McKee’s Northside Regeneration Moving Forward

As you’ve likely heard by now, last week the Missouri Supreme Court overturned a 2010 ruling that Paul McKee’s Northside Regeneration development plans were too vague for TIF financing:

After over 3 years of litigation, developer Paul McKee’s controversial Northside Regeneration Project is being allowed to proceed.  On Tuesday the Missouri Supreme Court reversed a lower court decision blocking McKee’s use of so-called “Tax Increment Financing,” (TIF) for the development. (St. Louis Public Radio)

I’ve never been thrilled about how McKee handled property acquisition and maintenance, but I recognize the city’s total absence of planning and working toward a common vision left an opening for private interests without public input.

The project area is large but it’s a fraction of the city as a whole. There are many other parts of the city, north & south, dealing with continued population decline, increases in vacant buildings, and other signs of decay. Where’s the people upset the city isn’t doing anything to solicit public input in the rest of the city? Transportation, housing, jobs, education, etc are all being ignored.

The Jaco report just had Paul & Midge McKee on taking about their project, see the video here.

One of the biggest issues is the massive TIF (tax increment financing) package for the project. What needs to be understood is the pros and cons of the TIF tool. When a municipality invests in new infrastructure in stable and up & coming areas few tend to object since people see the value of improving desirable locations. Conversely, this means declining areas don’t see improvements in public infrastructure (sidewalks, roads, sewers, lighting, etc).  Both are self-fulfilling in that rebuilding public infrastructure in the sable/improving areas further helps these areas while the lack of infrastructure investment in others accelerates decline in others.

Begin replacing sidewalks & lighting in sparsely populated declining neighborhoods and people will quickly question the return on that investment.  This is where the TIF tool come in, a private developer agrees to invest in a blighted area and pay much more in property taxes than the municipality currently collects but only in part of that tazx is used to pay off bonds used to rebuild the public infrastructure the municipality can’t afford to rebuild otherwise.

The developer needs the new infrastructure to attract investors/buyers/tenants but the municipality can’t rebuild the infrastructure without a way to pay for it. The municipality can’t risk existing revenues to pay off bonds to rebuild the infrastructure so that means new revenue must be used.  Sales taxes are a bad source for these revenues

• Residential & office development don’t pay sales taxes
• Sales taxes would take too long to accrue
• Our sales tax rate is already sky high

This leaves property taxes as a source of revenue. To simplify things say the property is paying $100/year in property taxes but after redevelopment the property taxes will now be $200/year. With the TIF the municipality/school district would still collect the $100 it always did, $5o (increment) would go to pay off infrastructure bonds and the remaining $50 would go to the municipality/school district. Do nothing get $100/year or do the project and get $150/year.

The actual numbers will be different but you get the point: public infrastructure gets rebuilt, building happens, more taxes are collected than if nothing happened. This is a simplified view and there are cons such as favoritism for the developer(s), risk of pushing out good people, etc.

My concern is St. Louis won’t require good urbanism such as strong pedestrian connections. The infrastructure needs to be rebuilt and TIF is the best way to do that, but we need to have a say on characteristics of the final development.

— Steve Patterson

Five Years Since Pyramid Properties Ceased Operations

Five years ago today major St. Louis developer Pyramid Properties, led by John Steffens, collapsed, leaving a long trail of unfinished properties.  From May 2010:

City leaders and Pyramid’s former partners say the transfer of properties is remarkable given the size and scope of the properties involved and the timing of the deals in the midst of the Great Recession.

“It has worked out far better than I expected,” said Jeff Rainford, Mayor Francis Slay’s chief of staff. “The fact that people were willing to not race to the courthouse steps is the only reason this didn’t end up a total disaster.”

Instead of filing lawsuits or filing for foreclosure, many of Steffen’s lenders, investors and former partners suspended disbelief and instead participated in a workout process that began days after Pyramid closed its doors. (St. Louis Business Journal)

With the properties untangled many have since been completed by others, including, but not limited to:

The above properties show that even in a down economy projects can happen. Still, the future of a few other former Pyramid projects remains unclear or just getting started:

Considering how much property Pyramid had tied up in complicated financial transactions it’s remarkable what has been accomplished in the last five years. Hopefully the  remaining projects will be completed in the new few years.

— Steve Patterson

Readers Favorite St. Louis Brewery: Schlafly

The three breweries came out ahead of Anheuser-Busch InBev together received nearly 80% of the votes in the poll last week:

Here’s the detailed results of the non-scientific poll:

Q: What is your favorite St. Louis brewery?

1. Saint Louis Brewery (aka Schlafly) 51 [31.1%]
2. Urban Chestnut Brewing Company 47 [28.66%]
3. 4 Hands Brewing Company 32 [19.51%]
4. Anheuser-Busch 24 [14.63%]
5. Unsure/No Answer 5 [3.05%]
6. O’Fallon Brewery 3 [1.83%]
7. Exit 6 Brewery 2 [1.22%]

Remarkable given the short history of smaller brewers in the US.

The battle between craft breweries and big beer stretches back to the 1990s, when the idea of buying a beer brewed by a small, independent brewery first took off. In 1991, annual volume growth of microbrewing was 35 percent. Four years later, it had leapt to nearly 60, according to the Brewers Association. (US News — Hopslam: How Big Beer Is Trying to Stop a Craft Beer Revolution) 

Indeed, Tom Schlafly later recalled the start of Schlafly beer after the son of a former law partner convinced him a market existed:

It was Dan who finally convinced me that a microbrewery would be viable in St. Louis. For a number of reasons, we concluded that the best plan would be to start with a brewpub.

In 1990, the Missouri General Assembly passed a law that allowed microbreweries (defined as breweries that produced no more than 2,500 barrels per year) to hold retail liquor licenses for the brewery premises. They were not allowed to sell beer anywhere else. In 1991, we were issued the first microbrewery license in the state of Missouri and opened The Schlafly Tap Room on December 26 of that year.

Soon thereafter, owners of other bars and restaurants began asking us how they could offer Schlafly Beer and were amazed to be told that the Missouri General Assembly wouldn’t allow us to sell to them. Responding to these requests, in 1993, I successfully lobbied the General Assembly to amend the Missouri microbrewery law to allow us to brew up to 10,000 barrels per year and to sell our beer to licensed wholesalers. In August of that year, several bars and restaurants in St. Louis began serving Schlafly.

In 2003, we opened Schlafly Bottleworks where we now brew most of our beer including almost all of our packaged beer. In 2008, we brewed approximately 25,000 barrels of beer and owned two restaurants, The Schlafly Tap Room and Schlafly Bottleworks. In 2009, we brewed over 30,000 barrels. We reached this point without amending the law that restricted microbreweries to 10,000 barrels of annual production. How did we do this? Easy. We’re now licensed as a winery. That’s right. In the eyes of the law, Schlafly Brewery is a winery.

Like microbreweries, Missouri wineries are allowed to hold retail liquor licenses on their premises. Unlike microbreweries, however, wineries are not subject to an annual production limit. Because we make cider, we can qualify as a winery (cider being considered wine because it’s made from fruit juice). As bizarre as it might seem that a brewery could be licensed as a winery, it’s even more bizarre that Schlafly is now the largest American-owned brewery in St. Louis (Anheuser-Busch is now owned by a Brazilian-Belgian conglomerate) (CraftBeer.com)

Dan Kopman became Tom Schlafly’s partner in St. Louis Brewery. Recently they sold a majority stake (60%) in the company to a group of local investors, Kopman still runs the operation. Interesting they started with a Brewpub, the Tap Room.

Many comments on the original post focused on the fact I only included breweries as listed by stlhops.com so brewpubs like Civil Life and Perennial were not choices. I did this to avoid controversy….

I’ve learned there as many terms in the beer business: microbrewery, brewpub, craft brewery, etc…

That last one is defined as:

An American craft brewer is small, independent and traditional.

Small: Annual production of 6 million barrels of beer or less. Beer production is attributed to a brewer according to the rules of alternating proprietorships. Flavored malt beverages are not considered beer for purposes of this definition.

Independent: Less than 25% of the craft brewery is owned or controlled (or equivalent economic interest) by an alcoholic beverage industry member who is not themselves a craft brewer.

Traditional: A brewer who has either an all malt flagship (the beer which represents the greatest volume among that brewers brands) or has at least 50% of its volume in either all malt beers or in beers which use adjuncts to enhance rather than lighten flavor. (Brewers Association)

And craft beer sales continue to climb, taking away sales from the big guys:

Note how the Craft Brewers Association distinguishes between:

• Regional craft brewers
• Contract brewing companies
• Microbreweries
• Brewpubs

I still have a lot to learn.

A close second on the list was the 2-year old Urban Chestnut Brewery which just announced a second location that will be larger than the Schlafly Bottleworks:

Once the new brewery is open, Urban Chestnut initially will be able to boost its annual production by about 15,000 barrels of beer. The new facility will eventually have capacity for 100,000 barrels a year. (One barrel equals 31 gallons, or about 330 regular-size bottles.) (stltoday) 

Another brewer not on the list was William K. Busch Brewing Co.:

Brentwood-based William K. Busch Brewing Co., founded by Billy Busch, a son of former Anheuser-Busch leader August A. “Gussie” Busch, introduced Kräftig lager and Kräftig light in November 2011.

“We did the first year without TV, and we want to take the company to the next level,” Busch said.(stltoday)

Currently Busch’s new company is smaller than Schlafly, but it wants to brew a couple million barrels a year, still a small sum compared to the brewery founded by his ancestors.

— Steve Patterson

Boston’s Copley Square

Watching the news yesterday I thought the block where the first bomb exploded in Boston looked familiar. I’d only been there once, just over 24 hours, in January 2008, just 2 weeks before my stroke.

I searched online for specifics on the location of the Boston Marathon finish line (see graphics from the Boston Globe’s here and NY Times here) and I quickly realized why I recognized the location, I had stayed the night at the finish line!

My room in the Charlesmark Hotel (655 Boylston St) was in the front, facing Boylston St and the Boston Public Library.  That night I had dinner at the Globe Bar & Cafe at 565 Boylston, facing Copley Square.  The next morning I got up early to see as much Boston as I could before my late afternoon flight back to St. Louis.

The Copley Square area was upscale and I felt safe walking around, the scale was very nice. The events of yesterday are not an indictment of the area, it was just a target because of the event.  I hope to return again!

My heart goes out to the victims and the people of Boston.

— Steve Patterson

Saving Cupples 7: The Importance of Urban Context

The Cupples Station complex is historic:

Name: Cupples Station Complex

Address: 7th to llth, Clark Avenue to Poplar Street

Architectural Firm/Architect: Eames and Young

Alterations: Several of the original buildings were razed for construction of Busch Stadium and Highway 40.

Designation: City Landmark, National Register of Historic Places,

History:

After the completion of Eads Bridge and the tunnel which connected the bridge with the Union Depot railway yards, Samuel Cupples and Robert S. Brookings saw an opportunity to locate warehouses with ready rail access to the yards. Their new warehousing idea saved considerable time in freight handling and was enthusiastically adopted by the local shipping interests. The resulting large group of multi-story buildings transformed a previously useless part of the city into a highly productive area. Since all of the warehouses were not accessible by rail, they were connected by a system of tunnels and bridges. A system of hydraulic elevators was provided for vertical access. The buildings were massively constructed and made as fire resistant as was possible.

Cupples Station played a major role in maintaining the preeminence of St. Louis as a railroad center in the first half of the twentieth century.

Architecturally, the Cupples Station buildings are of national importance. Although treated in the Richardsonian Romanesque style, the buildings are strikingly modern in feeling. Rounded brick cornices and soaring arches are common features of all of the buildings and serve to unify them. Each building, however, is different from the others in detail. Originally, there were 20 buildings in the complex. (source)

More important than being historic, the remaining buildings have a nice urban feel to them.

From my post Thoughts on Cupples #7 from December 2011:

In 2000 when Bank of America owned several of the Cupples buildings a tank collapsed causing a hole in the roof of #7. The hole was known five years later when McGowan & Walsh bought three of the warehouses, including #7. They attempted to tarp over the roof, right?

Wrong, they did nothing! Water poured in a small hole in the roof for five years prior to their ownership causing structural damage to get to the point where it is today — which is mostly in the basement. They’ve been irresponsible owners for years and now they are maneuvering to blame the city if this historic structure collapses.

The city certainly has failed, I’ve had to resolve issues like peeling paint or end up in court! Where has the city been? They condemned the structure in 2008 and that then did…nothing. Everyone has been covering their own ass, but nobody has been trying to stabilize the building.

If this building collapses or is razed it will be a huge loss to the area. Walking east on Spruce St it helps from the street when you cross 11th Street (map)

— Steve Patterson