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Old Posted Aug 17, 2005, 7:39 PM
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Aldermen, developers request TIF for three new East Loop projects
By Tim Woodcock
Posted Wednesday, August 17, 2005

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Lyda Krewson is heading up an effort to establish a multi-million dollar tax increment financing district for the eastern portion of the Delmar Loop. Krewson, 28th Ward Alderman, said the funding is necessary for three major projects that will help revive the area.

Part of the proposed TIF district is also in Frank Williamson’s 26th Ward.

The projects that would fall under the proposed TIF plan include a 120-room hotel, a small shopping center that may include restaurants and new-build condos.

Neal Shapiro, owner of The Original Cast Lighting at 6120 Delmar Blvd., bought the vacant buildings directly across the street from his business about 18 months ago. The buildings were last used by Yellow Cab Company. He plans to demolish them and replace them with a 33,600-square-foot retail center that he wants to fill with small and medium-sized businesses.

He and his son, Josh, working under the name Metroscapes, have been working on plans since the land changed hands and they now have architectural drawings showing a brick two-story building with metalwork archways and balconies on the second floor. The Lawrence Group drew up the plans, and it would be a $7 million project, Neal Shapiro said. The project would eliminate an “eyesore” and complete that block of Delmar, he said.

It would be a “very historical looking building” that will be compatible with the neighborhood, said Josh Shapiro, project manager.

Pace Properties has been hired to scout for tenants. The company is looking for several smaller tenants rather than one big one, Josh Shapiro said. There would be 65 parking spots available behind the building, he said.

Bundling the three projects together makes sense because the projects will feed off each other, Joe Edwards said. Edwards said he is particularly keen on the Shapiros’ proposed retail center. “I’m really excited by that even though it’s not my project,” he said.
“The area could use some more diverse restaurants,” Shapiro said, citing Mexican and Italian as obvious omissions in the mix of the cuisines offered in the Loop.

Joe Edwards, who owns a number of properties along Delmar east of Skinker Boulevard and whose Pageant music venue opened in 2000 and was the first major investment in the area in decades, has said he feels the area is saturated with restaurants and doesn’t need any more for the moment.

The building would also have second-floor offices that the company is hoping will be filled up by “creative types.” The Shapiros have developed space further east of Delmar and one of those offices was taken by a web development firm. “These people are very interested in this area,” Neal Shapiro said.

“If we get the TIF, then it’s a project,” Josh Shapiro said.

Krewson said she is having preliminary meetings with the city’s TIF Commission, which has the power to approve a plan — specifically dollar amounts and other terms — and then forward it to the Board of Aldermen to sign off on. A formal presentation could be made to the TIF Commission as early as Aug. 24. For the moment, Krewson said, she doesn’t want to talk exact dollar amounts.

TIFs are sometimes described as tax-linked loans. A portion of taxes generated by a new development — in this case three separate developments — is put into a special fund used to pay back TIF bonds issued at the start of the project. TIF bonds can only be used for infrastructure improvements and they typically cover 10 to 20 percent of a project’s total cost. Technically TIFs are loans rather than direct subsidies but they do reduce the amount of tax revenue going toward the city’s general fund and its school district.

Although what is proposed is a district TIF like the one in place in Grand Center, this one will have a “very different structure,” Krewson said.

That project has been hobbled by a lawsuit claiming that, as a religious institution, St. Louis University should not receive public funds, and in making this claim the lawsuit has halted other developments in the district unrelated to the university. Initially the idea of a TIF district was sold as being one that would create synergy between various elements and allow a greater flexibility in terms of the order in which sites are developed.

Krewson said she has studied different options for TIFs in great detail and feels that a structure that links the projects together is the best choice.

Edwards said he is hoping the TIF will allow him to put in a hotel at 6177 Delmar Blvd., the site of Ronald Jones’ funeral home.

“It is difficult to get financing for a hotel to start with,” but the TIF will help bridge that gap, he said. It would be a $15 million project — “that’s the closest estimate at this moment,” Edwards said — but many components still need to fall into place and that figure may go up or down.

Edwards said it would be a “sleek-looking” 10-story hotel designed by Kiku Obata & Co., the company responsible for the look of The Pageant and Regional Arts Commission’s new offices. In both look and function it would comple-ment The Pageant and Pin-Up Bowl, properties he owns on either side, Edwards said.

The historic funeral home building would not be torn down but built around, with additions above and behind the funeral home, Edwards said. Plans have not progressed much beyond the conceptual stage, he said.

Edwards said he has always thought the Loop needed a boutique hotel — “something unique to the Loop” — and he had a hotel in mind when he first bought the property. Edwards said he was open minded about other uses, but after investigation it became clear that it would be “almost impossible to adapt it for something else,” he said.

Those most likely to stay at the hotel and be particularly attracted by its location would be people coming from out of town for a concert at The Pageant and visitors to Washington University, he said.

Like the Shapiros, he said, “Without the TIF, it would not be possible.”
Bundling the three projects together makes sense because the projects will feed off each other, he said. Edwards said he is particularly keen on the Shapiros’ proposed retail center. “I’m really excited by that even though it’s not my project,” he said.

Two blocks farther east, at 5819 Delmar Blvd., Saaman Development is proposing building a 36-unit condo on land it owns. Currently the north side of that block houses a car wash and a vacant strip mall, just west of Saaman’s site. Along this section of Delmar much of the south side of the street is taken up by buildings owned by transit agency Metro.

The condos would be aimed at young professionals rather than empty nesters, said Mark Rubin, president of the company. Prices for the units in this project have not been calculated, but at Westgate and Vernon avenues in University City, another marginal area that has improved recently, the company is preparing to break ground; those units will sell for between $199,000 and $250,000.

Although not an established market as far as condos are concerned, areas immediately to the north have seen significant investment recently, and it is the kind of area that should be next in line for a renaissance after the Loop and the Central West End, Rubin said.

This project is further behind the other two and a tentative groundbreaking date would be late 2006, Rubin said.

The company could build without a TIF subsidy, but it would mean cheaper products and having to sell each unit at a higher price, he said. The district TIF makes sense because it allows the area to be developed “holistically rather than piece by piece,” he said.

There would be a small amount of streetscape improvements as part of the project, mainly lighting and landscaping in front of the new building, he said.

No total dollar amount for the project is available yet, he said.

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