Retail Market Livens Up in St. Louis

By Eliza Theiss, Associate Editor

Several retail-related news items made headlines in St. Louis recently.

On the traditional retail side was the sale of the Bellemore Village Center located at 3202 Nameoki Road. According to the St. Louis Business Journal, the 107,000-square-foot Granite City shopping center was sold by Village Shopping Center Inc. for $5 million to local investment group Bellemore Center LLC.   Buyers of the 100 percent leased property were represented by Neland Investment Management. Nelson McBride Development was chosen as property manager, probably not coincidentally as Bellemore Center LLC’s principals include Neland’s Nelson Grumney and Mark Nelson of Nelson McBride.

In other news, online retailer Cat5 Commerce has doubled its base-city presence, reports the St. Louis Business Journal. Cat5 now take up 20,000 square feet at 18167 Edison Ave. in Chesterfield.  The company invested $120,000 in the additional space. But it’s not only surface area that grew for the successful company: Cat5 also increased its employee roster from 22 to 40 in 2012, thus increasing its product base and decreasing shipping time. Furthermore, Cat5 projects a 40 to 50 percent revenue increase in 2012 – which could mean $27 million compared to 2012’s $18 million.

Cat5 has 10 online storefronts.

In other retail news, controversy continues to surround the Shrewsbury Walmart, after news surfaced that the national chain’s proposed Watson Road store would still happen, in spite of a Tax Increment Financing (TIF) commission’s rejection of the development. According to several reports, Mayor Felicity Buckley still expects the project, and more importantly $15 million in TIF, to be approved by the city of Shrewsbury.

According to the Saint Louis Front Page, the 172,000-square-foot Walmart Supercenter was first proposed more than two years ago, but was put on hold until December 2012, when a tax incentive package worth up to $15 million was put on the table for developer G.J.Grewe, acting on behalf of the big box giant. Criticism of the project continues to mount as the $46 milllion store, planned on the site of the dilapidated Kenrick Plaza movie theater on Watson Road would be only a 10-minute drive away from not one but two Walmarts, one in Kirkwood and on in Maplewood.

Photo courtesy of  Walmart’s Facebook page

Village Green and L3C Capital Partners Expand Multifamily Partneship in Creve Coeur, Lake St. Louis Markets

By Gabriel Circiog, Associate Editor

Village Green and L3C Capital Partners LLC have announced a new multifamily housing partnership in the St. Louis area. New York-based investment company, L3C Capital Partners LLC acquired a portfolio which includes four St. Louis multifamily communities. The four luxury apartment communities located in the Creve Coeur and Lake St. Louis markets–Cross Creek, Cove West, Westchase and Cedar Lakes–will each undergo multi-million dollar renovations.

Village Green Construction and Village Green Interiors, two Village Green companies, will lead the construction and interior design. Village Green’s St. Louis regional office will manage the communities.

In a recent press release, COO of Village Green, Diane Batayeh said: “We are excited to partner with L3C Partners with the addition of these four St. Louis communities to our Missouri portfolio, and look forward to a long and mutually beneficial relationship.” She added: “In addition to providing exceptional customer service, we look forward to exceeding ownership’s expectations with respect to the financial performance of these properties.”

The first L3C Capital partners LLC community to undergo interior and exterior renovation will be Cross Creek. The property, which was built in 1986, will be rebranded and renamed Waterfront Crossing at Creve Coeur.

“Village Green brings a history of success with similar type value-added assets. Its results-oriented culture aligns well with L3C’s focus on excellence and execution,” said Chaim Kiffel, principal, L3C Capital Partners.

Norfolk, Va.-based real estate investment firm Harbor Group International said its affiliates are putting $10 million into the purchase of the 1,447-apartment portfolio, St. Louis Post-Dispatch reports. According to Harbor Group the complexes sold for $115,190,763, and the average occupancy of the apartment portfolio is 95.5 percent.

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Photo Courtesy of: www.villagegreen.prospectportal.com

Dominium, U.S. Bank Open Affordable Artists’ Housing Financed by Tax Credits

By Gabriel Circiog, Associate Editor

Minneapolis-based Dominium has completed the newly renovated Metropolitan Artist Lofts. The grand opening ceremony for the property was attended by representatives from Dominium, financing partner U.S. Bank and the Grand Center neighborhood.

Located at 500 North Grand Boulevard in the Midtown St. Louis historic district of Grand Center, the Metropolitan building was originally built in 1908 and has stood vacant and unoccupied for many years. The historic building has now been transformed and features live/work artist lofts with upscale architecture and finishes.

Surrounded by museums, art galleries, restaurants and educational centers, the Metropolitan Artist Lofts will provide 72 units which are specifically designed as affordable housing to suit the needs of artists. Apart from the one- and two-bedroom apartments, the building also features studios for painters, sculptors and clay artists as well as sound studios with special soundproofing. The extra-wide hallways are transformed into gallery space, with picture hangers where residents can display their work. Residents will also have access to a dance studio and a fitness room.

“The Metropolitan Artist Lofts is a great use of a historical property that has stood vacant for many years,” said Jeff Huggett, vice president and project partner for Dominium. “We’re pleased to contribute to St. Louis’s vibrant art community and consider this rehabilitation a win both for our expanding Missouri portfolio and the residents of St. Louis.”

Debt and equity, including a construction loan, a first mortgage and close to $14 million federal and state Historic and Low-Income Housing Tax Credit equity investment, for the $20 million renovation was provided by U.S. Bank through its St. Louis-based subsidiary, U.S. Bancorp Community Development Corp. USBCDC also made a $1.8 million Affordable Housing Assistance Program donation for the benefit of the project.

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CORTEX Announces $186M Phase II in Biotech District

By Gabriel Circiog, Associate Editor

Phase II of CORTEX, midtown St. Louis’s bioscience and technology hub, will bring 384,000 square feet of additional lab and office space to the technology district. The total facilities space in the technology district will total over 1,000,000 square feet when the phase is complete.

Located at 4320 Forest Park Avenue, CORTEX was founded in 2002 through a $29 million investment from the founding partners Washington University in St. Louis, BJC Healthcare, University of Missouri-St. Louis, Saint Louis University and the Missouri Botanical Garden.

John Dubinsky, chairman of CORTEX, said: “Ten years ago we had a vision to transform an aging 200-acre industrial area into a vibrant, technology district. CORTEX has since become an unquestioned success, positioning St. Louis as an emerging, national center of bioscience, technology, and innovation.”

The $155 million first phase of the development resulted in approximately 950 technology and building management jobs and 124 housing units. Phase II of the development will result in another $186 million of district investment, including a $26 million MODOT I-64 interchange which will become the new gateway entrance into the center of the CORTEX district.

A new partnership with Wexford Science and Technology sees the national research park developer invest over $100 million in CORTEX. As part of the second phase, Wexford Science and Technology will acquire the CORTEX I building for $26 million and in December will purchase the 190,000-square-foot historic Heritage warehouse, located on Duncan and Boyle Avenues. The company will invest $73 million in lab and office renovation and will also contribute $7.35 million towards public infrastructure. Around 400 jobs are expected to be created in the Heritage building.

Phase II will also feature a new 200,000-square-foot, $45 million office building, constructed by BJC Healthcare which will house 1,000 employees.

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Rendering Courtesy of: www.cortexstl.com

Mills Properties Plans to Build $60M Apartment Community Featuring a 30,000-Sq.-Ft. Whole Foods Grocery

By Gabriel Circiog, Associate Editor

Locally-based Mills Properties recently announced plans to build a new apartment community in the Central West End neighborhood of St. Louis.

Located at 100 North Euclid, the seven-story building will also be the home of a Whole Foods grocery, the St. Louis Post-Dispatch reports. Bruce Mills, Mills Properties’ Chief Executive, said he has a letter of intent from Whole Foods Market to occupy the entire first floor of the future construction, a total of 30,000 square feet. The intent of Whole Foods to open a grocery store in Central West End is seen as a sign that the neighborhood has reached a certain desirability level. The store would become the grocery chain’s third in the St. Louis area after the ones in Town and Country and Brentwood.

The 100 North Euclid building will feature 176 market-rate apartments, including 12 penthouses, on six floors above the Whole Foods grocery and over 450 garage spaces, out of which 125 will be dedicated to retail. Part of the plan also includes improving the streetscape of the 4-way stop at Euclid and West Pine.

Mills Properties acquired the 1.6 acre site at Euclid and West Pine avenues in 2004. The company later demolished the 11-story Doctor’s Building to make way for a condo tower, but due to the housing market crash the site remained vacant until now.

Mills Properties will make a request for $10 million to the Tax Increment Financing Commission on Oct. 30th. Bruce Mills said the $60 million City Walk apartments could eventually be converted to condos due to the fact that condo mortgages are becoming more available than last year.

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Plan Courtesy of: www.millsapartments.net

Drury Development Plans to Break Ground on 210-Room Hotel, Restaurant Project In Brentwood

By Gabriel Circiog, Associate Editor

Drury Development Corp. is set to break ground on a new hotel and restaurant project in the City of Brentwood, Bola Akande City Administrator revealed.

Located on a 3.97-acre parcel of land at the southeast corner of Eager Road and Brentwood Boulevard, the project calls for the construction of a 135,000-square-foot 210-room hotel, which will include an 8,000-square-foot restaurant outparcel.

City officials have been collaborating with Drury Hotel, Saint Louis County and the Missouri Department of Transportation since 2008 on the project. Mayor Pat Kelly said he is happy to see additional progress.

Chuck Drury, president and CEO of Drury Hotels said: “As a St. Louis-based company, we are grateful for the opportunity to expand our presence in the area, and we look forward to providing travelers with a clean, comfortable, friendly place to stay.”

The City of Brentwood issued permits approving demolition and site clearance for a Drury Inn and Suites hotel and restaurant at the 3.97-acre site, which includes a vacated MoDOT maintenance area and the H.A. Rothman buildings. Site clearance is expected to start this month, and the building permit plans will be submitted later this year. The actual construction of the eight-story hotel is set to start in spring 2013, and the ribbon-cutting ceremony is scheduled for late summer 2014.

The City of Brentwood supports the project with public assistance in the amount of $5.75 million through a transportation development district. The St. Louis Business Journal reports a 1 percent sales tax on items sold at both the hotel and the restaurant will go to the city of Brentwood, together with a room assessment usage fee of $1 per occupied room night. The project was also awarded a property tax abatement of 100 percent of the value of the land for the next 10 years and 50 percent of all sales tax generated by the hotel for the next 25 years.

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Logo Courtesy of: www.druryhotels.com

First Phase of Cardinals’ $700M Ballpark Village Obtains Approval

By Gabriel Circiog, Associate Editor

The Missouri Development Finance Board has voted in favor of awarding $17 million in state and local tax incentives to help fund the $100 million first phase of the Cardinal’s mixed-use Ballpark Village project. The state of Missouri is expected to contribute around 25 percent of the bonds.

William DeWitt III, president of the Cardinals, said: “Today is a significant milestone in a long journey to make Ballpark Village a reality.”

The major league baseball team and their development partner, Cordish Companies, plan to complete the first phase of the project by Opening Day 2014. Chase Martin, development director of the Cordish Companies stated, “we are grateful for the consistent support we have received from city and state leaders. Ballpark Village will be worth the wait as it will be one of the premiere entertainment developments in the United States.”

The first phase of the project, expected to create over 750 construction and more than 430 permanent jobs, includes the construction of 100,000 square feet of retail and entertainment space along Clark Street, next to Busch Stadium. The project will also incorporate streets, parking and site infrastructure to support future phases. The entire $700 million mixed-use project will stretch over seven blocks.

The Cardinals venue, called Cardinals Nation, will anchor the first phase. With a total of over 30,000 square feet on three levels, Cardinals Nation will include a two-story restaurant, a 300-plus seat seating deck with views into Busch Stadium and a Cardinals Hall of Fame and Museum. A second construction will house a two-story, 20,000-square-foot Anheuser-Busch venue with a festive rooftop party deck, which will also offer views into Busch Stadium. The two signature structures will be united by a retractable glass canopy covering the event space, dubbed as the “Live at Ballpark Village!”

The Cardinals began their investment in downtown St. Louis with the opening of the privately financed $411 million Busch Stadium in 2006. The master-planned Ballpark Village will be a mixed-use retail, entertainment, office and residential district developed in partnership by the St. Louis Cardinals and Cordish Companies, the developer behind the Kansas City Power & Light District.

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Renderings Courtesy of: www.cordish.com

Balke Brown Transwestern Plans 280-Unit Apartment Project at The Highlands

By Gabriel Circiog, Associate Editor

A new residential project is set to be added to the 26-acre Highlands mixed-use development, the St. Louis Post-Dispatch reports.

Steve Brown, a principal at Balke Brown Transwestern, said site work is already underway for the new 280-unit apartment complex, known as Cortona at Forest Park. The project is situated at the southwest corner of the Highlands and will more than double the number of apartments at the mixed-use development.

Located on the site of the former Blues hockey arena and demolished in 1999, the Highlands features two office buildings, a hotel, a restaurant, medical offices and two loft-apartment buildings. Balke Brown is also planning a fourth office building.

Balke Brown appointed Dallas-based Humphreys & Partners as architect of the Cortona. The five-story building will feature approximately 200 one-bedroom apartments and 80 two-bedroom units. The development, which gets its name from a picturesque Tuscan town, will have an Italian villa-style exterior, with earth-tone panels. The project is slated to be completed in early 2014. Amenities will include a 7,000-square-foot clubhouse, an outdoor kitchen, a spa and a saltwater swimming pool. The residents will also benefit from a car-detailing service, a leash-free pet park and close proximity to the Forest Park Community College and the Forest Park Hospital. Monthly rents are expected to range from $1,000 to $1,750.

The $42 million project is financed by the AFL-CIO Building Investment Trust, which in the past years also invested in other St. Louis projects such as Park Pacific and the Laurel.

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Dominium Proposes $100M Mixed-Use Conversion of Landmark Arcade Building

By Gabriel Circiog, Associate Editor

Dominium Development is offering $6 million to the city’s Land Clearance For Redevelopment Authority (LCRA) for Arcade Building, one of the biggest vacant structures in downtown St. Louis that has not been occupied for decades.

A city selection committee unanimously voted to negotiate with Dominium on a redevelopment agreement for the Arcade, which is owned by the LCRA. The project, which is expected to cost over $100 million, plans to transform the 500,000-square-foot, 18-story, Arcade and the adjoining Wright Building into 254 one- and two-bedroom apartments.

The St. Louis Post-Dispatch reports that the Gothic-Revival landmark constructed in 1918, located at 800 Olive Street, could become the third project for Dominium in St. Louis. The company recently completed the transformation of the Metropolitan Building, a former office building, into 70 artists’ apartments with street-level artist studios space. Last year it opened at 1604 Locust Street the Leather Trades an 86-unit artists’ loft building which the company said is now fully occupied. The Leather Trades, Metropolitan and Arcade developments were had all been projects of Pyramid Construction, which went out of business in 2008 after the nationwide housing crash.

Dominium’s plan calls for 69 market-rate apartments, which will be located on the building’s top four floors, and 185 affordable artists’ live-work units. The lower three floors of the Arcade, including the iconic two-level shopping arcade, will be renovated as commercial space. The project will also feature 143 parking spaces in the basement of the Arcade and will use an additional 250 spaces at the nearby Ninth Street Garage.

Dominium and city officials will now negotiate public incentives which could include tax-increment financing, property tax abatement, Brownfields tax credits for asbestos removal, Low Income Housing Tax Credits and tax-exempt bonds. The company also intends to seek federal New Markets Tax Credits.

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Photo Courtesy of: publichall via Wikimedia Commons.

Raven Purchases Foreclosed Northwest Plaza Mall, Plans $106M Redevelopment

By Gabriel Circiog, Associate Editor

The Northwest Plaza shopping mall in St. Ann is set to get a new lease on life as an entity formed by Raven Development closed on the purchase of the nearly vacant property, the St. Louis Post-Dispatch reports.

Bob Glarner, a principal of Raven Development, announced a $106-million redevelopment plan for the 1,829,000-square-foot asset.

The 122-acre foreclosed property was acquired for around $5 million by Raven Development affiliate NWP LLC. The property was sold by St. Ann Shopping Center LLC, which is owned by Wells Fargo Bank. The listing price was $10 million.

The Northwest Plaza, built by the Zorensky family, was at one time the largest shopping mall in the world but has been neglected in recent years after several changes in ownership. Raven Development, led by brothers Bob and David Glarner, has closed on a financing deal with Great Southern Bank to redevelop Northwest Plaza and has secured approval for $33 million in tax increment financing assistance from the County TIF Commission and St. Ann aldermen.   

Bob Glarner said the company plans to tear down most of the shopping center, renovate the 12-story office tower and construct big box stores, restaurants, offices and possibly a technical college. The redevelopment plan also calls for the complete renovation of the J.C. Penney building and the Macy’s and Burlington Coat Factory stores. Eau Claire-Wisconsin based Menard has been contracted to buy around 18 of the 122 acres.

The developer announced that NAI Desco will broker the retail portion of the property, while it is interviewing several brokerage offices for the leasing of the office tower. The company already has a letter of intent from a national retailer and is also discussing with a second anchor tenant, Glarner said. The first store is expected to open in the fall of 2013 or the spring of 2014.

According to a recent report released by Marcus & Millichap, approximately 950,000 square feet of retail space is currently under construction throughout the St. Louis metro area. Several projects which have been stalled during the recession are expected to come online in the coming years, and a further 3 million square feet are planned in the metro. By year end around 450,000 square feet will be delivered, increasing the stock by 0.5 percent.

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Photo Courtesy of: Caldorwards4 via Wikimedia Commons.

Chart courtesy of: Marcus & Millichap Real Estate Investment Services Inc.