Development in the Chesterfield Valley, which was under water in 1993, includes numerous stores in a large strip mall. (Teak Phillips/P-D)

For Mike Hejna, the decision to build a $20 million shopping center in the high-profile flood plain of Chesterfield Valley was a matter of risk and opportunity.

A small risk, Hejna says, and a big opportunity.

Critics - who believe the valley will again be under 10 feet of water like it was in 1993 - say he's playing Russian roulette with the Missouri River.

But Hejna, president of Gundaker Commercial Group, thinks the odds are stacked heavily in his favor, thanks to a rebuilt Monarch Levee that will soon protect against a so-called 500-year flood.

"The likelihood of it ever flooding again is slim to remote," says Hejna. "Maybe it will flood 200 years from now. And I might still be here."

In the decade since the Flood of '93 destroyed much of the valley, the area's business community has stormed back with a vengeance.

In just 10 years, new investment has topped $400 million. The boom has been led by the area's massive new centerpiece: Chesterfield Commons. Billed as America's largest strip mall, the 1.3 million-square-foot Commons has become the St. Louis region's primary Mecca for big-box retail.

Like a pied piper, the shopping center has led others - a carpet company, a natural foods producer and a Bentley car dealer, to name a few - to the 4,700-acre flood plain.

In response, the valley's once depressed property values have skyrocketed, and property is now worth five times as much as in 1994.

The comeback was all made possible by more than $50 million in levee, road and sewer upgrades, which were funded through an intricate mixture of public dollars.

While the valley's return has been cheered inside Chesterfield, not everyone is smiling.

Critics say the comeback is an unnecessary risk. They say raising the Monarch Levee and rebuilding the flood-prone valley is part of a larger, systemic problem - one that will cause even more flooding in the future.

"It's just stupid," says Wayne Freeman, executive director of the Great Rivers Habitat Alliance, an environmental group based in St. Louis. "It's hard for me to understand why people don't think it's a bad idea to develop the flood plain."

Proponents remain undeterred. For them, raising the Monarch Levee and encouraging development was just a matter of saving their businesses and trying to recover the hundreds of millions of dollars lost in 1993.

"I think we'd be derelict if we didn't do everything we could to raise that levee," said Earl Hoffman, chairman of the Monarch-Chesterfield Levee District. "I don't know who this is not a win-win situation for."

Like it or hate it, both sides of the matter agree on this point: Chesterfield Valley business owners who set out to build a 500-year levee and redevelop their flood-damaged area were highly successful in reaching their goals. Indeed, they've set a model for riverfront communities across the state and region.

The Missouri River didn't just flood the Chesterfield Valley in 1993. It punched a gaping hole in the Monarch Levee and filled the 4,700-acre valley with up to 12 feet of muddy, murky water.

It smashed windows, broke through floors and left buildings old and new to rot in its wake. It bowled over jets at Spirit of St. Louis Airport and caused a half-mile stretch of Highway 40 to disappear beneath its opaque surface. And it forced 240 business owners to seek shelter temporarily outside the valley.

Then, the river made the growing commercial corridor a part of its vast, flowing expanse for the better part of two months. When all was said and done, the '93 flood caused $200 million in damage in Chesterfield Valley.

"I still remember that pungent river odor," said Richard "Dick" Hrabko, executive director of Spirit of St. Louis Airport, the county-owned airfield on the western fringe of Chesterfield Valley. "That's an experience I don't ever want to happen again."

The flood put the airport out of commission for more than two months and totaled the landmark Smoke House market and Annie Gunn's restaurant on the valley's eastern edge. Owner Thom Sehnert had just paid off the loan he and his wife had taken out to buy the market a decade earlier.

Like many business owners in the valley, Sehnert lacked flood insurance. "It was all that Jane and I had," he said.

Property values plummeted instantly. Meanwhile, private insurers pulled the plug on writing new policies for businesses in the valley.

To make matters worse, the Federal Emergency Management Agency cut Chesterfield Valley off from the federal flood insurance program until the Monarch Levee was repaired and recertified.

Companies in the valley began to look for new homes.

Joan Schmelig, director of the Chesterfield Chamber of Commerce, says she tries to wash the memories of the flood from her mind.

When asked about the '93 disaster, Schmelig said, "We try not to bring it up."



"I think the flood caught
us all by surprise"




The Missouri also took something else from the city of Chesterfield in 1993 - the valley's imminent promise.

Just days before the flood, Indianapolis developer Adrian Brown was finalizing plans to bring big-box retail to the valley for the first time.

Then, on the morning of July 31, 1993, he awoke to horror. From his room at the Doubletree Hotel on Chesterfield's bluff, he looked out his window and saw the valley filling up like a bathtub. He was within a day or so of signing a contract to buy land.

"There was no way we could do the project after that," said Brown. "Until something was corrected, retailers wouldn't want to go there. They'd be too worried that someday they would see their store floating."

Before the flood, valley landowners were in a hot corridor for retail and industrial development, watching their land value grow into a gold mine. Within a few hours, they couldn't have given their property away.

Kent Kehr, a St. Louis-based developer and real estate investor, owned an office building he said was worth $1.7 million in early 1993. After the flood, Kehr said, his property was worth pennies.

"I think the flood caught us all by surprise because we all believed the levee was adequate," he said.

Before the flood, the Monarch Levee was considered by FEMA to be a 100-year levee, meaning that the valley it protected had roughly a 1 percent chance of flooding in any given year. By comparison, a community protected by a 500-year levee has about a 0.2 percent chance of flooding in a given year.

At a meeting held less than two weeks after the disaster, Kehr and other business owners were left pondering this question: If their 100-year levee wasn't adequate, than what was? With their properties still under water, they decided that a 500-year levee must be built.

In doing so, they took their cues from Riverport and Earth City, two downstream St. Louis County areas that stayed dry during the summer of 1993 when the Missouri River's fury was at its worst. Both sat safely behind 500-year levees.

"People look at Earth City and Riverport and they see that neither of those communities were flooded," said David Human, an attorney with Husch & Eppenberger and the executive director of the Monarch-Chesterfield Levee District. "People see those levees and they think that maybe we should have one, too."

"All levees break
at some point"




"Levee envy" is the term environmental groups have fashioned for that trend, which they blame in part for rising flood levels.

Levees, they argue, increase flooding upstream by choking a river and backing up water. Rather than preventing floods, levees merely make them someone else's problem, opponents of flood plain development say.

"By developing these levees, you're just pushing the water off into someone else's back yard," said Don Musick, president of Musick Construction Co. and a board member of the environmental group Great Rivers Habitat Alliance. "What Chesterfield Valley does directly affects what happens in St. Charles County."

In the case of the Monarch Levee, raising it to the 500-year level will increase flood heights upstream in the Missouri River by 0.8 feet, the U.S. Army Corps of Engineers found.

Among other issues, Musick's group also argues that building in the flood plain is a risk to taxpayers, who often get stuck with the bill when the federal government buys out flood-damaged property.

Further, critics say that highly developed flood plains can put a burden on the federal flood insurance program in the case of a major flood. Currently, FEMA insures more than $100 million worth of property in Chesterfield.

"All levees break at some point," said Musick, whose company develops land in other parts of St. Louis County. "It's not a matter of if it will break, it's when will it break."

That logic had few supporters in Chesterfield in 1993. In fact, when Chesterfield resident Allan Sheppard tried to wage a similar campaign at City Hall, he said, he came just short of being run out of town.

At a late '93 council meeting, Sheppard suggested that the valley be sold to the federal government and set aside for a natural park.

"Flood plains are there for a reason," said Sheppard, who was later elected to the City Council. "Any use of the land for any other purpose is a misuse of the land."

Sheppard said he was sternly lectured by Councilman Ed Levinson about the profits to be made off flood plains.

"It was all developed because of greed, plain old greed," Sheppard said.

"The levee protects
the airport"




In late 1993, Chesterfield began to craft a plan to build an elaborate, new levee system.

Sehnert, who boldly sought a loan to rebuild the Smoke House before the water even receded, became the symbolic leader of the movement. But Sehnert said the real motivation to raise the Monarch Levee should have been to protect Spirit of St. Louis Airport and Highway 40.

Sen. Jim Talent, R-Mo., agrees.

"You can't move Spirit airport and you can't move Highway 40," said Talent, a Chesterfield resident, who as a congressman pushed for federal funding to rebuild the Monarch Levee. "The levee was needed to protect all the development that was already there and was already so vital."

Built in 1964, Spirit of St. Louis Airport had become the region's main hub for corporate aircraft by 1993. Before the flood, it was the second-busiest airport in a four-state region of Missouri, Iowa, Kansas and Nebraska. The Federal Aviation Administration had taken notice and declared Spirit the primary reliever for Lambert Field.

With that in mind, proponents argue that, for the airport's sake, the Monarch Levee had to be repaired - and it had to be improved.

"There are corporations who wouldn't be in (the St. Louis region) if it weren't for Spirit," says Hrabko, the airport's longtime director. "It's an economic engine. You want this airport to be here and you want it to be good. It creates jobs.

"The levee protects the airport," he said. "If you don't have a levee, you don't have an airport."

And because of the airport, the Chesterfield cause also drew support from St. Louis County government, which owns the airport, and from major corporations like Anheuser-Busch Cos. and Emerson, which park their fleet of corporate jets there.

Hrabko's influence didn't hurt, either. A Chesterfield City Councilman in 1993, he was also elected to the levee district's board soon after the flood.

Meanwhile, Highway 40 brought the state and federal governments into the equation. The highway, which was becoming an important link between St. Louis and St. Charles County, was impassable during the flood. That, in turn, tied up other major roads, especially Interstate 70.

In its study of the project, the Army Corps of Engineers found that raising the Monarch Levee to the 500-year level would have annual economic benefits of $4.6 million. The corps report estimated that the project would cause an average of $15,350 in flood damage annually.

"Yes, the levee is going to back up water," said Human, the director of the Monarch-Chesterfield Levee District. "But when you look at the benefits, that cost is relatively small."

Small-business owners like Sehnert added a folksy element to the rebuilding movement. He was the underdog, the little guy who made it easier for outsiders to root for the valley. The kind that John Langa, former director of the Chesterfield Community Development Corp., refers to as Joe Valley.

"Guys like that were the backbone of the valley and they were saying, 'What do you mean we're not going to get the valley going again?'" Langa said. "These are the guys who owned businesses and kept them running through the flood. They kept together and they kept people on their payroll. They kept a lot of bellies fed, and that's pretty remarkable, if you asked me.

"If that doesn't make you want to rebuild this thing, nothing will."

Valley as retail Mecca?
Folks would've giggled




Bolstering the Monarch Levee system, however, carried a hefty price tag of $58 million, according to Army Corps of Engineers estimates.

So as local groups often do when faced with a major problem, Chesterfield businesses knocked on the door of the federal government.

Talent began to mobilize in Congress. He sponsored a bill to have the corps study the possibility of funding Monarch Levee improvements.

To help navigate through the thick federal bureaucracy, the city and business owners hired Lee McKinney, a retired district engineer for the corps' St. Louis district.

But the valley was unwilling to wait for the slow workings of the federal government. Treading into controversial territory, the city created a tax increment financing district in 1994.

That plan named $72.5 million of specific improvements that would attract new development. Besides raising the Monarch Levee to the 500-year level, they also included upgrading Highway 40, improving drainage and building new roads.

The plan called for developers, the levee district and others to pay for the improvements and then later be reimbursed through a pot of TIF revenue. That revenue was to be generated by setting aside taxes on future development.

The plan also mapped out areas for certain kinds of development. At the current site of Chesterfield Commons, the city called for warehouses and office buildings. But that plan was about to be rewritten, compliments of the world's largest retailer.

In early 1994, a mega-shopping center in the valley seemed a little far-fetched.

"To say then that the Valley would be a retail Mecca, people would have giggled," Langa said.

Wal-Mart "thought
I was crazy"




The folks at Wal-Mart Stores Inc. laughed, too, in 1993 when local developer Michael Staenberg pitched the idea of opening a store in the valley, an area under 10 feet of water just a few months before.

"They thought I was crazy," said Staenberg, president of THF Realty, an Overland-based developer founded in the early '90s by Staenberg and his partner, Stan Kroenke. THF has become known for building Wal-Mart-anchored shopping centers across the country. Kroenke's wife, Ann, is the niece of Wal-Mart founder Sam Walton.

Staenberg had wanted to build a large shopping center in Chesterfield Valley for years, and he knew he needed Wal-Mart to forge into what was virgin territory for retailers.

"Wal-Mart had to be the catalyst," he said. "Nobody else would commit until I had Wal-Mart committed. Remember, Wal-Mart's the most successful retailer in the country. People think that if Wal-Mart thinks it's a good place to go, then it's a good place to go."

Over the years, when Staenberg tried to sell the idea to the Bentonville, Ark.-based retailer, the answer was always the same: "No."

But Staenberg did have this going for him: Wal-Mart clearly wanted to be in Chesterfield and had coveted a spot in the affluent, growing community since 1983.

The problem was, Wal-Mart wanted to be on the nearby bluff, close to Chesterfield Mall. Landowners there, however, would hear nothing of it.

So for Wal-Mart in the late '80s and early '90s, it was valley or bust, and the retailer picked bust.

Still, Staenberg was determined. Langa said: "He reminded me of a dog when it won't let something go. ... He kept at it, and it worked."

The 1994 TIF gave his idea new life. When the TIF proposal was put on the table, Staenberg began to take a keen interest in Chesterfield city government, Langa said. He attended meetings, where he'd usually sit in the back of the room as a silent observer.

And he hired a team of specialists to push his interests through. He brought in Michael Doster, a Chesterfield-based lawyer, to negotiate through the maze of TIF laws. Staenberg also hired traffic consultant Bill Bunte to help lobby for the right highway exits.

He also began to quietly negotiate with property owners for land.

As plans to raise the Monarch Levee took shape, Wal-Mart took notice. In 1995, the company's executive committee officially considered opening a store in the valley. By then, Tom Seay, then the vice president of real estate and construction for Wal-Mart, was backing the idea.

He had some high-placed opposition. David Glass, chief executive of Wal-Mart, was completely against the idea, Seay said.

"His concern was that it was too far removed from the existing retail hub," Seay said. "He thought people would never drive out there."

In the end, Glass was outvoted by other members of the Wal-Mart executive board, but not before he succeeded in putting a heavy burden on THF. At Glass's urging, an agreement between the two entities gave Staenberg two years to build the Boone's Crossing interchange and line up an additional 300,000 square feet of retail.

If he couldn't, Wal-Mart would walk away.



"Why were we not
concerned? ... Wal-Mart"




With Wal-Mart on board, things seemed to fall into place for Staenberg and for the valley.

The power of the world's largest retailer is perhaps best described by John Wild, the executive director of the Missouri Higher Education Loan Authority. As the Valley continued to recover, Wild decided to move his company's headquarters to a new, $12 million building there in 2002.

"Why were we not concerned?" asks Wild, who is also the mayor of Wildwood. "I have a one-word answer for that question: Wal-Mart. If the levee's good enough for Stan Kroenke and that crowd, then it's good enough for us."

That theory could be applied to retailers, too. With Wal-Mart committed, Staenberg easily recruited other big-box retailers.

When Chesterfield Commons is completed, THF will have invested more than $350 million in Chesterfield Valley. The strip mall, with its Lowe's, Target Greatland, Sam's Club and others, will be the size of 289 football fields.

A shopping center that mammoth carries with it a gravy train large enough for the entire valley.

THF Realty fronted $29 million toward raising the Monarch Levee and other new infrastructure. Most of that has been reimbursed through the TIF.

THF has also led an influx of new retailers which have further fattened the TIF pot to the point that it generates more than $10 million a year. That's been enough to rebuild the Monarch Levee to the brink of 500-year-flood protection.


Environmentalists
question study's figures



If everything goes right, the federal government will foot much of the rest of the bill.

In 2000, after seven years of studying the project, the corps agreed to pay for raising the Monarch Levee. David Human estimates that more than $20 million in high-dollar segments of the project remain. The corps' involvement in the project is also a lightning rod for environmentalists and other critics.

At the heart of the criticism is the corps' finding that raising the Monarch Levee will increase flood heights along the Missouri River by 0.8 feet.

Environmentalists question the corps' math in reaching that figure.

In an earlier report, the corps found that the Monarch Levee project would raise flood heights by 3.4 feet.

"How did all that just magically disappear?" said Edward J. "Ted" Heisel, senior law and policy coordinator for the Missouri Coalition for the Environment.

Dennis Stephens, chief of hydrologic engineering for the corps' St. Louis District, said the original estimate of 3.4 feet contained outdated information, including an inaccurate assessment of the bridge. The new figure was based on a whole new set of data that was calibrated to the 1993 and '95 floods, he said. Stephens did both calculations.

While neither of those figures sounds like a whole lot, Heisel said that when combined with other levees in St. Louis County, the Monarch Levee can have a serious effect on raising water heights.

As a result, a levee like Monarch, that's supposed to be at the 500-year- flood level, may actually provide much less protection. "You have some people who will say that maybe it's not even a 100-year levee anymore," Heisel said. "I really think the majority of the public thinks this kind of development is crazy."

"I'm not really concerned
at all about the flood"




But the building boom in Chesterfield shows no signs of slowing.

Wehrenberg Theatres and THF Realty are building a 14-screen, $15 million theater at Chesterfield Commons. Meanwhile, the western side of the valley has seen a steady stream of new offices and industrial plants.

The numbers are somewhat staggering. Just after the flood in 1993, the valley had about 3 million square feet of development. That more than doubled to 6 million by last year. Hejna, of Gundaker Commercial, expects it to double again in the next decade.

The biggest winners from all this may be Chesterfield Valley's landowners. In the mid-'90s, developers were paying less than $1 a square foot to buy land in the valley. Recently, that figure has shot up to more than $20 in some parts of the area, Staenberg said.

The benefits there are also enjoyed by Chesterfield Valley's businesses - old and new. Because of levee improvements, businesses there, from Sam's Club to Steak 'n Shake, are now eligible for federal flood insurance. A 500-year levee, meanwhile, sharply cuts their private insurance bill.

And the valley has quickly become the envy of retail hubs across the St. Louis region. More than 35,000 people visit Chesterfield Commons each day. Retailers there sell more than $300 million of goods each year.

Meanwhile, THF Realty is commanding some of the highest retail space rents in the region at Chesterfield Commons. Retailers pay THF between $22 and $24 per square foot for the right to be there.

Groups such as the Rockwood School District also will benefit soon, as the growing pot of new tax revenue is filtered to them, instead of the levee and other TIF projects. THF alone pays $3 million in property taxes annually on its land in the valley, and its tenants generate more than $20 million in sales taxes, the developer says.

Staenberg expects the success to continue as the retail corridor grows. And, like most other business people in the valley, he says that it "absolutely" won't flood again.

That feeling is echoed by Larry Moskoff, founder of one of the valley's more successful upstarts, Thunder Aviation.

"I'm not really concerned at all about the flood," Moskoff said. "If we ever get a flood of that magnitude, I'm sure Noah and his Ark will be around the next bend."



Reporter Eric Heisler:
E-mail: eheisler@post-dispatch.com
Phone: 314-340-8183