Railway Exchange Redevelopment Close to Reality

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At its November 21 meeting, the city’s Industrial Development Authority will consider issuing $160 million in Housing Revenue Bonds to help finance redevelopment of the vacant Railway Exchange Building downtown. Total renovation costs are expected to top $250 million. Hudson Holdings purchased the property early this year for $20.5 million. Plans for the building include a large residential component with The addition of retail and office space. Early projections put the number of apartments at 600. Founded in 2006, Hudson Holdings has taken on several large projects, including redevelopment of Cincinnati’s Textile Building, Cleveland’s Union Trust (Huntington) Building, Louisville’s Starks Building and Kansas City’s Mark Twain Building.

The Railway Exchange Building was built in 1914 to a design by architects Mauran, Russell & Crowell. The Chicago School tower was the city’s largest and tallest when completed and today remains the second largest building downtown at 1.2 million square feet. The Railway Exchange was the long-time headquarters of May Department Stores Company before May was bought out by Federated Department Stores in 2005 and subsumed into Macy’s the following year. The building is best known as home to the flagship location of department store Famous-Barr. Converted to a Macy’s in 2006, the chain closed the downtown store in 2013.

Local governments sell Housing Revenue Bonds when a developer plans to set aside 40% of residential units for moderate- to low-income renters. In this case, the city’s Industrial Development Authority will sell the bonds. Hudson Holdings received a $19.3 million bridge loan in March from Gamma Real Estate to fund pre-construction activity. Last year Hudson Partner Avi Greenbaum told NextStl that the project would not be possible without the availability of historic tax credits.

The clock may be ticking on the state and federal historic tax credit programs. Combined, they can cover up to 45% of eligible redevelopment costs. The United States Senate has proposed cutting the federal credit from 20 to 10 percent, while the US House has proposed ending the program altogether. Missouri’s historic tax credit program also is threatened, with Governor Greitens seeking major changes to the program. Between 2002 and 2015, historic tax credits have enabled more than $3.2 billion in development in St. Louis City alone. St. Louis has led the nation in benefiting from the program.

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  • Presbyterian
  • Pingback: Railway Exchange Redevelopment Close to Reality - ConstructForSTL()

  • Rusty

    More section 8 downtown, great

    • Presbyterian

      This won’t be section 8. The Housing Revenue Bonds require that 40% of units lease to residents who make 60% or less the region’s Average Median Income (AMI). The AMI in the St. Louis area is $74,500. That means that 40% of the renters in this buiding will have to make less than $44,700 a year. Typically, that means younger professionals.

      • Justin

        Most younger professionals earn too much to qualify. I’ve looked into these in the past and the income limit is around $30k/year.

      • Rusty

        The CBS is turning into a big public housing project, check out culinaria on the 1st of the month, most using EBT, and they aren’t people who live in wash ave lofts or work in the few still functioning downtown office towers.

        • Matthew W. Hall

          What’s the CBS?

          • Rusty

            Cbd

          • Matthew W. Hall

            Oh…they come from the north where retail choices are very limited. They don’t live there. They don’t have cars and they can get to downtown. They aren’t moving in.

          • Rusty

            They come from across the street, the Mark Twain Hotel or the Paul Brown (which is subsidized housing).

          • Matthew W. Hall

            All of them?

  • John

    It seems to me that as of late there are a lot of stories that have been released which state that apartments/condos/office spaces are being built all throughout the city. I grew up in STL County and don’t remember that much construction going on in the city at all back when I was a kid, and now the construction seems to be booming down there (which I think is great for the area I might add). Is there some sort of renaissance happening in the city right now? Does it seem likely that there exists a demand for all of these apartments/condos/office spaces?

    • Presbyterian

      After decline in the 1990s, Downtown’s renaissance began around 2000, first along Washington Avenue. I believe there are about $2 billion in projects happening right now. While the condo market has remained soft, large residential apartment projects like the renovated Arcade Building have leased very quickly.

      • John

        That makes sense. While a lot of locals still seem to have a lot of harsh criticism to note about downtown, I personally think that it’s coming together and, to your point, with all of the projects and investment going on, I see no reason why it can’t be a very busy and exciting place to be in a few years when a lot of those initiatives are finished up. Hopefully STL City can move forward to have similar success as towns like Indy, KC, and Nashville. I like STL more than all of those cities, but I think they’re getting a bit more attention than us on a national scale as entertainment/business centers.

        • jhoff1257

          I live in KC, it’s not a business center in the least. St. Louis is still a strong corporate center with 9 Fortune 500’s and 19 Fortune 1000s. KC has one Fortune 500 that employs fewer then 250 people locally and less then 8 Fortune 1000s.

          Take the experience I had today traveling between the two cities. I flew…KCI is dark, drab, cramped, and desolate (there were literally 7 people in the checkpoint line). I land in St. Louis (in a newly reopened section of the D Concourse no less) and it looked like the old TWA days. Bright, open, airy and, most importantly, jam packed with travelers.

          I don’t know of any other city besides STL where the locals are so down on their town and themselves. This place is awesome, it’s unfortunate that I had to leave to figure that out, but it’s true. I’d give anything to move back. Kansas City would kill to have the development STL is seeing in dozens of different neighborhoods. In KC it’s Downtown and Westport. That’s it. Anything else is being built in the suburbs. The only thing that city has going for it is good national press and slightly better population growth.

          • John

            Yea I agree with you on many of those points. I lived in San Francisco and Chicago for quite a while and I think that STL does indeed have a lot going for it, many big city amenities for a fraction of the cost. And, don’t get me wrong, I love STL. I think the county has experienced a lot of success as of late, and I’m just hoping to see downtown, and the city in general, look great in the way of commerce and entertainment too. And, to be an optimist here, I think that we’re headed in the right direction. I think with the Arch Grounds Project, so much building renovation going on down there, more jobs for the tech start up scene, the city could be a really awesome place in a few years. I’d go so far as to say that many of the buildings downtown look better than the ones in Chicago, they just need more tenants to fill them but, again, it seems that more people and businesses are moving down there as of late…I have no evidence to support that claim other than driving down there for work on a weekly basis and seeing what’s going on there.

          • STLrainbow

            Downtown is making some progress but it is difficult to get into that next gear (like most others have reached) without a greater increase in jobs. Especially with the Cortex and BJC/WashU area jobs increase feeding development west of Grand, it’s hard to get to the level of demand downtown that will move it beyond slow and steady to really hot. BPV should change some perceptions, so we’ll see if there is any kind of jobs attraction resulting from it.

          • D-Man

            Clarity for everyone… There is a local lingo in the West County that downtown is everything east of 170 and in realty the boundry for downtown is Jefferson street in St Louis City. East of Jefferson is Downtown and downtown West. Going west from there in the city of St Louis is Midtown, the Central West End/Forest Park Southeast, Dog Town, Forest Park, SkinnyD(Debalivare) neighborhoods and then Wash U. I think when we are saying downtown we are talking about THIS definition of downtown not just the city of St Louis as a whole. RIght!?

          • Daniel Schmidt

            I have heard this many times as well. I’ve even heard some express that “everything inside 270 is a murderous hell-hole”. I don’t think these folks know much about anything east of 141.

          • jhoff1257

            Agree with everything here except this: “…the city could be a really awesome place…” It already is. It’s got some rough edges and some areas have a ways to go, but in many ways the city already exceeds what nearly every other Midwestern city (Chicago excluded) is trying to do…create walkable neighborhoods, a sense of place, and a nice urban form. St. Louis feels like a real city and to me that’s worth way more then being included on a few nice listicles in Buzzfeed or wherever.

          • John

            Yes, I agree, so many cool areas of downtown. I should’ve clarified, by “really awesome place”…with that line I meant there would be less vacancy and more people walking around due to more jobs being located in downtown. In some parts of the fringes of downtown there are almost whole blocks without any businesses, small or corporate stationed, there. It certainly has the form and infrastructure to be a nice big sprawling city (by Midwestern standards anyway), but it seems to me that we need more jobs down there and perhaps more places to live (perhaps I’m stating the obvious)…it seems that a lot of developers are already getting started on that second piece of adding more apartments, perhaps due to the fact that the AT&T Building and the BPV Phase 2 Office Building might bring in a few hundred (if not thousands) of jobs to the area, with naturally some young people who’d want to live nearby. Hopefully when those two buildings start hiring, they add to the region net new jobs as opposed to “share shifting” from other offices in downtown.

          • jhoff1257

            Oh, I didn’t know you were just talking about Downtown. I was talking about the whole city. Downtown is a very small part of that.

          • John

            Yea my bad I should’ve been clearer. I’m of the mindset that if a downtown is thriving for an area in the way of commerce and entertainment, while it’s not the silver bullet to making the rest of the city successful, it can certainly help add some vitality to the area. The infrastructure for downtown looks great and the upcoming project renderings as well, I’m just hoping to see a population influx…it will happen I’m assuming with all of the investment but we’ll see I guess.

          • D-Man

            Dude. I didnt read your comment before I wrote mine but RIGHT ON! man. I don’t understand the self-loathing that people from St Louis have about their city. It’s so sad. No, its not a top 10 market. But you don’t have to be to be an awesome place and more and more…people like me that are from NYC or even LA or SF come to St Louis and go OMG! This place is killing it with food and (ACCESSIBLE) entertainment. But it seems that no one here really gets it.(?) Everyone is looking at what everyone else has and comparing themselves to places that are nice but a lot less significant than their own. This is an amazing city on the rise. These apartments, hotels and condos are largely being built by outside firms….that means others are getting in on the deal before the locals. I know that there is this hypersensitivity to racial issues and crime. And let me tell you as a Manhattanite, you dont got exaggerated race issues (that belongs to BOSTON) and this is DAMN SURE not the most dangerous city to live in there are many cities in front of you for that…but you as a people do believe all the hype about yourselves and that leads people to get even more down on their city. Take it from someone from the outside…there is a lot here to be proud of. Quit living in the past….25 years ago shit. You’ve changed! Embrace that. Love yourself and others will love you, too. The funny thing is we already love St Louis…we are just waiting for the locals to love it, with us.

          • Nick

            Amen…I think people take our national reputation way too seriously around here…and it has definitely morphed itself into a regional inferiority complex. I know of no other city where it is more socially fashionable to dog ourselves. I think at the end of the day too many people read/watch the news and are afraid to explore the city as much as they would otherwise… and this is a shame because I truly believe there is a large contingent of folks living in one of the counties who long for city living but are afraid to take the plunge.

          • Daniel Schmidt

            You are so right on all those points. I can’t count the number of times friends have come to the City from the ex-urbs for visits and commented how much they like it, but as you point out, they are too afraid to even visit more often because of “read/watch the news and are afraid to explore the city”, let alone consider becoming a St. Louisan.

          • studs

            The “inferiority complex” of St. Louis goes back 150 years, including the period of its purported peak of status and grandeur, the 1904 Louisiana Purchase Exposition. A book with the telling title, “St. Louis, Future Great City Of The World” was published shortly after the Civil War. It extolled the city’s economic climate, strategic location, educational resources, burgeoning culture, grand residences, and coolly predicted that it was destined to join the ranks of New York, London and Paris in significance. It is an arbitrary beginning point, but it seems that there has been, at least from this time, an abstract idea of St. Louis, what it could/should/ought to be, with such an incredibly grandiose outline that whatever its trajectory, it would be doomed to fall short. This perspective did not allow us to simply take satisfaction in what the city is, what admirable features it actually has, since boosters of yore started a lofty Greek chorus of always imagining it greater, grander, larger, richer, whatever. A number of other things didn’t help: drawing the boundary at 61 +/- square miles does not seem to bespeak a city with global cosmopolitan ambition. In the decades just before and up to the 1904 “peak”, St. Louis was inevitably criticized as a provincial place with rampant corruption, labor injustice, filthy streets, and abominably sooty air. Muckrakers of the era loved to hate on St. Louis. Local writer William Marion Reedy, perhaps to St. Louis what H.L. Mencken was to Baltimore, often joined in the chorus of criticism, saying circa 1907 essentially that the city lacked visionaries, articulate goals, was a cow town that didn’t really know how to be a true and sophisticated city. Sound familiar? A key to understanding the historic character of St. Louis can be found in the fascinating development story of Forest Park, which coincided with the Great Divorce in 1876 and the approximate time that Chicago finally became CHICAGO. Hiram Leffingwell originally envisioned a park of 3,000 acres, more than twice what it wound up being, with a stated civic objective of putting New York’s Central Park and those of other cities decisively in the shade, a la “Future Great”. It seems paradoxical with such aggressive vision to simultaneously crimp the city at a measly 61 square miles. I always thought Reedy had a point, but with a revision: St. Louis did not lack visionaries. They just had a hard time being heard. Boosters called for the grandest of plans, but amid the heady prognostications, too often shortsighted interests seemed to carry the day.

  • Jakeb

    My fingers are crossed on this one. This a very large building and I’ve been concerned that its size would be fatal.

    • jhoff1257

      Yeah it’s huge. But I’m not sure that’s the biggest worry anymore. I think it’s more then likely that dumb-ass in Jefferson City will end the state historic tax credit program and my guess is the federal program is pretty much toast. If the Republicans I grew up around in the County are any indication, that program is dead. These guys don’t give a single shit about old and historic buildings nor do they care about making inner city neighborhoods better places.

      • Precocious P

        With respect to the state HTCs, there’s a good chance the cap will be reduced. If there’s a silver lining to the federal historic tax credit threat it’s that there has been a major push by advocates to encourage the smaller towns across the country to share their stories about how the historic tax credit program was absolutely necessary in revitalizing their communities. Senators and Reps (both at the state and federal level) have been listening. Especially when you frame it as a job creator that helps main street. It also doesn’t hurt that you have Ronald Reagan on video claiming that the historic tax credit program makes “good economic sense”.

        On the federal side, looks for the Cassidy amendment to be added to the next mark up of the senate bill. It restores the federal credit back to 20% however instead of being earned in one year the credits will be earned in 5 (4% each year). It’s not perfect but it’s a step in the right direction.

  • Dominic Ricciotti

    I just want to say how valuable it is that older, related articles are now being added to the stories NextSTL covers. Very helpful.