Why St. Louis? CCIM-STL panel illuminates appeal of Gateway to the West

The St. Louis region is in good shape and offers worthwhile opportunities for commercial real estate, according to speakers at a February 13 CCIM-STL meeting at the Meridien Hotel about “Why St. Louis?”

Jim Fredericks, partner in luncheon sponsor Armstrong Teasdale, set the tone for the program by saying, “I believe in St. Louis, and I believe in what we can do for St. Louis.”

Doug Rasmussen, founder and CEO of Steadfast City Economic & Community Partners, noted that his focus on site selection benefits from the interconnections among all 15 St. Louis counties, and that assumptions about the airport are not a big deal: “The lack of an airport hub isn’t that important,” he said. “We have parity in travel prices,” so business travelers have fewer concerns when planning trips.

The St. Louis region can “line up well in risk management,” Rasmussen said. “We can serve the globe from one location. We have diverse options for the supply chain. We have a reliable infrastructure, including weather. We have an industrial heritage and sites that can be redeveloped. We can provide a talent supply chain from the shop floor to the C-suite.”

The region does need more tech workers and residents in general, he noted.

“The challenge for real estate professionals is to think of St. Louis as unique and focus on what’s in our own backyard for all aspects of what a company might need,” Rasmussen said.

For Maggie Kost, chief attraction officer at Greater St. Louis, Inc., promoting St. Louis to potential new businesses is “truly a team sport.”

Her organization primarily focuses on companies in advanced manufacturing (automotive, aerospace, and food and beverage), agtech, bioscience and health, digital transformation, financial and business services, and geospatial. The span of industries and occupations is “an asset for spouses when [a business owner] is relocating here,” she said.

Kost and her team present St. Louis as “a place to start up, stand out, and stay.” St. Louisans “are hard on ourselves, and we shouldn’t be,” she added.

She noted that the metro St. Louis region is ranked as number one in the Mississippi River corridor. “We are putting St. Louis on the global stage,” she said. That’s due to the area’s “transport modal hub, great culture, affordable housing and minimal commutes,” among other qualities.

Commercial real estate professionals would benefit from thinking of Greater St. Louis, Inc. as “a resource and part of your team,” Kost said.

Robert (Bob) Millstone, president and founder of the The Millstone Company, outlined the ways that the Gateway South project, a 100-acre master-planned redevelopment along the riverfront, aims to enhance St. Louis as number one in construction innovation. It will be “a walkable, mixed-use downtown focused on cross-pollination,” Millstone said, at a total estimate cost of $1.2 billion.

Phase 1 is expected to be complete in two years, with work scheduled to begin in March, Millstone said — an impressive goal. It already has $200 million in incentives and $25 million in out-of-town investments, as well as “real local manufacturing companies that will anchor the project.”

Reflecting on the history of the area, “we’re excited about the next 100 years,” Millstone said.

Kost also noted that the St. Louis area’s colleges and universities contribute substantially to the region’s appeal to new and existing businesses and nonprofit organizations as “tremendously important for filling the talent pipeline and innovating.”

Millstone added that “we also have to keep tech training in mind”; not just area universities but also institutions like Rankin Tech and the offerings of the community college system.

Kost agreed: “A lot of people don’t realize there are a lot of community college programs for retraining. It’s all set up to address (business) needs. The community colleges and Rankin understand (what companies need).”

Another key to the region’s future, according to Rasmussen, will be promoting its “cool factor — making it an area that young people want to go to (and stay in). It’s mostly a matter of making (our advantages) known.”

Immigration trends also work in favor of St. Louis, panelists agreed. “It’s very important for us that St. Louis has always been really good at welcoming immigrants,” Kost said, while Rasmussen said that “my lens as a site selector is that St. Louis is not as well-known as we could be (in this respect) — it’s important to make (us) more of a landing place for new Americans.”

The same things that attract new companies and people to the area are a factor in retaining graduates and employees, Kost said.

Millstone identified the role of commercial real estate professionals as creating jobs for the future and convincing potential new businesses and residents that “this is a good place to live, work and play.” Being “ambassadors for the region” is also a vital role for the profession.

“Projects have to integrate with what leaders and the community want,” Millstone added.

That perspective fits with plans for the Greenway project, which Kost called “incredibly important in quality of life and an asset in connectivity and bridging the divide.” It can also be promoted as a tourist attraction, Rasmussen said.

The session wrapped up with perspectives on downtown. “Downtown is incredibly important,” Kost said. “We have locations (that are ideal for) industrial reuse, office space that is very affordable compared to other areas. We’re making sure that we have the tools for redeveloping spaces (so employees will want to come back to offices).”

The answer to “Why St. Louis?” comes down to recognizing that “we’re a region and we live and die as a region,” Millstone said. “St. Louis can be a success, downtown can be a success, but we have to invest.”

Vision for greatness ahead for St. Louis

St. Louis commercial real estate should be headed for great things in 2021, judging by insights provided in “Greater St. Louis and a Vision for Greatness,” a March 9 Retail Spotlight Shift webinar from the St. Louis CCIM chapter.

Tiffany Wiegers, 2021 president of CCIM STL, kicked off the event by thanking sponsors as critical to providing services and resources for the chapter and announcing that scholarships are available for upcoming courses (details are on the CCIM STL website).

Events hosts were Tony Kennedy of Colliers International and Tom Ray of CBRE.

“This is a timely and important discussion about the future of our region,” said Greater St. Louis, Inc. founder and CEO Jason R. Hall, in describing Greater St. Louis Inc. as a combination of five organizations (AllianceSTL, Arch to Park, Civic Progress, Downtown STL, Inc. and the St. Louis Regional Chamber) aiming to reduce historic fragmentation and create one united voice.

“We have to make a decision that we will be a community on the rise or on the decline. We need the same vision, same tenacity, same energy (as in the sports sector) to grow the region.”

“Greater St. Louis brought together eight key growth initiatives from day 1 (January 1, 2021),” Hall said. “It’s all about jobs — retain, attract and create; elevate our regional reputation; and advance common goals. The urban core is essential.”

Among the positive indicators,  St. Louis has seen $8 million in commercial real estate during the pandemic.

“And that has continued to grow. St. Louis can be a global leader in biotech and agtech,” Hall said.

An important example is the 1,400 new jobs coming with Accenture. Other encouraging signs are redevelopment of the Butler Building, which has been one of downtown’s largest vacant buildings, and Green Street Workforce Housing, a partnership for “one of the largest inclusive housing projects in The Grove.

Such place-making projects have a huge impact on bringing business and residential growth to St. Louis.

“We are coming together as a geospatial center of excellence, with a long-term plan in place,” Hall added.

Hall cited entrepreneurship as another incredible force in being re-energized.

“St. Louis is launching new businesses and is first in the country for women-owned businesses,” he said. “We are aggressively back in business.”

Hall quoted Entrepreneur magazine as recently saying that “St. Louis is on the precipice of leading the United States in 21st-century innovation.”

While the St. Louis area hasn’t had a basic jobs plan for more than a decade, “we are now the only metro area to develop one in terms of the pandemic and the new civil rights movement,” Hall said.

“We have to drive inclusive growth. We have got to focus on inclusive growth and close spatial and racial gaps.”

Greater St. Louis is funded by private sector business as investors, and “the business community has to be much more engaged to make (our vision) a reality,” Hall noted.

“We have to make St. Louis better overall and understand the perception of St. Louis in the country. We started STLMade as a way to shine a light on the positive and tell our own story. We will take the story national. It’s a people-centered, data-driven approach.” 

In line with such efforts, the AllianceSTL partnership aims to “accelerate growth by recruiting new jobs and business investments to the 15-county bistate St. Louis region,” according to Chief Business Attraction Officer and president Steven S. Johnson.

“We have an exclusive external focus on business and economic development,” he said. “Our key audiences are site selectors, real estate developers and companies in our main targeted verticals: manufacturing and production; financial and information services; bioscience and health technology; geospatial; agtech; transportation and logistics; and the aerospace, automotive and defense industries.”

Many of those targets are in local commercial real estate because of their current work in location services, Johnson noted.

The Alliance is using social media and related advertising along with traditional advertising to those primary key audiences, along with individual outreach and relationship-building. Marketing is essential — a lesson that St. Louis is learning from cities like Austin, Texas. “Many of the markets we admire have been marketing business attraction for decades.”

Typical projects for the Alliance include “straight-up business development to attract companies and headquarters to St. Louis,” which represents 80% of its focus. Such companies are generally new to the area or have no St. Louis presence yet. Cooperation is vital: “We work with economic development partners; we can do nothing by ourselves,” Johnson said.  “Our relationships and partnerships are as strong now as ever, and that is good for St. Louis.”

To build on those connections, “we ask businesses exactly what they’re look for.” The answer is usually “talent availability and sourcing, business continuity, and the cost of labor. “We are finding that location is as much about mitigating risk as anything else,” Johnson said.

Agriculture technology is another important business sector for St. Louis, thanks to its central location and accessibility to a huge resource of agricultural producers, according to Thad Simons, founder and managing director of The Yield and The Yield Lab Institute, a “cooperative network of venture funds to advance food and agriculture technology globally,” with companies in Ireland, Argentina, Brazil, Chile, Singapore, France and Luxembourg.  The lab is the company’s nonprofit arm.

When he came to St. Louis in 2014 for a three-year assignment with Monsanto, “I was curious about the agtech space,” Simons recalled. “I realized the difficulty of getting projects off the ground. Part of the problem was understanding what ‘agtech’ means.”

With agriculture as one of the largest elements of the geospatial sector, the advantage for St. Louis is that it is “right in the center of agricultural production and distribution. The strength we bring is less the money that the connections,” Simons said. “The impact of the agriculture sector on St. Louis is tremendous.”

While many large organizations already have a local presence — the largest associations for farmers are all based in St. Louis, “we mentor smaller companies to come to St. Louis.” There is still a need to “find champions of St. Louis and stay in touch with them,” Simons said. He is encouraged by the expectation that “there will be lots of stories of companies coming here through word of mouth.”

Simons sees St. Louis as a “really hot space” that is “fostering research and technology.” Of the company’s 50 global projects, 12 are in St. Louis. Driving new investment and presence in the area are projects and innovations that go beyond traditional uses of agricultural products, such as a commercially viable indoor farm and “a small-scale project along Delmar to address food deserts” (the absence of grocery stores). “It’s intended to be for-profit, so we will sell products to restaurants, but also donate to the community,” he said.

Now getting started in St. Louis is a NASA Challenge to investigate “how growing food in space can relate to growing food on Earth,” Simons added.

While Simons is optimistic about business growth, he sees a need for expanded investment. “St. Louis is strong and getting stronger in human capital, but still not where we should be in financial capital,” he said. 

The hemp industry offers the prospect of growth as an alternative protein and in oils and nutrition, once regulation and legality are in place.

Looking ahead

For St. Louis business and commercial real estate to succeed, it is crucial “to be thinking five, 10, 20 years ahead to create self-perpetuating environment in geospatial and build up an innovation ecosystem,” said Hall. “That will give St. Louis a durable advantage.”

Asked about the impact of a new mayor on commercial real estate and business, Hall said the upcoming mayoral election is a “generational change; both candidates are speaking about growth  and the need for inclusional growth. It’s an exciting time for St. Louis. Magic happens when we have public and private alignment. There will be exciting opportunities to work together.”

“We seem to have two candidates who will be very hands-on and pro-development. We will work with everybody,” Johnson said.

“Whoever becomes mayor will have to realize that there is an urban-rural divide, and a need for much better understanding between those segments of the region,” Simons said.

A recording of the event is available at https://www.linkedin.com/company/ccim-st-louis-metro-chapter/ or

https://www.youtube.com/channel/UCO2uJM-RnLRetiKTNvYAUVA.

$40 million affordable housing project heads to Central City

Building on continued momentum in St. Louis’ Central City, a groundbreaking new housing project will bring attainable housing through over 160 new units - over 80 of which will be workforce-targeted rents - to the Central City’s Forest Park Southeast neighborhood.

Union At The Grove, a $40 million multifamily development, is comprised of six individual buildings on Hunt, Vista and Norfolk Avenues, between Newstead and Taylor Avenues, just east of Kingshighway.

Green Street St. Louis developed the project with support from a consortium that includes Greater St. Louis, Inc., IFF, and Washington University Medical Center Redevelopment Corp. (WUMCRC), a partnership between BJC Healthcare and Washington University School of Medicine in St. Louis.

“As we focus on inclusive economic growth for our region, the project sends a strong signal about what is being done to begin a resurgence in the Central City in St. Louis,” said Valerie E. Patton, Chief Diversity, Equity and Inclusion Officer for Greater St. Louis, Inc. and president of the Greater St. Louis Foundation.

In addition to Union, recent developments highlighting the resurgence in the Central City include the first fully protected bike and pedestrian infrastructure in the city that will connect the Tower Grove Park and the Shaw neighborhood to Forest Park Southeast and Cortex; continued significant development taking place in and around Cortex itself; the construction of the new NGA West headquarters, projected to open in 2025; and additional hundreds of millions of dollars of new and adaptive re-use real estate development underway in the City. As has been reported in recent years, more than $8 billion in development is underway, planned or has been recently completed in the City.

“Union At The Grove is a natural extension of Green Street’s continued commitment to the City of St. Louis and Midtown redevelopment through partnership and community revitalization,” said Joel Oliver, Green Street senior vice president for development.

Developing new workforce housing is critical to inclusive growth, and approximately 52 percent of the Union’s units will have attainable rents so that health care employees and medical school staff can live near where they work. The units with attainable rates will be blended throughout each of Union’s six unique buildings.

Amenities include private entrances, courtyards and walking paths; shared rooftop terraces, balconies, and barbecue areas; and bike storage, mail, and secure package areas. The properties are walking distance from Forest Park, Tower Grove Park, Cortex and the Washington University Medical Campus.

“Social, environmental and economic inequities are recognized as major contributors to health disparities,” says Richard Liekweg, BJC HealthCare president and CEO.

“This project demonstrates that health care organizations can play a part in strengthening our neighborhoods and communities. Having new, attractive and attainable housing adjacent to our academic campus where some 20,000 employees work will facilitate access to jobs, while also strengthening communities,” Liekweg said.

Beginning in 1996, WUMCRC has purchased properties in the neighborhood with the long-term goal of attracting developers with strong records in redeveloping and supporting mixed-income, diverse communities. Union At The Grove is the final segment of this effort to improve the quality of life for residents in neighborhoods that border the Medical Campus. WUMCRC also has supported neighborhood investments in safety, jobs, education and the development of The Grove, the entertainment and commercial district along Manchester Road.

“In recent years the market has done a great job supplying high quality market rate and we have been able to find resources to build and maintain low-income housing units in the neighborhood. This project fills in the missing middle – those who earn too much to qualify for subsidized housing and too little to afford market housing,” said Hank Webber, Washington University’s executive vice chancellor and chair of the WUMCRC board.

Construction is slated to start February 1, 2020 with an official groundbreaking ceremony targeted for spring of this year. The project did not make use of federal or state tax credits or incentives and is applying all funds from the 10-year tax abatement it received into the newly formed Newstead West Community Improvement District for the purpose of making infrastructure improvements that would otherwise not be completed. These improvements include:

• Resurfacing of streets and alleys

• Rebuilding sidewalks and curbs

• Installing new streetlights

• Helping heal the City’s grid by reopening the cul-de-sacs on Vista and Norfolk at Taylor

“This development checks a couple of important boxes for our community. It adds density to support our efforts for more environmentally sustainable development and less car dependency. It also has a workforce housing component to assure our neighborhoods remain economically diverse. Both are core values of the 17th Ward,” said 17th Ward Alderman Joe Roddy.

Development of Union is being led by Green Street, which has advanced approximately $100 million worth of other projects in the Forest Park Southeast neighborhood. Green Street Building Group is managing project construction with said construction financing provided by Colliers International, arranged by Kyle Howerton of George Smith Partners.

IFF provided Newstead West Community Improvement District a bridge loan to provide upfront funding for infrastructure improvements that would have otherwise been available spread out over a decade.

CentralCitySTL is an initiative of the newly formed economic development organization Greater St. Louis, Inc. that combines the work of Arch to Park and Design Downtown STL. The Arch to Park Equity Fund made a patient capital investment to help make this major development possible.