Montgomery banking $100 million on Clayton
St. Louis Business Journal
May 11, 2007
has a $100 million plan to build a tower in the heart of Clayton, where it intends to move its headquarters from Sikeston.
The bank is finalizing its acquisition of five Clayton properties at the southeast corner of Central Avenue and Forsyth, across the street from the St. Louis County Police Department Headquarters.
The tower will have between 25 and 30 floors, with office, retail and residential components, said Joel Montgomery, one of the principals of privately held, family-owned Montgomery Bank and also its general counsel.
The residential component could either be condos or a hotel, he said. Planning is still in preliminary stages; the project will be presented to Clayton officials in the coming months, Montgomery said. Construction could start in 18 months.
A few of the tenants in the buildings the bank has acquired are World News, St. Louis Bread Co. and Bella Yoga. Two buildings it was acquiring this week house Wasabi, Pasta Plus and Jerome E. Glick Real Estate. "We have some tenants with existing leases that would require us to come to terms," Montgomery said.
Montgomery Bank has 13 branches in Missouri and two branches in South Florida. The Missouri-chartered bank, which employs 212 people, had more than $909 million in assets as of Dec. 31, 2006, according to the Federal Deposit Insurance Corp. Its net income in 2006 was $7.5 million, down from $8.8 million in 2005, according to the FDIC.
Montgomery Bank's St. Louis-area branches are in Affton, Bridgeton, St. Louis Hills, Chesterfield, South County and Crestwood. It's opening a seventh St. Louis-area bank in Des Peres on June 1.
Once construction of the tower in Clayton is complete, the bank will open a 4,000-square-foot branch on the ground floor. Its corporate offices also will be located in the building, which Montgomery described as "a premier corner." Montgomery Bank has already taken steps to establish a corporate presence in St. Louis. In October 2006, the bank hired St. Louisan Kenneth Witbrodt Jr. as its chief executive, whose office is based in St. Louis. Witbrodt previously served as chief operating officer of Cass Bank.
Montgomery Bank also took on sponsorship of the Exploradome at the St. Louis Science Center in February 2006, giving it highly visible exterior signage on Highway 40.
"With all the mergers and acquisitions already occurring in the past five to 10 years, there seems to be an opportunity for a community bank to do business in St. Louis," Montgomery said. "We think the development will provide a good long-term investment for us."
Putting together the pieces
Montgomery Bank began looking for property to build a headquarters in Clayton last year. In August, the bank purchased the 10,434-square-foot building at 4 S. Central that houses World News and Bella Yoga. The building was purchased from Roberta Selvidge for $1.75 million. Montgomery purchased the 8,604-square-foot building at 10 S. Central, which houses a St. Louis Bread Co. restaurant, in recent weeks for an undisclosed amount from owner Mabel Kurtz. The property was appraised for $705,800 in 2006.
The bank planned to close May 9 on two properties, 14 S. Central and 18 S. Central, both owned by Missouri Real Estate & Insurance Agency, for $4.3 million. Missouri Real Estate & Insurance Agency is an affiliate of Belleville-based Moto Inc., led by President Jim Forsyth. Tenants in those two buildings include Phillip John Jewelers, Wasabi, Jerome E. Glick Real Estate and Pasta Plus.
Montgomery Bank has one final piece of the redevelopment area under contract: the building at 7820 Forsyth, which is immediately east of the building that houses World News. It is under contract from Forsyth Venture Property for an undisclosed amount, and the bank plans to close on the property in late May or early June, Montgomery said. The building was appraised for $800,000 in 2006. The current owners of 7820 Forsyth are not related to Jim Forsyth.
All five properties will be razed to make way for the new tower.
World News co-owner Ann Pointer said she would like to either become a tenant in Montgomery Bank's new building or locate elsewhere in Clayton once construction is under way.
World News first opened at the site in 256 square feet of space in 1967. In 1992, it expanded to its current size, 2,000 square feet. Pointer's family owned the building World News is located in before selling it to Montgomery Bank in August.
"We're healthy and alive and looking for space," Pointer said. "We want to stay in Clayton. We've talked to Joel (Montgomery), and we could move into the project."
Construction cranes will dot the skyline in Clayton for the next few years, as several other high-rise developments are planned for the city. St. Louis-based Centene Corp. is planning to build the $210 million, 700,000-square-foot Centene Plaza at Forsyth Boulevard and Hanley Road, which will include space for the firm's headquarters and 1,200 corporate employees as well as additional office and retail space for lease.
Construction is under way at The Crescent, Mark S. Mehlman Realty's $40 million mixed-use development on the north side of Carondelet Plaza across from the Plaza in Clayton. That development includes 72 condos and more than 25,000 square feet of retail space. A proposed $100 million second phase would add a 100,000-square-foot outdoor retail center, 102,000 square feet of office space, a 100-room hotel and a 755-car garage.
"Clayton is a strong market and it's always been a strong market," said Josh Corson, principal of Clayton-based Mark S. Mehlman Realty. "Development spurs other development. As these big buildings start to go up, people look at the market and see there are other opportunities."
East of The Crescent, Chicago-based Orchard Development Group is moving forward with its $150 million mixed-use development, the Trianon, located at 7454 Forsyth. That project includes plans for 300 condominiums and 31,260 square feet of office space.
Montgomery Bank at a glance
CEO: Kenneth Witbrodt Jr.
Current headquarters: Sikeston
No. of employees: 212
Assets: Exceed $909 million
No. of branches: 15