Union Station struggles as retail trends, economy stifle venue

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Union Station struggles as retail trends, economy stifle venue
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Visitors to St. Louis Union Station can still get a caricature drawn of their likeness, buy various Arch-themed tchotchkes and get a free sample of fudge and a song to go along with it.

But two longtime fixtures in the historic landmark — Houlihan's and Key West Cafe — recently left the station. And the Bud Shop, which peddles an assortment of Budweiser-related mugs and memorabilia, is on its way out, too.

Tony Waters, manager of The Fudgery, said the venue was a little quieter at night now that Houlihan's has exited.

"It's been up and down," he said of the state of Union Station over the years. "But it's been on a spiral down for a while now."

The departures add to the uncertainty about the future of the venue — most notably the question of who will own it. The current owner, Union Station Holdings LLC, is seeking to sell the property. Bids are due Nov. 10.

"There's no question it has fallen on harder times," said St. Louis-based consultant Richard Ward with Zimmer Real Estate Services. "I think it's in for some serious change, but I don't know what the change might be."

It's a "magnificent building," he added, but repositioning it will take some initiative from new owners.

Doug Dean, general manager of the Marriott, said he hoped a new owner could bring more energy and vitality.

"We'd love to see a vibrant Union Station, as would the rest of St. Louis," he said. "But whatever else may be going on at Union Station, the hotel has been successful and continues to be so this year."

Within the last couple of years, all of the retail stores have been moved into the train shed so the Marriott could use the midway. But an estimated $20 million hotel renovation that was to be finished this year has been stalled for more than a year amid liens and lawsuits from contractors against the Union Station owner over nonpayment.

Now, the Union Station ownership group is looking into other financing options and hopes to move forward with some of the renovations before the end of the year, according to Dean.

Yet, the station also is on the auction block. Six brokers led by Lewis Miller are handling the sale. Miller, a senior vice president in Atlanta for commercial real estate broker CB Richard Ellis, declined to discuss the listing.

CBRE has not put a price on the property's listing, which touts the station as "a dynamic mixed-use property" with 184,879 square feet of retail space, 1,590 surface parking spots and home of the 539-room Marriott Hotel.

CBRE's listing brochure includes a potential development plan for the site. The rendering shows town homes under part of the train shed and a Whole Foods grocery behind the shed. But the rendering is dated Nov. 30, 2006.

OUTDATED MODEL

The difficulties at Union Station, which reopened in 1985 after a $140 million renovation, are similar to the fate that has befallen many of the "festival marketplaces" that the Rouse Co. spearheaded around the country in the 1980s, Ward said. The concept was innovative at the time — build unique retail environments made up of small, local specialty shops in inner cities and help reinvigorate those urban areas.

Some of those festival marketplaces — such as Faneuil Hall in Boston and Harborplace in Baltimore — are still going strong, Ward said.

"The others have mostly slipped, frankly," he said. "Some of them have died already."

Not only did Union Station open about the same time as the now-failed St. Louis Centre, but the St. Louis Galleria opened shortly afterward, too, drawing away many of its customers, he said. Still, it flourished for a while.

"But like a lot of fads and a lot of fashion concepts, they get worn out our and supplanted by new concepts," Ward said. "There was a rash of power centers and lifestyle malls."

Amy Fasholt-Fisher, the regional director for Houlihan's, said in a statement that the company regretted closing its doors in Union Station after more than 25 years.

"The decision was based on a number of factors out of our control, including terms of our lease, changing traffic patterns, etc.," she said.

Frances Percich, Union Station's marketing manager, said the venue was still moving forward.

While it was sad to see Houlihan's and Key West Cafe leave, she noted that three new stores had opened this year — a candy shop, a St. Louis memorabilia store and a store that sells personalized gifts.

Other vendors in Union Station say they haven't noticed much of an impact in sales since the restaurants left. After all, Hard Rock Cafe, Landry's Seafood and other tenants are still there.

"The tours are still booked," Percich said. "The hotel is still booked. The vision for St. Louis Union Station remains the same: It is a national historic landmark and one of the top attractions in the St. Louis region."

Union Station is not, she said, a mall.

"It's a four-letter word around here," she said. "If it was a shopping center, you have anchors. That is your draw. Our draw is the national landmark status, the hotel and the venues in downtown St. Louis."

Retail occupancy in the high season, which runs from March to September, is 79 to 81 percent, she said.

Mark Luedde, co-owner of Fat Sassy's, a store that sells everything from Disney figurines to flamingo socks, said he was surprised that Houlihan's closed.

"Houlihan's was the one that stayed while others came and went," he said.

Yet, Luedde said, he's reasonably happy in the mall and still gets enough business from tourists, conventioneers and downtown office workers to make a go of his business.

"Not much has changed, really," he said. "But I'd like it to be busier."

Still, Rhovelle Austin, who has run Imani's clothing store in Union Station for about a decade, decided to open a candy store — Sugar Hill — earlier this year.

"Some people are sad because they remember what (Union Station) used to be like," said her husband, Anthony. "But those of who are still left here are happy."

The opening of the Peabody Opera House down the street could be a shot in the arm, too, he said.

"We still see the potential," he said. "I think it's still a work in progress."

Tim Bryant of the Post-Dispatch contributed to this report.

Copyright 2012 stltoday.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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