CREW St. Louis recently hosted a panel of local leaders who are actively involved in the transformation of downtown St. Louis into a center for innovation and growth for software technology companies and other entrepreneurial ventures.
Patricia Hagen, Ph.D., president and executive director of T-REX, John Warren, director at Cushman & Wakefield and Brian Matthews, co-founder and general partner with Cultivation Capital, joined moderator John Berglund, co-founder and managing partner at The StarWood Group, for the live webinar presentation.
Berglund began with a video tour of The Starwood Group’s property located at 900 N. Tucker Boulevard, which formerly housed the St. Louis Post-Dispatch. StarWood acquired the property in 2018 and began renovations in 2019 in preparation for their efforts to bring more jobs to downtown St. Louis.
Today Square, Inc., a financial services/merchant services aggregator and mobile payment company, has leased approximately 80% of the building. Berglund said Square expects to take full occupancy in March 2021, moving its employees from the Cortex Innovation Community.
Berglund said that the 900 N. Tucker Blvd. project is the start of the creation of the NOW Innovation District planned for the North Washington Ave. area and expects that it will take up to twenty years to complete.
The Starwood Group has hired Labyrinth Technologies to install lighting up and down Tucker Blvd. and around its building.
“We think that will be the start of kicking off this innovation district, both demarking the edges of it and having that technology piece. We’re hoping that spurs on additional people to do the same,” said Berglund.
Berglund’s innovation district will join T-REX, which he calls the “cornerstone” of the downtown innovation district. T-REX is a non-profit organization, founded in 2011 by the economic development leadership of St. Louis. Located at 911 Washington Ave., T-REX houses more than 200 start-ups as well as a few anchor tenants.
“The start-up companies don’t take on a lot of risk when they move in here. We see that as part of our mission to support them as much as we can. We take on that risk so they are on month-to-month leases; their rents are low; we offer amenities to them at no cost, or at very low cost. The anchor tenants help to support the sustainability of our organization. Those are the tenants that are on 3 to 5 year leases,” said Hagen.
Hagen said that renovation at T-REX began with the creation of an innovation conference center on the fifth floor which facilitated creating relationships with non-profits, governmental agencies and commercial and start-up organizations throughout St. Louis.
When the National Geospatial-Intelligence Agency (NGA) announced its decision to build a new campus less than a mile and a half from T-REX, T-REX made its facilities available to the NGA.
NGA now is the largest client of the innovation conference center and has offices at T-REX.
One of the most recent renovations at T-REX is the Geospatial Innovation Center named Geosaurus.
“There are resources for start-up companies, innovators and researchers to use in order to further geospatial innovation going into the future,” Hagen said.
With St. Louis becoming a hub for geospatial activity, Hagen hopes that the 900 N. Tucker building and other buildings near T-REX will benefit from the attraction of St. Louis to geospatial companies.
“It’s not just defense related. Geotechnology is used in almost every company now. So it really is a play for St. Louis and for the region to support St. Louis being seen as really the place where you want to do geospatial work,” said Hagen.
Hagen said that more than 5,000 jobs have been created as a result of its partners’ activities within T-REX and the support that T-REX offers start-ups and new anchor tenants that are doing expansion in St. Louis, like Leidos, one of the most recent T-REX anchor tenants.
One of the partners located within T-REX include Cultivation Capital, started in 2012. According to Matthews, Cultivation Capital manages more than $200 million. Matthews estimates that approximately 97% of money Cultivation Capital has raised is from St. Louis citizens.
“When you read about ecosystems and the formation of them, which is what we’re trying to do with the NOW Innovation District and with T-REX, it’s about talent, it’s about capital and it’s about community - and you want to have like-minded people working together within the same area,” said Matthews.
Cultivation Capital has invested in 105 companies, 75 of which are located in St. Louis. Matthews noted that there are 3,000 employees in the portfolio, of which approximately 2,000 of them now work in St. Louis. Many of them are graduates of Washington University, St. Louis University, University of Illinois and Missouri University of Science and Technology.
“Capital is just really important for keeping the talent that is going through our great universities here in St. Louis,” Matthews said.
Matthews chose to be in T-REX to be near the entrepreneurs in which his company might invest.
“We can get a better sense of which ones are the hardest working, which ones seem to have more traction, become friendly with them,” he said.
“There’s going to be a great transformation over the next decade in software tech due to these investments we’re making downtown. It’s my hope that as we create these software companies, we’re going to be creating demand for campuses,” Matthews said.
Warren discussed the downtown market, noting that the overall vacancy rate is 19.3%, the highest in the region’s submarkets. Year to date, the overall absorption for downtown is positive. There currently is no new space under construction.
Going forward, “[t]he purpose of the office will be to provide inspiring destinations that strengthen cultural connections, learning, bonding with customers and colleagues and supports innovation. I think we’re seeing that with spaces like what Square is doing downtown. Truly interesting and exciting spaces to work and have an interesting environment,” Warren said.