Will Third Alderman Finish Ville Phillips Estates?
In February I called attention to a segment of channel 2’s “You Paid for it” to talk about the political process in the city’s 4th ward (see post). Alderman OL Shelton was not interested in finishing a development started by his predessesor that he replaced in a special election after she was recalled. Last month, during the regular primary, residents of the ward gave Shelton his walking papers by electing Sam Moore to the seat. Moore will be sworn in later this month. He will have his job cut out for him, especially at Ville Phillips Estates.
A sign promoting the development is now part of the debris scattered across some of the lots.
At the corner of Whittier and Garfield, at the SE corner of the development, water is not making it to the inlet just to the left. New homes were to face Whitter but neither the homes nor the sidewalks have been constructed.
Here is the same corner as much of the debris, Whittier & North Market. The curbing hasn’t been finished nor has the sidewalk.
Something as simply as filling in dirt between the curb and sidewalk has not been completed. Worse yet is the hole you see above.
Yes, a completely open man hole just waiting for someone to fall in or out of curiosity enter the underground system. Either way this is a safety hazard that should not be left open by the developers.
Not dangerous like the open drainage hole but just as interesting is the new alley that didn’t quite make it to North Market St. The odd part is how low it is relative to the sidewalk and street.
From this angle you can see how the area was excavated to get the alley this low.
Another view, looking south from North Market toward Garfield. The alley connects to Garfield on the opposite side, just not here at North Market.
At the West end of the block the alley again stops short, although this time it is a reasonable height relative to the grade. The fenced in area is behind the one old house on the block that has not been razed, this area was used to store construction materials & equipment but was left in a mess.
Basically the alley T’s at both ends. Here we see the old power lines running through the alley. Owners understood these would be removed and replaced underground but that never happened. The alley used to continue all the way to Whittier (behind me in this image) and the power lines still run through what would be someone’s building lot. I’m assuming the developers ran out of money to finish relocating all the utilities.
When you don’t relocate the power poles you end up with smart solutions such as this — a pole in the middle of your long driveway. I personally don’t get the whole driveway & attached garage thing anyway. Give me a good detached garage so that I can have a decent sized backyard.
Other areas around the block include missing sidewalks, the section along Whittier mentioned earlier and a section along Garfield near Annie Malone and then adjacent to the one existing house on the block. If we as a city are going to commit public funds to start a project such as this we need to make sure it gets finished, regardless of a change of aldermen. We also need to make sure improvements such as public sidewalks get done before the developer gets paid.
Is this some kind of joke? Of course every day is a joke when your gullible enough to believe that your taxes are being put to work judiciously and in the publics’ best interest.
I can’t believe that Mary “One” Johnson doesn’t have thousands of people in line waiting to buy these. She is salewoman of the century judging by the ads at the bus stop. Go, Mary!
Most any other city would be holding the developer’s “feet to the fire” to get these “loose ends” finished up. Failing that, they’d be utilizing the developer’s bonding company to pay for this.
As for the pole in the driveway, it’s not all that unusual, it’s a coordination issue. The plan is (was?) to get the existing pole moved and then to have a nice clean square to patch in. If the plan had been to leave the pole there, the driveway would’ve been poured tight to it. My guess is that no developer = no money to pay Ameren = the pole stays.
As always the bottom line is the bottom line. No contractor is going to continue to work if they’re not being paid. My guess is that the developer either went bankrupt or ran out of funding. It gets back to wise use of tax dollars. Wanting development to happen is a lot different than actually figuring out how to do it profitably.
The Ville is having Operation Brightside come though on April 28th. Volunteers are needed to pick up trash, cut grass, etc. Please contact Alice Davis of the Ville Area Housing Neighborhood Association at 314-535-4200.
I’m guessing that neither Mary “One” Johnson, nor her company, is bankrupt. It would be logical for the city to withhold approval of any new work she may be doing in the city until these issues are resolved. Whether it happens politically, or not, is a whole ‘nuther question, but the city does have leverage to get these problems fixed!
Logical or not, how much chance is there that anyone will make it happen? Political reality: we’re still waiting for the Kiel Auditorium to be renovated, and it’s right on Market in the public eye.
We know several families who live in these new infill subdivisions, so I just hope that none of the neighborhood kids gets hurt on the construction debris–or God forbid, fall in the manhole …
Mary “One” Johnson has money. She’s now a “teammate” of Jimmy Kennedy to build $100 million in homes. If you think she’s just his broker-agent, I’ve got a bridge in Alton to sell you..
http://www.bizjournals.com/stlouis/stories/2007/03/05/story1.html?from_rss=1
Maybe Mary One and Jimmy K ought to start their partnership by building in the Ville?
A question to ask is whether a change of Aldermen meant that gap financing was no longer available. Normally on many of these projects that gap is necessary to make up the difference between market rate sales and the actual cost to build. If the gap financing was pulled it is more than likely why the project was stopped in midstream. Again it points to a failed political system that allows the personal prejudices and political agenda of the Aldermen to come before the needs of the citizens of St. Louis. In any case there would not be much Mary One could do unless she wanted to start taking significant monetary losses on each home she built. Nor would it help for the city to withhold approval for new work, if in fact the bankrupt political system is at fault and not the developer.
does anyone expect anything different in North st louis?
I think Sam will bring a breath of fresh air to the Ville. He does not appear to be someone on the take, out for a quick buck. I hope he can last so real development can take place.
GMichaud – thanks for bringing up the term “gap financing”. What’s happening here is a classic case of trying to use tax dollars to create a market where none exists. While the intent is noble (bring back a struggling neighborhood), the reality is that a few families are getting a great deal (below-cost homes) that are being subsidized by many taxpayers across the city.
I don’t object to the city investing in viable redevelopment projects. I do object to investing in projects that aren’t viable/ won’t be self-supporting in the long run, and I have a major problem with the city not living up to its contractual obligations. I’d be very surprised if there were not a signed agreement before work started here. The fundamental question is why did the work stop? Were there performance issues on the part of the developer? Did the project get too squeezed by rising material costs/bad budgeting? Or was it simple political spite?
The relationship between the Board of Aldermen and developers is one that involves wary “trust”, “other-people’s” money and politics. The desired outcome, on both sides, is “success”. The challenge, especially when “new players” can and do come on board, is the ability to mess with a work in progress. Developers define success with dollars (profit). A failed project rarely dooms a succesful operator. A pattern of failure will, but an occassional “challenge” won’t. That leaves the city half of the equation. Until we raise the expectations on our elected “leaders”, where failure to complete projects already under way is viewed as a huge negative, we’ll continue to struggle with “stupid moves” like this one.
Hopefully Sam Moore can see the wisdom of getting this project completed befoe embarking on any new ones. In the long run, a pattern of success will do more to lift the whole neighborhood than will a series of half-completed “failures” . . .
There is a huge amount of misunderstanding when it comes to “gap financing”. Essentially, there are two forms of gap financing used on city housing projects. One is for development cost writedowns, the other is for affordabilty writedowns.
In most cases, the city does not fund gap for affordability purposes. What this means is that homes are indeed sold for “market prices”. The gap piece is used to bring the real world development cost in line with the market values in a given neighborhood.
It costs about the same to build a home in Dogtown as the Ville. However, in Dogtown, developers are getting over $300,000 sales prices on some houses. Meanwhile, in the Ville, homes sell in the low $100,000 range.
With development costs typically about $125-150 per square foot on new cosntruction (or about $200,000 on a 1500 square foot home), you can see how in Dogtown, developers can make profits while in the Ville, developers need writedowns. As far as the homebuyer is concerned, they are paying the “market price” in both neighborhoods.
On the other hand, back in the Ville, if the city participated in a project to sell $125,000 appraise-valued homes to low income buyers for $80,000, then, in addition to a development cost writedown, there would need to be a further affordability writedown to get to the $80,000 “affordable” price. This would mean a $75,000 development cost gap plus a $45,000 affordability writedown, for a total subsidy package of $120,000. The city just doesn’t do this sort of thing, and truth be told, it’s getting even harder to get development-only writedowns in excess of $50,000 per unit…
So, back to Zavist’s point, should we be doing these sorts of assisted projects at all, or just building in neighborhoods where the free market operates without government help, allowing places like the Ville continue to languish?
Thanks for the clarification. And to clarify my position – I don’t object to most development cost writedowns – it’s a one-time investment that’s intended to “kick-start” development, they are ususally self-sustaining and they’re usually worth the public “investment”, sooner or later. I do continue to object to affordability writedowns, especially in St. Louis, which has plenty of affordable housing available. When the government tries to “mess” with the market of supply and demand, the typical result is only a select few see any real financial gain. Whether it’s requiring the provision of a certain percentage of “affordable” units in “hot” areas or paying the difference in construction cost and sales price in “challenged” areas, the bottom line is it’s a financial subsidy that benefits only a very few citizens. Most of us would like to have a nicer place to live in, especially if we’re not the ones having to pay the difference in cost . . .
I thought Elliot Davis reported over $2 Million in City-assistance for this project. At 15 homes, that’s over $130,000 subsidy per home (which I believe came from CDA). And that doesn’t count the lost tax revenue due to the tax abatement for the homes. So it’s not a case of “the City just doesn’t do this sort of thing.” It needs to be a case of spending this money wisely and “holding developers’ feet to the fire.”
Elliot’s $2,000,000 number describing the city’s investment in the Ville project is probably going towards a variety of things, including rebuilding targeted infrastructure, demolishing derelict structures, buying land, etc. These added costs are very likely not counted as part of the project’s development budget. Often, just getting to a clean building site can cost tens to hundreds of thousands of dollars. Speculating on dollar allocations without firm project information is not very useful. Rather, discussing appropriate development strategies is more productive. Should the city invest in infrastruture improvements to attract new families to targeted neighborhoods? Should the city assemble land for redevelopment? Should the city demolish derelict buildings to create sites for new construction? It is sexy to toss around high dollar amounts in loose conversation, but is not very helpful toward setting policy or building understanding….Oh, and one more thing…that $2,000,000 targeted to the Ville is $2,000,000 not spent on any number of competing priorities. So, what should our priorities be? How about $2,000,000 in city money to create a snazzy nightclub district along Cherokee? Any takers?
“Only” about $600,000 was spent on acquisition and site prep. The rest was for construction gap and/or buyer affordability. The question on the table now is whether the City should fund additional money to guarantee Mary “One” gets a sizeable profit.
“Chee chee’s” post is helping to build understanding. If $600,000 of the $2,000,000 were used for “predevelopment costs” (site prep, land acquisitions), then $1,400,000 was used for housing development writedowns (sans any detail on affordability assistance would be useful…maybe Chee Chee has that info, too?)
Anyhow… $1,400,000 spread across 15 homes works out to $93,333 development subsidy per unit. As we discussed earlier, market values in the Ville are in the low $100,000 range. Adding the $93,333 in gap to the buyer’s, say, $110,000 purchase price yields $203,000 in sources of funds per unit, a number right in line with our approximate cost of $200,000 to build a new home in the city.
Since the overall project was originally touted to be a much larger sized plan (up to 100 units?), it’s easy to see how a change in aldermen and ward priorities can wreak havoc on sustaining a local revitalization strategy.
This unfinished phase has 10 homes sold of a planned 15. The goals for each subsequent phase should be revisted upon completion of the previous phase’s goals…up to 100 homes. For Garfield, the listing price is $125,900. For Annie Malone, it’s $136,900. (I’m stating conditions, not looking for buyers…but that should shed some light on how much affordability is needed or sought after). The homes are roughly 1600 square feet (on average)…and the $125/sf or $200,000 per home is about right in total development cost. Sorry, though. I don’t have a detailed breakdown on how much affordability is offered (or per unit). But the estimate of $3 million development cost ($200,000 TDC per home) included the cost of site preparations ($600,000). $2 million of the total development cost was a City subsidy. It’s still a total subsidy package of $130,000 per home.
Gee, I would’ve liked a $130,000 city subsidy when I bought my home . . .
Jim-
YOU, as homebuyer don’t “get” the subsidy; the developer does. Without it, there is no project. The question is, should we even be doing it?
Team Four conspiracy theorists would say, “no”. Drain resources from the area until it completely empties out, then redevelop it–in fifty years.
Others would say, targeted development assistance was key in bringing back areas like Soulard, Benton Park, Old North St. Louis, and other neighborhoods.
Hey, forget about the $130,000 in subsidy; you’re not getting tax abatement either. But you live in the wonderful world of Southwest City, right?
You shouldn’t need a subsidy to buy homes in one of the city’s strongest areas, should you?
Remember, you’re not in Denver anymore!
Interesting thinking, big money. The developer here is getting money to do the project and to earn a normal return on investment. You’re right, no money = no project. But, in effect, someone IS putting $130,000 in their pocket. The buyers here are paying, what, $130,000 for a structure that costs $200,000 – $220,000 to construct, and what would probably cost $300,000+ to buy out in Winghaven. They may not be receiving a direct (cash) subsidy, but they’re sure as heck are receiving an indirect one – getting a quality home at half off it’s replacement value! That’s the classic definition of welfare – something for nothing. And, gee, it’s directly benefitted a whole ten families, one developer and several dozen construction workers. It’s that classic marketing cliche – we’re going to lose a little on every unit, but we’re going to make it up on volume!
As for where I live, yes I live in SW City. So? I live there because that’s what I could afford to buy. It’s the best bang for my limited resources. I couldn’t afford CWE or Clayton, but then again, I didn’t expect to be subsidized, either! (And, no, I didn’t expect or receive any subsidies in Denver, either, although I did benefit from some striong appreciation, as did everyone else living out there.) Just because you either have limited resources or are willing to live in “less-desirable” parts of town does NOT entitle you to a direct government subsidy! Working hard and earning what you have is the “American way”!
Like I said earlier, I don’t have a lot of objections to government helping fund infrastructure. I also don’t have a lot of problem with helping, or even leading, on the land prep and acquisition side. I do have a major problem with small-scale, highly-subsidized developments, based on questionable assumptions, like this one appears to be. There are only two potential, long-term outcomes. One, the area “turns around” and these “special” buyers will reap a huge windfall when they sell. (Will they be returning any of that appereciated money back to the city? I doubt it.) Two, the area doesn’t turn around, and these homes will look like everything else around them in twenty years, and we can pat ourselves on the back and say “At least we tried”.
Mary “One” Johnson is doing a lot of good in the city. It’s starting to gain momentum and show in areas like Gaslight Square and over near SLU. Would it be great if it were happening here, as well? Sure! But small-scale developments, like this one, won’t do much to “turn the tide”, by themselves, and especially when they’re abandoned when they’re only halfway done. It’s all about the wise use of limited resources. And, as you questioned earlier, “How about $2,000,000 in city money to create a snazzy nightclub district along Cherokee?” In my mind, that WOULD be a better investment. Half of housing affordability is income – creating a better job base in the city would do more to help housing than anything else. Yes, it may take 50 years for this area to turn around, but the alternative is bankrupting the city. There’s only so much tax abating and price buying down we can all afford before the well runs dry. Sometimes, patience is the only answer . . .
Jim,
If you think the Ville buyers are getting such a great, “something for nothing”, deal, moving into the Ville neighborhood, woud you do it?
Many would think they are taking a big risk moving to such a transitional area. There’s no guarantee that the area will rebound to higher real estate prices.
But if it does, don’t you think they ought to be rewarded by keeping the appreciation instead of paying it back to the city? After all, they are the ultimate risk takers.
And as far as “bankrupting the city”, the dollars going into assisting this project are all federal funds.
Lastly Jim, and you are sounding pretty unhappy about the use of these dollars in this fashion, what are you planning to do about it? You are a city resident. You have a voice. The investment of these funds does follow a public process, including hearings where public testimony is received.
Complaining on blogs won’t change public policy. It takes personal investment of time to make a difference. Got a better solution? Let’s hear it.
A better solution? How about “spreading the wealth”? Instead of helping 10 families, help a hundred. We don’t have a problem with either the quantity of housing or affordable housing. We have a problem with poverty and with an ability to maintain what we already have.
Want to improve the neighborhood? Think renovation, not demolition. If you want to give out subsidies, give people $5,000 toward the downpayment and $15,000 toward repairs on a $50,000 or $80,000 property (there are plenty around). Give existing low-income owners $2,000 annual grants to help maintain what they already have. Enforce exsiting building and health codes against landlords. Or give away derelict properties for $1 and start a revolving loan fund to support renovations. Invest some sweat equity. Soon, you’ll have a neighborhood of $120,000 – $150,000 homes. You’ll also be helping a whole lot more families. Do the math. 10 x $130,000 = $1.3 million. 65 x $20,000 = $1.3 million. 650 x $2,000 = $1.3 million. More bang for the buck.
Want to improve the city? Change attitudes. Create jobs. Improve the schools. Reduce crime. Get rid of the city income tax. Make it easy for home builders, both big and small, to build in the city. Sell building sites for $1. Quit trying to subsidize and incentivize every project. Trust the market.
Would I buy in the Ville? Probably not. (And I obviously didn’t a couple of years ago.) Why not? Why did I buy SW? Because it’s still very affordable and I’m pretty sure that it’ll be a better investment in the long run. It’s my money and I want to minimize risk and maximize return. I want to live in a neighborhood where 99% of the owners take good care of their properties. I want to be near parks, highways and neighborhood shopping. And I have enough equity to afford to make that choice. Is it “fair”? Life isn’t “fair”!
The difference between the two neighborhoods isn’t the age of the properties or highway access. But there are huge differences in both the level of maintenance and in local retail. These are things that politicians don’t have a lot of control over, they’re things that the residents themselves need to embrace. And it’s probably as basic as “fight or flight”.
To get back the focus of this post, the fundamental questions are where should we, as a city, invest our limited resources and how should success be measured? Subsidizing reinvestment in our residential areas makes sense. Overbuilding for what the market will support, especially on small, infill projecst, is optimism at its finest. Using tax dollars (and yes, federal tax dollars are still “our” money) and not finishing a project borders on criminal. Would this be as big a discussion if the aldermen and developer had followed through on their promises? No.
Most of us question public investments that don’t benefit us directly. It’s human nature. But projects that go smoothly and deliver what they promise catch a whole lot less flak than ones like this one. And politics IS all about reallocating wealth. Do it well, you’re a hero. Do it poorly, like here, and you, rightly, get a microphone shoved in your face . . .
“politics IS all about reallocating wealth”? That says it all! Nowhere in our laws or constitution will anyone find that objective but it has become the noted and unstated purpose of our government. Is there any wonder why the StL region, with so many governmental units, continues to lag behind its peers? All these words typed but the story is the same, especially when government (and its citizens) attempts to interfere and ultimately distort free markets: CHAOS & FAILURE! Yeah right, let’s continue to hand out more TIFs, tax credits, etc. and the public in the end will have less, not more. More malls, more highways, more pollution, more noise,… keep it up, it is St. Louis!
$2,000, $5,000, or $10,000 in “rehab grants” to a low income home owner living in a 3,500 square foot (or 1,000 square foot) house with severely deteriorted systems will do very little.
Jim, your world in beautiful Southwest City is one of the region’s best kept secrets. Solid neighorhoods, excellent parochial school options, great restaurants and parks; it’s no wonder you chose to live in the area.
Now it’s even better, served by a $500,000,000 Metrolink Extension! All paid for with public funds and continuing operating subsidies! Imagine that. Would you have preferred that project not have happened? Or would you make the case that it was the right project in the right area for the right reasons?
John, your comments knocking the use of TIF’s, tax credits have little to do with malls, highways, and pollution, that is you’re talking about their use within the city limits.
I’m neutral on the Metrolink extension. It played no role in my decision to move where I did, and I’ve only ridden it a handfull of times. Sure, it’s a nice amenity, but I’ve been using the bus more than the train recently. Is it an appropriate expenditure of public funds? Probably. It’s serving a lot of daily commuters from both South City and South County, much like how the original line serves a lot of commuters from North County and parts of the city north of Forest Park.
We’ll never agree completely that any one project is totally good or totally bad. This project is just a classic case study of politics done poorly. It’s also a symptom of the larger problem of aldermanic courtesy. Letting any one elected official decide, essentially unilaterally, whether to start, stop or continue any expenditure of public funds is not good government. Any substantial investment in the community (and yes, $2 million IS a substantial investment) deserves to be well managed. This one wasn’t . . .
I ran across urban planning efforts in San Francisco. The efforts are much different than the dysfunctional management of St. Louis. http://www.sfgov.org/site/planning_index.asp?id=25172.
From their planning documents, “We will be conducting ongoing discussions with the residents in each of the neighborhoods through a series of public workshops, walking tours of the neighborhood, bus tours of other neighborhoods, focused meetings and discussion groups held throughout the neighborhoods, and other public activities and events. We will work with the local community to ensure that the changes that are occurring are changes for the better. We’ll work to explore each neighborhood’s distinct character, special places, and unique qualities. We’ll also imagine how a neighborhood can become even better than it is. We’ll work to understand the challenges a neighborhood faces, to explore its strengths, to consider its weaknesses, to imagine a future where it is the best possible neighborhood it can be for those who live here, and then plan that future. Change can become opportunity with careful planning.â€
And then further along in the document, “We gathered comments from thousands of San Franciscans about the things they love most about their neighborhoods. After compiling the feedback, we identified eight key elements of a great urban neighborhood.â€
The lack of leadership and management ability leaves St. Louis with a brand new bombed out neighborhood like Ville Phillips Estates. It is a true disgrace and a national embarrassment, although it doesn’t seem to bother the inept leadership in St. Louis. True community involvement instead of back room dealing, would be a good place to start. They should use the San Francisco model if they can’t come up with their own.
The truth is St. Louis is run like an old communist city, with the party officials and their cronies receiving all the benefits, lining their pockets, while the people suffer. In fact I happened to visit Tallinn, Estonia right after the Soviet Union collapsed. You know what, it was run down and dilapidated (other than the medieval core) and it reminded me so much of St. Louis.
The parallel between Communism in Russia and the leadership in St. Louis (and Missouri) is no joke. It is real, the results are visible everywhere you turn.
This is great. I love all of the points and counterpoints that individuals are offering. I can tell you that Mary One Johnson has a good heart and truly believes in this city. This is something that her track record proves. Anyone who knows her can attest to this. She is doing all she can to help rebuild the Ville community. At a loss to her at times…