednesday in the first-ever fast-food strike to hit St. Louis and more 100 workers are expected to join them today. In their one-day strikes of major national brands like McDonald’s, Jimmy Johns, Domino’s, Hardees and Wendy’s are on strike, the employees are calling for wages that support their families and the right to form a union without retaliation.

The workers’ campaign, STL Can’t Survive On $7.35, seeks to put money back in the pockets of the 36,000 men and women who work hard in the city’s fast food restaurants, but still can’t afford basic necessities like food, clothing, and rent. The Self-Sufficiency Standard for an adult with one child living in St. Louis County is $14.84 per hour working full time. If workers were paid more, they’d spend more, helping to get St. Louis’ economy moving again.

“There are days I wonder, ‘how am I going to get home’ because I can’t afford my bus fare,” said Patrick Leeper, who has worked at Chipotle for more than three years, “Sometimes I walk for more than an hour just to save my train fare so I can spend it on Ramen noodles. I can’t even think about groceries.”

Fast food workers bring $1 billion a year into the cash registers of St. Louis, yet most of these workers earn Missouri’s minimum wage of $7.35, or just above it, and are forced to rely on public assistance programs to provide for their families and get healthcare for their children. They’re coming together for $15 per hour and the right to form a union so they can support their families, and put money back into the economy.

“I’ve been at Jack in the Box for four years, cleaning and prepping food and all I get paid is $7.55 without any benefits,” said Anita Gregory, a mother of one, who is expecting her second child in the next few weeks. “I’m tired of having to struggle to survive while working so hard.”

It would take a typical St. Louis fast food worker minimum-wage full-time worker more than 1,300 years to earn as much as the CEO of YUM! Brands, which owns Taco Bell, KFC and Pizza Hut, made in 2012.

The two days of strikes here in St. Louis come just weeks after hundreds of fast food and retail workers went on strike in Chicago and hundreds more walked off their jobs in New York City. The strikes by low-wage workers began on Black Friday back in November, with hundreds of Walmart workers walking off their jobs. It spread weeks later to fast food, with workers embarking on the first-ever strike to hit the industry.

Low-wage jobs have accounted for the bulk of new jobs added in the recovery, and fast food positions are among the fastest-growing in St. Louis. Workers here, like those around the country, are increasingly joining together to fight for higher wages that will lift the economy.

“Workers in fast-food jobs are no longer freckle-faced teenagers looking for some summer pocket change,” said the Rev. Martin Rafanan, director of STL $7.35. “Increasingly, fast food jobs are the only options for St. Louisans, but these workers can’t even afford to pay for rent, food and bus fare. If the workers earned more, fast food workers would spend that money at local businesses here in St. Louis and help lift our economy.”

Founded in February of 2013, the St. Louis Organizing Committee is an independent union of fast food workers. The workers’ STL Can’t Survive on $7.35 campaign seeks a $15 an hour wage and the right to form a union without retaliation. The STL Can’t Survive on $7.35 campaign is supported by a coalition of dozens of community, labor and faith-based groups including: ACTION; Adorers of the Blood of Christ; St. Louis AFL-CIO; AFSCME Illinois Council 31; Aquinas Institute; ARAW/Jobs with Justice National; Ascension Episcopal; Bethel Lutheran; Coalition of Black Trade Unionists, St Louis, Central Reform Congregation; Central Reform Congregation; Eastern District Laborer Council 110; Eden Seminary; Epiphany UCC; Episcopal Diocese; Families USA; Gethsemane Lutheran Church; Jobs with Justice Workers’ Right Board; Kirkwood UCC; Missouri Jobs with Justice; MO Health Care For All; MORE; National Nurses United; New Life Evangelistic Center; Parkway United Church of Christ; People’s World; Personal UFCW655; Presbyterian Church USA; PROMO; ProVote; SEIU Health Care; SEIU Local 1; St John’s Catholic Church; St John’s Episcopal; St Joseph’s Catholic Church; St Margaret of Scotland; St Mark Lutheran; St Peter’s United Church of Christ; St. Pius; St Thomas United Church of Christ; Teamsters 688;The Bridge at Newtown; United Church of Christ in Afton; United Food and Commercial Workers 655; United Food and Commercial Workers 88; Wayman African Methodist Episcopal Church; Westminster Presbyterian; Westside Baptist; Young Activists United


National Microbusiness Conference in St. Louis May 5-8

St. Louis Comptroller Darlene Green hosted the kickoff event for the 2013 AEO national conference
St. Louis Comptroller Darlene Green hosted the kickoff event for the 2013 AEO national conference

Microbusinesses, those with 5 or fewer employees, are an important part of the St. Louis economy. These businesses, though individually small, collectively employee much of our region.

St. Louis beat out a couple of other cities to host a national conference on microbusinesses, it starts Sunday:

Welcome to the Association for Enterprise Opportunity’s 2013 National Conference, the nation’s largest premier microbusiness event.

This year’s conference promises to be the best and most comprehensive ever. Join us as we engage senior executives, investors, bankers, practitioners, policy makers and Administration Officials in dialogue about positioning microbusinesses to create jobs and help grow America’s economy.

AEO’s power-packed program will combine large plenary style talks with small, interactive workshops to help attendees learn how to seek out new sources of capital, understand new products and services delivery models and adopt best practices that will enable long-term sustainability.

The conference will be held May 5-8 at the Chase Park Plaza Hotel in St. Louis, Missouri as we ignite the power of microbusiness to change our communities! (Enterprise Opportunity 2013 Conference

I talked with Enterprise Opportunity’s President & CEO, Connie Evans, at the conference kickoff earlier this week, see her respond to me here.

The public is invited to attend the free marketplace of local microbusiness event Monday May 6, 2013 from 4:30pm-7pm. Chase Park Plaza (easily reached via the #10 & #95 MetroBus routes).

— Steve Patterson