State board gives first OK to $5M loan for One City Center
Members of a key state agency this morning gave their initial OK to a $5 million loan to help kickstart renovations of the under-used One City Center office tower in downtown St. Louis.
The Missouri Development Finance Board agreed to enter talks with the City of St. Louis on a $5 million loan that the city would use to help renovate One City Center, a key chunk of funding for the $29 million project, which is in turn a major piece of turning around the entire, mostly-abandoned St. Louis Center complex at Washington Ave. and 6th Street.
The One City Center project is designed to draw more tenants into the building - which today is 85 percent vacant - said Barbara Geisman, St. Louis’ deputy mayor for development. Tops on the list is the law firm Lewis Rice Fingersh, which occupies 110,000 square feet a few blocks away at 500 N. Broadway. They have agreed to move to One City Center if the building is improved, she said.
But that poses a problem for the owners of 500 N. Broadway. And they let the MDFB know about it Tuesday morning.
Val Sklarov, a Chicago-based real estate investor whose wife bought 500 N. Broadway for $11.8 million in 2003, said losing Lewis Rice would likely force him into foreclosure, and that the state and city shouldn’t be in the business of helping high-priced law firms move from one downtown office building to another. He also pointed to a vote earlier this month by the St. Louis Development Corp. to give Lewis Rice a $300,000 forgivable loan to help pay moving-related expenses.
“I don’t think it’s the city’s job to cannibalize one building to help another,” he said. “Will we be back here a year from now asking for incentives, too?”
Sklarov said his bank had offered a $6 million loan to rehab the building, but that Lewis, Rice had shown little interest in staying. He has also put the building up for sale.
As the meeting began at 8:30 at the Renaissance Hotel, about 75 protestors lined both sides of Washington Ave. outside the building, holding signs and chanting. One sign read: “Why is my money being spent for them to move?” An organizer said the protest was set up by a nonprofit called “Citizens Against Waste,” and a press release issued by the group gave its address as 500 N. Broadway. A flyer being handed out near the rally said the first 100 protestors would receive up to $30 each.
But inside the meeting, there was little debate, and the vote for “conceptual approval” was unanimous.
“This is not about Lewis Rice,” said MDFB member Brian May. “This seems to be a larger issue about redevelopment in downtown St. Louis.”
It’s not a done deal. The vote Tuesday was to move ahead with talks. Now the city and state officials will hammer out terms of the 10-year loan. That money will then be put towards the $29 million project, which includes $15 million from the building’s owner - SCR Investments - and various other city funds and tax credits.
Geisman said Lewis Rice hopes to move into the building next year and that LarsonAllen, an accounting firm with about 115 employees in Clayton and Town and Country, has signed a letter of intent for 23,000 square feet. It had planned to move into the Park Pacific building downtown, but switched to One City Centre after financing stalled on that project, said Scott Engelbrecht, head of LarsonAllen’s local office.
Those two tenants would bring the building up to 49 percent occupancy. The hope, Geisman said, is to eventually bring the building to 90 percent - which would cost about another $10 million in renovations.
The building - which is one of the newest office towers in downtown St. Louis - would also be re-oriented to have an entrance on Washington Ave., instead of the current one on 6th Street, and would be re-named 600 Washington, Geisman said.
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Where are the historic tax credits and new markets for the restoration
of Kiel Opera House. Kiel is the critical-mass builder. The ‘growth’ project.
And the STIMULUS..to clean up and light the dark and dangerous Memorial and Aloe Plazas, the Memorial, City Hall, and the Kiel parking garage?
This area has needed turning around for 30 years. It is the area of
critical need and of the most potential for success….because Kiel
recovers a good chunk of our lost convention and group travel business.
that’s what downtown performing arts centers do.
The question of why are tax payers helping them to move and paying to rehab an office building is a very simple one. City versus the County. This law firm used Clayton against the City to get what they wanted at tax payers expense.
Centenne did it and look what that cost tax payers.
Merge the city and the county and this money grab at both the city and the county tax payers expense ends. The money that would be saved in the merger would run into the ten of millions.
Ed, you’re a nut.
Thanks for posting the link to the press release - I needed the laugh.
What about the $14 million TIF the city is on the hook for already? Who is paying for that?
^
SCR Investments.
KNOX is reporting that the ‘protesters’ were homeless people paid 30.00 and didn’t even know what it was that they were protesting.
The Business Journal mentioned the accounting firm would be LarsonAllen. Were they the ones who had signed on to Park pacific? If so, is that project OFFICIALLY dead???
Ms Deputy Mayor: How are you able to find this money? There never seems to be any additional funds for the Affordable Housing Commission Trust Fund, even though the established tax for this fund has collected increasing amounts of money each year of it’s existence. Why does the city value housing corporations over citizens? Just thought I’d ask, not that I expected an answer. Thanks anyway. What’s a few homeless families if you can get an office building 49% occupied?