In the mid-1990s, downtown St. Louis was hemorrhaging jobs, and a vacant garment district in its central corridor only accentuated the blight. Over the last five years, however, the area has undergone a major transformation.
Investment in downtown over the past five years totals $2.5 billion, according to Downtown Now, a nonprofit organization whose mission is to encourage downtown revitalization. St. Louis is playing catch-up because the city missed out on an expansion period in the '90s that other cities took advantage of, acknowledges Brad Beggs, a principal withStrategies, a St. Louis-based real estate and development consulting firm.
Life is returning to downtown, however, withunder way on the new St. Louis Cardinals baseball stadium. The old Busch stadium is slated for demolition, with a “Ballpark Village” development to occupy six blocks of the old stadium site with retail, office and entertainment.
As part of the development agreement with the city, the St. Louis Cardinals are responsible for ensuring at least $60 million in development goes into two blocks of the six-block Ballpark Village. The Cardinals' organization and downtown boosters anticipate the new stadium will generate slightly less than $400 million in developments surrounding the ball park.
On the northern end of downtown, large entertainment developments are also taking root, with Glendale, Calif.-based Pinnacle Entertainment Inc. planning a $208 million casino and hotel development in the Laclede's Landing entertainment district. Pinnacle has also committed to investing another $50 million in a residential, retail and mixed-use development. Additionally, St. Louis-based developer BDP is working on a separate development in downtown's Bottle District that includes a $200 million project with restaurants, bowling and an indoor racing facility.
Coinciding with the surge of new ballpark and entertainment developments is the $60 million loft conversion of the 470,000 sq. ft. historic Union Pacific building in downtown's central corridor. The downtown loft trend began in 2000 and has since produced 912 lofts to date, with 660 additional lofts planned this year. The downtown loft market has a vacancy rate just over 10% compared with an apartment vacancy rate of 18%, says Jim Cloar, CEO of the Downtown St. Louis Partnership, an association of downtown businesses, residents and property owners.
So, how did such a blighted urban area get back on the good foot? The decision of businesses, developers and city government to work together about five years ago got redevelopment started, says Tom Reeves, executive director of Downtown Now. Banks also played a role by utilizing historic tax credits, a state development tool. By selling tax credits on the market, banks effectively made the tax credits transferable.
Those tax credits, given for 25% of the value of a project, have been critical to redevelopment, according to developers and downtown boosters. Springfield, Ill.-based Parkside Tower LLC, which recently purchased the Union Pacific building for redevelopment, plans to make use of the credits. Public financing is necessary to make any downtown project work, said Kirk Jefferis, a Parkside manager. “If you keep that window open another five years, you might see an amazing rebound in downtown St. Louis.”