The Redevelopment Process

BACKGROUND:

Originally opened in 1884, this building was one of five extraordinary “new” Federal buildings commissioned after the Civil War. Though built to last, by 1942, all four of the others (in New York, Cincinnati, Philadelphia, and Boston) had been destroyed. Though saved by preservationists in the 1960s, its low tenancy and grave disrepair in the 1980s made its future look bleak. Renovations were done in the early 1990s, but their benefits were short lived; almost empty again by the mid-90s, the Old Post Office stood as a “hulking shadow of unfulfilled promise”.

In 1998, Downtown NOW put forth a detailed plan to revive the area now known as Post Office Square by focusing on the creation of an urban university campus. Webster University responded with interest, and in 2000, Downtown NOW’s President Tom Reeves called Mark Schnuck at The DESCO Group, and the late Al Kerth contacted DFC Group’s Steven Stogel; the two formed a partnership to transform this building through a uniquely collaborative public and private effort.

In 2001, the Missouri Court of Appeals, Eastern District (which needed space more accommodating to the public) found the third and fourth floors (1884 – 1935 home to the federal 8th Circuit Court of Appeals and District Court) to be an ideal fit. Their new lease was an auspicious start to the building’s redevelopment.

The development process involved a zero dollar transfer of the building by the U.S. General Services Administration (GSA) to the Missouri Development Finance Board (MDFB). The MDFB then long-term leased the building to an entity consisting of The DESCO Group and DFC Group, as the developers, and with U.S. Bank and the National Trust Community Investment Corporation as investors. This capital investment utilized both Federal and State Historic Tax Credits and Federal New Market Tax Credits. The construction and permanent loan debt financing came from two sources — Bank of America through Enterprise, and the MDFB. St. Louis corporations and a foundation gave an unprecedented $28 million to the MDFB to complete the financing.

With the foresight of federal, state and city governments, and this mix of financing, the Old Post Office and the new Ninth Street Garage were underway in October 2004. By the March 15, 2006 rededication ceremony, the building was 100% leased.

THE CHALLENGE:

The building was “a hole in the heart of downtown St. Louis”
7 adjacent historic buildings had been vacant for over 10 years
2 million sq. feet of the central business district stood vacant
Decay inhibiting all efforts at attracting/keeping businesses and tourists, preventing activity and street life
Lack of parking in area a significant impediment

GOALS:

Rebuild the market for district real estate
Make the district attractive to residents, business & visitors
Return historic buildings to productive use
Attract investment via historic tax credits & other incentives
Make the Old Post Office sustainable for future generations

STRATEGIES:

Ample parking with garage central to vacant buildings and Old Post Office (OPO)
Address open space/activity needs with plaza adjacent to OPO
Foster day/evening educational use at OPO
Foster Court use to preserve/ reuse historic OPO courtrooms
Complementary OPO tenancy – public & private, educational, judicial, for-profit and not-for-profit businesses
Capitalize on uniqueness & appeal of remaining historic structures
Forge productive partnership with Missouri Development Finance Board, DFC
Group, The DESCO Group, Downtown Now!, State of Missouri, Lenders, Equity Investors, Philanthropists

ACTION PLAN:

Acquire Century & Syndicate Trust buildings to prevent demolition of the Century and make development possible
Solve the parking issue with 1,050-space Ninth Street Garage
Support Webster University tenancy
Broad-based plan for Old Post Office, parking and public plaza
Support historic rehabilitation of surrounding buildings
Support RFP for historic rehabilitation of Syndicate Trust Building
Redevelop Old Post Office to historic preservation standards

RESULTS:

Old Post Office - 100% leased as of March 15, 2006 Rededication
Ninth Street Garage - 1,050 spaces, now fully leased
Total investments in surrounding buildings since completion of the OPO & the Ninth Street Garage have exceeded $300,000,000.
Board of Education Building - Renovation Completed
Orpheum Theater - Completed
Frisco Building - major leasing activity since reopening of OPO
United Missouri Bank (UMB) Building - completed
Arcade/Wright Buidling - Restoration Pending
Alexia (formerly the Chemical Building) - Under Restoration
Mayfair Hotel - Under Restoration
Roberts Tower - New Construction underway
Syndicate Trust Building - Under Restoration
Old Post Office Plaza - Completed

TENANTS:

Webster University
Missouri Court of Appeals, Eastern District
St. Louis Business Journal
St. Louis Public Library
FOCUS St. Louis
Missouri Attorney General
Missouri Secretary of State
Teach For America
Missouri Department of Health and Senior Services
Missouri Arts Council