Roberts brothers fighting for their empire, good name

2012-04-22T00:15:00Z 2013-01-21T12:25:51Z Roberts brothers fighting for their empire, good nameBy TIM LOGAN • > 314-340-8291 AND LISA BROWN • > 314-340-8127


ST. LOUIS - The shiny new tower rises high above Old Post Office Plaza. Twenty-five stories of glass and steel, designed for luxury living in a new downtown. But more than a year after construction, all 55 units sit empty. Shades drawn. Doors locked.

On the skyline, in bold letters, stands the name of the men who built it: Roberts Tower. 

The Roberts Mayfair Hotel sits next door, its marble-floored lobby still open, but weirdly quiet. Next to that, the grand Roberts Orpheum Theatre, with a few bills tucked under its closed doors, offers nothing on the marquee.

For nearly four decades, Michael and Steven Roberts have been big names in this city. They rose from the Penrose neighborhood of north St. Louis to become two of the nation’s wealthiest African-American businessmen, with a net worth typically described in nine digits. They have hobnobbed with Bill Clinton, counseled Cabinet members, and casually mention that they know Magic Johnson well.

Lately though, the Roberts’ good name gets more often read in civil court more than touted at ribbon-cuttings. Contractors complain of unpaid bills. Hotel workers say paychecks come late. Roberts properties owe hundreds of thousands of dollars in delinquent taxes in Missouri alone, and chunks of their nine-state portfolio of TV stations, hotels and real estate sit in bankruptcy court. Earlier this month, Bank of America sued six of their hotels for $34 million, and if the hotels can’t pay, says the bank, the brothers will.

The brothers call all of this a simple setback. Something they will get through. “Failure is not in their vocabulary” is a line from a 2006 magazine profile, and the concept didn’t surface during a lengthy interview last week with the Post-Dispatch.

“We’ve always…” said Mike.

“… worked things out,” said Steve.

But at this point, the Roberts brothers have an awful lot to work out, with a lot of money — and their good name — hanging in the balance.


The Roberts brothers treasure their legacy. They proudly tell stories of their working-class roots, the sons of a postal worker and a teacher. “We weren’t rich. We weren’t poor, we just never had any money,” is how Michael put it in a 2009 interview with CNN. Then came college, law school, and politics.

In 1977, 28-year-old Mike became the youngest person ever elected to the St. Louis Board of Aldermen. That record lasted two years, until Steve, 26, won a seat. Mike ran three times for citywide office, including a 1987 bid for aldermanic president that he lost by 171 votes.

“The plan always was to do big things,” said Veronica O’Brien, a longtime friend and former St. Louis School Board president.

They used their connections, working as political and minority-contracting consultants while serving as alderman. That might raise eyebrows today, but it was common then, said Mike Jones, a veteran of city and county politics and longtime friend of the brothers.

“They always had a blended agenda of business and politics,” Jones said. “They were savvy.”

That savvy paid off as they moved into the heavily regulated world of broadcasting, winning a license from the Federal Communications Commission to launch Channel 46 in St. Louis in 1986.

A decade later, well-versed in the workings of the FCC, they got in on the ground floor of the budding cell phone industry. In 1999, Roberts Wireless won a contract with Sprint to build cell networks across rural Missouri; two years later, the brothers sold the company and eventually cashed in stock worth more than $200 million.

Those deals made the Roberts brothers big names. Magazines from BusinessWeek to Black Enterprise profiled them as a bootstrapping success story. In a city with few African-American business leaders, they stood out. They held themselves up as examples of how smart black people could make it in the business world. That’s why they put their name on all their holdings, Mike Roberts said last week — to show kids there’s opportunity beyond sports and hip-hop.

“We want young people to see (our buildings) and ask: ‘Who is Roberts?’” he said. “And when they see who Roberts is, they’ll know they can do that, too.”

After they hit it big in wireless, the brothers started putting that name on something more tangible than cell phone towers. In quick succession in 2003 and 2004, they bought the Mayfair, the American Theater on 9th Street, and the former Board of Education building on Locust. They began planning a high-end high-rise tower like nothing their hometown had seen in years. Then they got into the hotel business, cobbling together 11 Roberts properties from Tampa to Texas.


They bought all the hotels during the headier days of the mid-2000s. The Roberts say they put $135 million of their own money into purchasing and renovating them. Then in 2008, bookings fell off a cliff, and they’ve never fully recovered.

When cash grew tight, the brothers started juggling bills, said Roberts Companies controller Larry Geurkink. The first priority was to keep the lights on. Then employee paychecks. Then bank notes and taxes. Often they would come up short. But in the end, they promise, it will all get settled.

“There’s never been a plan to not pay,” Steve said.

Still, the unpaid bills bother people, especially when considering the Roberts’ personal wealth.

Eric Jordan grew up in the same neighborhood they did. When he got in trouble with drugs, the Roberts brothers’ successes helped inspire him to turn his life around. “They really brought themselves up,” he said.

So a couple of years ago, Jordan jumped at the chance to work at the Mayfair. His view on the brothers soured, though, when the hotel stopped delivering paychecks on time last year. He can’t forget last Mother’s Day, when the Roberts’ families showed up for a lavish celebration in the hotel ballroom driving luxury cars at a time when late-paid hotel workers had trouble scraping together bus fare.

In December, after the late paychecks made news, the Roberts brothers held a meeting with workers to explain their financial challenges. That left Jordan circumspect about their problems. “I guess they caught a bad break like everyone else in this country,” said Jordan, who lost his job at the Mayfair earlier this year. “But they did some really dumb stuff.”


Ask about their troubles, and the Roberts point at lenders, business partners, the weak economy.

They blame CBS for the October bankruptcy filing of their TV division. The broadcaster, which shut down UPN to create the new CW network, didn’t let the Roberts stations — UPN affiliates — off the hook for advance syndication fees, they say. CBS — which won a $1 million court judgment last year in the dispute — says Roberts Broadcasting reneged on its contract.

Bank of America, they say, refused to work with them on the $34 million hotel loan, then sued with no warning. The bank disputes that claim.

The brothers say the Roberts Mayfair, a block from America’s Center, struggles because St. Louis doesn’t attract enough conventions. A spokeswoman for the Convention and Visitors Commission said business is up 12 percent over last year.

Wherever fault lies, few of the Roberts’ ventures lately have gone as planned. Take the Roberts’ Central West End hotel.

They bought the once-hip 1950s motor lodge on Lindell Boulevard out of foreclosure in 2007 and talked of a classy hotel and spa worthy of the city’s finest neighborhood. Then renovations grew long and litigious, with contractors and the Roberts suing each other over unpaid bills.

Those disputes were settled, though, and one hot day in June 2009, the Hotel Indigo opened. Before the ribbon-cutting, Mike and Steve sat at a table off their glass-walled lobby and recounted their business triumphs. This would be another, they said.

Within two years, the Indigo became a Comfort Inn. The lobby bar is closed. One recent Friday afternoon, the desk clerk was the only person in the lobby. Another employee was outside engaged in an obscenity-filled screaming match with a woman.


Earlier this month, in a St. Louis courtroom, two lawyers tried to figure out what to do about the $212,000 in unpaid taxes that the Roberts’ two St. Louis hotels owe the Missouri Department of Revenue.

One lawyer came from the state. He had filed to close the two hotels if the taxes don’t get paid. The other came from Pulaski Bank, which the Roberts still owe $6.9 million for the Central West End hotel. He doesn’t want it shut down.

“We can’t let our collateral go to heck,” said the bank’s lawyer, Larry Parres.

No one appeared for the Roberts. At that hour, the lawyers said, the brothers were being deposed in another suit. The hearing was postponed until April 30.

The brothers are in court a lot these days. Last week alone, two of their hotels filed bankruptcy. But, they say, it’s all part of the plan.

They stress that the bankruptcies are reorganizations. They just want to buy some time and work out a plan for the bigger bills.

The broadcasting case is proceeding as expected, Steve said, and they’ve hired bankers to sell a station or two to pay off creditors. Before Bank of America sued, they were in talks with hedge fund investors to sell a majority stake in the hotel group, they said.

“We’re looking for partners,” Steve said, regardless of the bankruptcies.

They point to their recent sale of 400 Washington Avenue — a failed hotel rehab — as an example. They found a buyer, negotiated a sale and tried to make the transition easy. Earlier this month, the building opened as market-rate apartments.

A similar strategy could work with their hotels, said Gary Andreas, a Chesterfield-based hotel consultant. With a lower cost structure and a strong management team, most have plenty of potential.

“There’s a saying in hotels: ‘The second owner is really happy,’” he said.

That could ultimately be the fate of the Roberts’ crown jewel, that empty $70 million condo tower.

Aside from the Thomas F. Eagleton U.S. Courthouse, it’s the tallest thing built downtown in a quarter-century. Sleek and modern, it looks more like something in Miami or Vancouver — and it was priced that way, too, at about $400 a square foot, well above the nearby loft rehabs.

Whatever market existed for half-million-dollar downtown condos evaporated in the recession, but by then the Roberts had already started building. They mostly used their own money, which spared them the lending crunch that walloped other builders. But delays and disputes with contractors dogged the tower even as it went up, floor-by-floor, through 2009.

Once the tower was done, little happened. A Shula’s 347 steakhouse opened in the ground floor last year, but closed within six months. Upstairs, the units remain unfinished, their floors bare concrete. Real estate brokers say they have had no luck finding anyone to buy from.

“People continue to ask me about it,” said Chris Grus, a downtown real estate agent. “We’ve made calls into the building and would love to see it developed as a condo. But we’ve never received a return phone call.”

The Roberts say they have mothballed the building. They have new plans, to find investors, double the number of units, and make them apartments.

“The downtown environment has changed,” Mike said. “It’s apartments now. Not condos.”

It’s a plan, anyway. One that would open the tower and generate cash. With $15 million, the Roberts say they could open in six months. But until they find an investor, the building sits, in limbo, just like the name of the men who built it.

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

Roberts Cos. Holdings

The Roberts Cos.’ vast holdings, including 11 hotels, four TV stations, a radio station and a theater, stretch from South Carolina to Texas. The company also owns the Roberts Isle condo development in the Bahamas. But the largest concentration of the company’s real estate and other businesses can be found in St. Louis.


The Roberts Tower, 411 North 8th Street. The 25-story downtown condo tower, built in 2010, cost more than $70 million. It remains unoccupied.

Roberts Mayfair Hotel at 806 Saint Charles St., purchased in 2003, adjoins the condo tower. The Missouri Department of Revenue wants an injunction to shut down the hotel over $212,000 in unpaid sales taxes for the Mayfair and the Roberts-owned Comfort Inn in the Central West End.

The Roberts Orpheum Theatre, located west of the Mayfair, seats 1,456. Roberts Cos. acquired the property at 416 North 9th Street in 2003.

Roberts Galerie on Washington Avenue has apartments and retail space.

The Victor Roberts Building, was converted from a former Sears building at 1408 N. Kingshighway, purchased in 1982. The company owns additional property on Kingshighway between Delmar and Martin Luther King Boulevard.

Roberts Place Homes, newly constructed near Union Boulevard and Enright Avenue, next to the former Enright School building, which the Roberts converted to the Roberts Place Lofts at 800 Arlington St.

Roberts Village, a 27,000-square-foot retail center with multiple tenants at Kingshighway and Martin Luther King.

Comfort Inn, Central West End was rebranded last year after the hotel at 4630 Lindell Blvd. had a falling out with Hotel Indigo. Pulaski Bank, a lender for the hotel’s renovation, filed a lawsuit on April 12 alleging the Roberts defaulted on $6.9 million. The bank has asked the court to appoint a receiver for the property so it can remain open; the state is trying to shut it down over unpaid sales taxes.

WRBU-TV, Channel 46 in St. Louis. The station began broadcasting in 1989. Roberts Broadcasting filed for bankruptcy in October 2011, and the company is seeking to sell one or more of its four TV stations.

917 Locust, 919 Locust and 923 Locust, three vacant properties in downtown St. Louis. Roberts Cos. sought to raze 921 and 923 Locust in 2008 to make way for a Hotel Indigo at 917 Locust, a 12-story building that’s on the National Register of Historic Places. The hotel plan never materialized.

Roberts Lofts on the Plaza, formerly the St. Louis Board of Education building, at 911 Locust, was purchased in 2003. The building has 57 apartments and 8,000 square feet of retail space.


Holiday Inn Southwest, 11160 Southwest Freeway, Houston. Underwent a multimillion-dollar renovation in 2008 but is now closed. Roberts Hotels Houston filed for bankruptcy on April 16.

Courtyard by Marriott, at 2383 Stemmons Trail, Dallas


Comfort Inn, 820 East Busch Blvd., Tampa. Bank of America is seeking to foreclose on the hotel, which is closed, alleging in a federal suit filed March 23 that the Roberts defaulted on a loan.

Mainstay Suites, 9200 College Parkway, Fort Myers, that underwent a multimillion-dollar renovation in recent years.


Vista Clarion Hotel, 1419 East 70th Street, Shreveport, La. Bank of America filed a lawsuit March 23 seeking to foreclose on the property, alleging the Roberts defaulted on a loan. A judge in that case approved the bank’s request to appoint a receiver for the hotel.


WAZE-TV in Evansville, Ind. Operated from Roberts Cos. headquarters in St. Louis.


Roberts Walthall Hotel, 225 E. Capitol St. in Jackson. Roberts’ limited liability company that owns the hotel, Roberts Hotels Jackson, filed for bankruptcy on Dec. 15. The company sought $11 million in Jackson Development Bonds for a renovation and to fix water damages, but was denied financing. Wells Fargo Bank sought to foreclose on the property. On April 5, in the bankruptcy case, Roberts Hotels Jackson requested that the bankruptcy be dismissed, which could mean that foreclosure proceedings will resume. The hotel is closed due to water damage.

WRBJ-TV, Channel 34, Jackson

WRJH-FM, Jackson


Downtown Benchmark Hotel at 164 Union Ave., Memphis, which is closed.

South Carolina

Clarion Hotel, a Roberts Hotel at 9027 Rainforest Road, Spartanburg. The hotel is closed.

WZRB, Channel 47 in Columbia.


Clarion Hotel at 1775 Parkway Place SE, Marietta.

Tim Logan covers economic development for the Post-Dispatch. He blogs on Building Blocks. Follow him on Twitter @tlwriter. Lisa Brown covers banking, consumer products and legal affairs for the Post-Dispatch. Follow her on Twitter @lisabrownstl. Follow the Business section @postdispatchbiz.

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