ST. LOUIS — Continued delay on the start of a $104 million redevelopment of the historic and long-vacant Jefferson Arms building downtown is stirring controversy at City Hall.
Development officials say the project won’t meet city deadlines. Unions worry the developer won’t use qualified asbestos removers. And at least one key politician says he’s not necessarily committed to the project.
“I think we’d be hard-pressed to grant an extension after all this time,” said Aldermanic President Lewis Reed, a member of the city’s top fiscal body, the Board of Estimate and Apportionment, which approves nearly all city spending. The project, he said, would have to be “really compelling.”
“We need to know that our tax dollars are going to … put some of the people to work in and around the city,” Reed said Thursday.
The 13-story Jefferson Arms, at 410 North Tucker Boulevard, opened as a hotel in 1904, was converted in the 1970s into small apartments, and has been vacant since 2006.
Dallas-based Alterra Worldwide, led by Mukemmel “Mike” Sarimsakci, in 2016 announced a proposal to rehab the 500,000-square-foot building — one of the largest downtown. Plans now call for 239 apartments, a 198-room Marriott-brand hotel, a furniture store and restaurants.
Alterra has now told city officials it expects to finally complete its financing package by the end of the year.
But Otis Williams, who heads the city’s top development agency, says that probably wouldn’t allow enough time for the firm to meet the Dec. 31, 2020, deadline set by the city for completion of the project. Williams expects Alterra to seek an extension.
And Reed warned that approving an extension — and continuing the $17.4 million in city tax-increment financing approved in 2017 — isn’t a sure thing.
Meanwhile, St. Louis-area construction unions are concerned that Alterra will use a Texas company to handle $10 million in asbestos remediation work as part of the project. They held a rally on the steps of City Hall on Thursday to press the city to insist that all asbestos removal at the project be done by employees trained in a federally approved apprenticeship program. About 100 people, including many construction workers, attended the event.
Among the speakers was Teresa Page, a Belleville resident who said she developed mesothelioma — a type of cancer linked to asbestos exposure — after working for a local non-union demolition company.
Page called on the city to ensure that employers “don’t cut corners by hiring cheap laborers … instead of safe asbestos abatement teams in your local unions.”
Alterra officials could not be reached for comment Thursday.
Williams, the executive director of St. Louis Development Corp., said any company involved in asbestos abatement on the project would have to be certified to do so by the Missouri Department of Natural Resources.
In addition, according to city TIF rules in place at the time Alterra agreement was passed, a project getting such aid must set a goal of at least 15 percent of all labor hours be performed by apprentices in a federally-approved program.
Williams said Alterra had indicated to him that the Texas company would work with a local site demolition firm.
Alterra also told him, Williams said, that there would be both union and non-union employees used on the project.
Brandon Flinn, business manager for the Laborers Union’s eastern Missouri district council, said when union officials met with Alterra, “they were evasive on that.” Two such sessions were organized by Mayor Lyda Krewson.
Krewson could not be reached for comment Thursday. In an estimate board discussion of the project last week, she pointed out that the city is “a major investor in the project” via the TIF.
“I do think it’s important that the workers on this project meet the local development requirements,” she said. “We want city residents and city companies and regional residents and companies to have an opportunity to work on this project.”
Like Reed, she stopped short of specifying a number or percentage.
City TIF rules covering the project say developers should try to have city residents perform 20 percent of all “labor hours.”
In addition to the $17.4 million in TIF financing, the city has approved $2.6 million generated from special sales taxes that would be charged at the site.
Alterra’s efforts to put together the rest of the financing stalled last year when it wasn’t granted $10 million in Missouri brownfield tax credits. Brownfields are vacant sites with environmental contamination.
Williams told the estimate board last week that it’s not unusual for delays in large projects as developers put together financing. “This is a little longer than normal,” he said.
Alderman Cara Spencer, D-20th Ward, said she believes that any extension of the project completion deadline would have to be approved by the Board of Aldermen in addition to the estimate board. She said she has yet to get confirmation of that from city development officials.
Among other things, she said, any new agreement should require that an Alterra affiliate pay more than $65,000 in 2018 city property taxes, interest and penalties it owes on the Jefferson Arms site.