Grove Properties Set to Invest $2.8M, Revive 12 Buildings in The Grove

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Grove Properties - Forest Park Southeast, St. Louis MO

After a decade of methodically building a portfolio of completed for sale homes and apartments under management in the city’s Forest Park Southeast neighborhood, Grove Properties is set to significantly increase its investment. The next phase of development includes four single-family homes and two town homes for sale, and the renovation of 14 apartment units.

Grove Properties is known for some dramatic renovations in a neighborhood that has seen drastic change over the past decade. Vacant homes have increased in price from less than $10/sf to $25/sf or more. The company has pushed gut rehab home sales well over the $100/sf price. Their complete gut rehabs have found success in a micro housing market that offers little variety.

Grove Properties - Forest Park Southeast, St. Louis MO{Grove Properties projects highlighted in yellow}

Now, 12 buildings are being redeveloped at a total investment cost of $2.8M. The properties are located both north and south of Manchester Avenue. Redevelopment has been much more common north of the neighborhood’s central dividing line. The Forest Park Southeast Historic District was recently expanded to encompass much of the area south of Manchester. The most unlikely buildings to be rehabbed may be 4145 Chouteau, 4370  Swan, and 1210 South Newstead, though none are currently in good condition.

The largest project will be the renovation of 916-924 Talmage, a row of three buildings on a truncated street on the neighborhood’s northern boundary. Castle parapets mark the three identical buildings dating from 1906. Vacant for several years, the buildings will be renovated as six total apartments.

Tax abatement is being sought for all properties. Estimates show an approximate seven-fold increase in property tax revenue after renovation. If granted, the proposed 10-year tax abatement would expire in 2024, resulting in aggregate revenue of  $33,254 annually, up from the current $4,701.

Grove Properties - Forest Park Southeast, St. Louis MO{1210 S. Newstead will be renovated into two rental units}

In general, renovations and new development in The Grove have been supported with tax abatement, though in certain circumstances projects have received a five year abatement instead of 10. Despite recent significant investments including the Urban Chestnut Brewing Company Brewery & Bierhall, there remain more than 120 vacant lots, and 40 vacant buildings in The Grove.

Grove Properties has completed approximately 35 renovations in Forest Park Southeast. Its largest single property is the Lambskin Temple Lofts, visible from Kingshighway, just south of Interstate 64. Grove Properties is a nextSTL advertiser.

Grove Properties - Forest Park Southeast, St. Louis MO{4145 Chouteau Avenue will be renovated as a for sale single family home}

Two before and after images from Grove Properties:

Brick bungalow before_after

4440 Arco

______________________________

Permits for the three buildings on Talmage Avenue were issued in September 2016, with working beginning in October. Work appears to have begun on the adjacent corner property at 4145 Chouteau as well. A newly constructed home at 4141 Chouteau sold for $350K in August of 2016.

November 2016:

talmage_chouteau_nov-16

Residential infill at 4145 Chouteau:

4141 Chouteau

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  • What’s up with the old Providence School on Sarpy Ave.? Why is that still vacant?

  • John R

    The Grove appears to be exploding…. 250+ apartments + grocer + additional commercial planned for the excess Commerce site by Green Street. And that’s only Phase I!

  • Presbyterian

    This is good news. Lots of new investment in the Grove. Any idea what Wash U’s plans are? They’ve been gobbling up the empty lots south of Manchester.

    • CWE1959

      It is my understanding that Wash U Development Corp are continuing to direct future development by purchasing vacant/blighted properties and identifying what it believes are the appropriate developments/developers to which the properties should be sold. Much of the development in FPSE is highly orchestrated.

      • Alex Ihnen

        This, I believe, overstates the issue. The WU Medical Center Redecelopment Corporation owns maybe 90 lots in The Grove. They fund GroveFest, murals, lighting projects and more. From my years in the neighborhood and work on the development committee there, I’d say that WUMCRC helps shape policy, such as zoning, prohibited businesses, etc., but I have not seen them take an active role in denying a developer a rehab or purchase. That’s not to say that they don’t weigh in, but rather they’re happy to see good developers investing in the neighborhood, and that they are far from wielding veto power over development of buildings and lots they don’t own.

  • MiguelTejada82

    These shouldn’t get a tax abatement. The city is giving up $250,000 (discounted revenue over 20 years) for homes that are going to be rehabbed anyways? This isn’t a dead office building – these are single family homes!

    • Alex Ihnen

      The question is if and when some of these may have been rehabbed. I certainly understand the issue. If 10yr abatement moves up renovation by 5yrs, and results in a higher assessed value end product, the equation really flattens out. In the end, my opinion is that despite some success, there’s still a ton of work to do in The Grove. While I don’t at all mean to say that all abatement is good, here you’re looking at $2.8M in private investment in the city, a dozen revitalized buildings, and without a negative budgetary impact. We see shorter abatements and some being denied, but small residential buildings like these are the most difficult to make work financially, so we’ll likely see continued abatement for some time. There are too many challenging properties and not enough developers.

      • MiguelTejada82

        Disagree – in fact its these rehabs that are usually the easiest to finance. Purchase prices are nothing and rehab costs (when done by people who know what they’re doing) are between $40-$80/ft. Take a standard 1000 sqft home and drop $30,000 for the property and spend say $60,000 on the rehab, you should be able to sell it for $125,000, or rent it out for $1200/mo which easily covers the debt service on a $90k loan. An abatement is critical for the NOI on a rental property which is why apartments and offices want them so badly, but those single family jobs shouldn’t be eligible.

        • Alex Ihnen

          My experience and understanding of single family for sale rehabs is quite different from the numbers you cite.

          • MiguelTejada82

            The abatement is merely icing on the cake for a buyer. People who live in Ladue or Clayton don’t care about the property taxes because A. They’re rich and B. they’re know what they’re getting. Someone buying a home in STL isn’t going to balk at a higher property tax rate if they want to live there. All it does is reward someone who was going to buy anyways.

          • Alex Ihnen

            I don’t think this is true, and certainly not true from my own experience.

          • MiguelTejada82

            So I took another look at the taxes – am I really reading this right? $7.58 per every $100 of assessed value? A 7.58% property tax!? If that’s real, no one should ever live in the city. Ever.

          • stldoc

            No that is not correct. Honestly I’m not sure what the rates are but I know my parents live in St. Charles and we live in the city, both having similar priced homes and we both pay about the same in property taxes. Technically my parents pay a little more, but is in the same ballpark.

          • MiguelTejada82

            Then my original point stands.

          • matimal

            That we all pay similar rates of property tax?

          • MiguelTejada82

            That these shouldn’t get an abatement.

          • matimal

            Do you receive a mortgage interest deduction? Do you pay for the roads you use?

          • MiguelTejada82

            That these shouldn’t get an abatement.

          • Alex Ihnen

            Here’s a real world property tax example. My old home in The Grove is currently assessed at $28,330. I sold it last year for $210,000. Annual property taxes are $2,177. That looks like 7.68%, I guess. My current home in U-CIty has an assessed value of $55,860, and I pay property taxes of $4,865, or 8.71%.

          • MiguelTejada82

            These are ludicrously high for the benefits received

          • matimal

            What ARE the “benefits received” in your view?

          • MiguelTejada82

            Not getting murdered.

          • Alex Ihnen

            Strange – I received the same benefit of not getting murdered when I lived in the City.

          • Alex Ihnen

            Strange – I received the same benefit of not getting murdered when I lived in the City.

          • matimal

            Why do you participate in a forum meant to highlight the development of St. louis?

          • matimal

            What are your property taxes?

    • Adam

      “Rehabbed anyways” over how many years though? The overall state of the neighborhood is unlikely to change if only a couple of homes are renovated each over a 10, 20, 30 year span while others languish. Net occupancy and property value probably wouldn’t change much in such a scenario.

  • John R

    Nice to see. Anything in the works from the Gills? Seems like they have been silent since dropping the plans for mixed-use for the parcel across from UCBC iirc.

  • Ashley

    This is more good news about, and appears to show, a budding residential market in the City! The row homes mentioned on Talmage are beautiful buildings and will definitely benefit from TLC. I’m happy to see development taking place north AND south of Manchester.

    • Michael C.

      Awesome news 🙂

    • matimal

      It’s more than “budding.” St. Louis residential market is larger than that.

  • matimal

    Looks good. Do you think they’d be interested in doing a cable show about their work? Maybe you could be the host, Alex? It would do wonders for St. Louis’ image.