The new Chelsea apartment building at 5539 Pershing in the DeBaliviere Place neighborhood is nearing completion. It is the latest from Lux Living. Chelsea replaced a shuttered pool and tennis courts which was turned into temporary parking while Tribeca was being built across Pershing. Chelsea has 152 apartments over five floors on top of two levels of parking. The contractor is Big Sur Construction, and the architect is VE Design Group.
NextSTL coverage of the Lux Living developments in DeBaliviere Place-
NextSTL – 2014 – The High Cost of Parking on Pershing
NextSTL – 2015 – New Apartment Building Slated for DeBaliviere Place Neighborhood
NextSTL – 2015 – New Apartment Building Proposed for Pershing Avenue Surface Parking Lot
NextSTL – 2018 – Revised Plans for Debaliviere Place Construction Moving Forward
NextSTL – 2018 – City’s First Hi-tech Smart Apartments [Tribeca] to Open April 1
NextSTL – 2019 – Chelsea Luxury Living to Break Ground in DeBaliviere Place
Chelsea is loaded up with amenities and technology. The units on the top floor have even more high-end features. Tenants use a smart phone app to enter the building, amenity spaces, and their apartment. Apartments have built-in speakers, WIFI, Alexa, and Nest thermostats. The app will tell them the things they can do in each amenity, like how to watch Netflix in the spa. They can even buy a beer with it in the game room. There’s a café in the lobby and a little convenience store in the mailroom. It’s reminiscent of a cruise ship or resort.
The upscale features have proven to be popular. After the success of Tribeca, they upped the amenities and tech yet again at Chelsea. Rents start at $1,000 for a studio, $1,300 for a one bedroom, and $1,700 for a two bedroom. Leasing has gone well. Tenants started moving in last November despite many common spaces yet to be finished. They are 90% leased now and will be 100% this summer. It seems Covid has not negatively impacted demand for this type of living.
Down the street at DeBaliviere their third new construction building in DeBaliviere Place, Hudson, is underway and expected to top out within a month. They plan to up the features again there, bringing more smart home features to multi-family rental domiciles.
Lux Living’s progenitor City Wide Apartments started acquiring and renovating buildings in the area around 2012. With momentum building, the high density supporting a variety of price points, the proximity to Forest Park, and location in between Washington University and the Central West End, indicated new construction luxury housing could be successful. They started with Tribeca and Steelyard (in Soulard). SoHo in Soulard, with 320 apartments, is underway too. They are just getting started on a 252-unit building at Delcrest Plaza in University City.
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Construction was complex and messy (at Hudson too). Building to lot lines meant little space to maneuver (I saw a large-capacity forklift knock over a section of fence when trying to turn in from the street onto the property). Closed sidewalks, an epitome of construction in St. Louis, was annoying, as well as temporary street closures. The security of the fencing wasn’t the best, especially tenuous early on during excavation for the underground parking. Much of the buildings were prefabbed offsite and assembled onsite. At Chelsea construction went over budget as materials costs rose (especially lumber).
Some unions, like the Local 513 of the Int’l Union of Operating Engineers and Bricklayers Local 1 of Missouri, have been picketing Lux Living/Big Sur’s construction sites for not paying prevailing wages or not using union labor. Victor Alston, who heads Lux Living, said they are neither 100% union nor 100% non-union. For some parts like concrete or steel work union labor is a must. But sometimes the unions cannot provide labor when needed, so they utilize non-union and/or non-local labor.
Another point of contention has been tax abatements. Tribeca got a 100% property tax abatement for 20 years (BB161 2015-16 session). It leased up quickly and was sold. Chelsea received an 85% abatement for 10 years (BB221 2018-19 session). It also received sales tax exemption on construction materials. For Hudson the Board of Alderman passed an 80% abatement for 10 years (BB48 2020-21 session), and sales tax exemption on construction materials was approved by the LCRA board, but the LCRA board has not designated them as developer, so the tax abatement is not in effect. Construction has proceeded nonetheless.
Given the success and opulence of these properties, it seems smaller or no tax incentives is in order. Mr. Alston says we shouldn’t cut them off quite so fast. St. Louis doesn’t have the development strength that he sees in other cities. Not every, but some developments are going to need tax incentives due to high costs associated with high density developments. He points out that they make a pro forma stronger which helps get investors on board which makes the projects happen. Financing has gotten easier with each project.
Mr. Alston also points out that tax incentives help pay for expensive structured parking. We’ve discussed this often on NextSTL. Car owners are unwilling to pay all the costs of structured parking, thus the cost is a part of the case to receive tax incentives. At least the incentives end someday, whereas for surface parking costs borne by the community come from the spreading out of places, most notably in the extra infrastructure it takes to serve such places. While not on the pro forma for a development, the subsidy is there as the surface parking is low-productivity thus not covering the costs of the infrastructure serving it. Worse the community promises to provide the infrastructure in perpetuity. At Chelsea parking is included in the rent, so car-free tenants subsidize those with cars.
Nextstl – Is Subsidizing Structured Parking Worth It?
A third option is less parking. Mr. Alston says he’d prefer a 0.8-0.9 parking ratio of spaces to dwelling units, while the city mandates 1.0, which the city hasn’t been flexible on. For a project in Kansas City, they actually suggested to him a 0.65 ratio at a development near the KC Streetcar line. The draft of a form based code for Delmar and DeBaliviere (Delmar DeBaliviere Form Based District) would have no off-street parking mandates.
The parking issue led to another controversy. A reconstituted Commercial DeBaliviere Place Association, with Mr. Alston as president and head of Big Sur Construction Sid Chakraverty as treasurer, is suing the developers of Expo at Forest Park (across DeBaliviere from Hudson) over parking and its TIF. Mr. Alston says they applied for a TIF in which the amount of parking provided was in part justification for the TIF, then reduced the amount of parking afterwards, and that should have resulted in another review. Indeed the Expo TIF application says there would be approximately 440 spaces, and the reportage in the Post Dispatch linked below says there would be 361 spaces. It remains to be seen what comes of it.
Stltoday – July 20, 2020 – $92 million development near Forest Park Metrolink station hits roadblock as competitor pushes for parking
Stltoday – Oct 27, 2020 – Development near Forest Park-DeBaliviere MetroLink station advances
Kyle Hennessey of Lux Living gave me a tour of Chelsea. Let’s have a look.
