BUSINESS JOURNAL

Fewer people paid April rent. Here's how Missouri and Illinois fared.

Nearly a third of U.S. apartment renters didn’t pay any of their April rent during the first week of the month

ST. LOUIS — A higher percentage of Missouri and Illinois renters are paying April rents than the national average, landlords and data firms said.

Steve Young, president and CFO of St. Louis-based Deca Realty Co., which manages homes and 1,500 apartment units, said more than 75% of his tenants have paid rent for the month of April, and he's expecting that number to rise to 90%.

In Metro East, Gateway Multifamily, which owns and manages around 362 apartments, has about 15% of rents outstanding or deferred via a payment plan, said Principal Raj Tut.

"We communicated to residents right away that we would not be pursuing evictions and would be waiving late fees if they can show us proof of COVID-19 impacting their ability to pay rent. We came up with payment plans for April rent for those who were impacted," Tut said.

Nearly a third of U.S. apartment renters didn’t pay any of their April rent during the first week of the month, according to data from the National Multifamily Housing Council, a landlord trade group. Jeffrey Adler, a vice president at real estate software firm Matrix, which contributed to the data, said the number was off about 12% from “a normal month.”

After adjusting for factors including office closures, he said the impact was likely in the “high single digits.”

“There is some slower payment of rent, but not yet a critical problem, at least not yet, nationally,” Adler said.

Entrata, which offers software for apartment communities, said initial numbers for April rent payments were “encouraging.”

Using data from its multifamily clients, Entrata calculated that through the first week of the month, 83% of occupied units made their April rent payment. In Missouri, the number was 87%, and 88% in Illinois, it said.

The company said one factor in strong April numbers may be the willingness of property owners to eat the cost of convenience fees for residents who pay rent via automated clearing house (up 4%) or credit cards (up 7%). At the same time, apartment communities have charged far fewer late fees, according to the analysis. Entrata reported $2.9 million in late fees this month, versus more than $5 million for April 2019. Late fees waived increased 56%.

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BUSINESS JOURNAL

Construction on Cortex's classified office building could begin later this year

If all goes to plan, construction on the Cortex SCIF building could begin later this year, with it expected to open to tenants in early 2024.

ST. LOUIS — Plans are still on track to build a secure facility at the Cortex Innovation District aimed at attracting geospatial companies conducting classified business, officials involved with the project said. The project was announced last fall.

The dedicated SCIF (sensitive compartmented information facility) office building, planned at the corner of Forest Park Avenue and South Sarah Street, is a project of Virginia-based developer Westway Services Group LLC. Westway also owns the first SCIF space built in St. Louis, an entire floor at the Globe Building downtown. That project is scheduled to open by September.

Cortex and Westway are actively working on plans for the 120,000-square-foot new Cortex building, said Cortex President and CEO Sam Fiorello. Westway plans to focus on the classified space at Cortex after the SCIF space at the Globe Building opens, a process that was delayed by supply chain issues, Fiorello said.

If all goes to plan, construction on the Cortex SCIF building could begin later this year, with it expected to open to tenants in early 2024, Fiorello said.

Unlike the SCIF project at the Globe Building, which is converting part of a historic building to secure space, the Cortex SCIF will be ground-up construction. Westway is "working on securing the land right now," Westway CEO Jack Pryor said. Cortex owns the property where the project will be built, but the property is not yet under contract, Fiorello said. Financial terms and development costs were not disclosed.

The entire new Cortex building will be a SCIF, where tenants can lease offices based on their needs. Parking also will be secure, and no foreign nationals will be able to work in the building, per federal government guidelines.

BUSINESS JOURNAL

Former AT&T tower's nomination for historic status could pave the way for tax credits, redevelopment

The St. Louis Preservation Board will consider Monday whether to recommend nominating the 46-story building to the National Register of Historic Places.

ST. LOUIS — State and local officials could pave the way for historic tax credits to help fund the redevelopment of the state’s largest office building, the former AT&T tower in downtown St. Louis, if a bid to place it on the National Register of Historic Places is successful.

The St. Louis Preservation Board will consider Monday whether to recommend nominating the 46-story building at 909 Chestnut St. to the National Register of Historic Places. The request came from the Missouri State Historic Preservation Office, city officials said. The building, also known as One Bell Center, was built in 1985 and designed by St. Louis-based architectural firm HOK.

Buildings less than 50 years old typically aren’t considered for the National Register, according to the official criteria. But a younger property could be listed if it is “of exceptional importance,” according to the guidelines.

Gaining historic status for the tower would allow the building’s new owner, New York developer SomeraRoad, to apply for state and federal historic tax credits as a tool to fund the costly redevelopment of the massive 1.4 million-square-foot building, which the firm bought from bondholders April 25 for $4.05 million, a fraction of the building’s previous 2006 sale price of $204.5 million.

Before SomeraRoad purchased the tower, a series of other buyers had walked away from contracts to buy it. Developers who looked into buying the building told the Business Journal last year that the building was a challenge to redevelop because of its massive size and lack of parking, which would make the cost of overhauling the building much higher than the low initial price tag.

Other vacant buildings in downtown St. Louis that are targeted for redevelopment are already listed on the National Register of Historic Places, including the Butler Brothers building, the Railway Exchange and Jefferson Arms.

Rosin Preservation LLC, a historic preservation consulting firm in Kansas City, wrote in a nomination form that One Bell Center meets historic guidelines because its principal designer, HOK co-founder Gyo Obata, who died in March, designed the tower as a “precedent in innovative ways, creating a design that clearly related to the context of its surroundings while it rose to new heights in downtown St. Louis.”

The tower’s design is an “exceptionally significant local example of the work of master architects HOK” that “exemplifies the architects’ early exploration of the Postmodern style,” according to the nomination.

SomeraRoad declined to discuss the National Register nomination and has not talked publicly about its plans for One Bell Center. But the developer has a history of pursuing historic tax credits for its redevelopment projects. Earlier this year, the firm sold another former AT&T office building, the Ohio Bell Building in Cleveland, to an investor after landing historic tax credits that will help convert the former office tower into apartments. That building, constructed in 1983, was listed on the National Register as part of a broader historic district that was granted official status last year.

BUSINESS JOURNAL

Revised plan for apartments at Optimist site opposed by city staff

Developer Lux Living hopes to build an apartment complex with seven or eight floors and two levels of underground parking.

ST. LOUIS — A plan to build an apartment complex at the site of a historic midcentury modern building in the Central West End is being opposed by city staffers, even after the developer revised the project to preserve the building’s façade.

In a report issued Friday, staff from the city's Cultural Resources Office recommended that the St. Louis Preservation Board, which meets Monday, reject a request from St. Louis-based apartment developer Lux Living to demolish part of the Optimist International building at 4494 Lindell Blvd. Lux, led by CEO Vic Alston, hopes to build an apartment complex with seven or eight floors and two levels of underground parking.

The L-shaped apartment building would be built around two walls of the Optimist façade, in a plan the project's new architect, HOK, redesigned since the Preservation Board voted in August, at the urging of preservationists, to reject Lux's plan to demolish the entire building.

The Cultural Resources Office wrote in its recommendation that the preservation board reject the new design, saying it “considers this proposal a demolition, as it calls for the razing of all but two walls of the pavilion. This project is an example of Facadism, the architectural and construction practice in which only the facade of a building is retained, and a new building erected behind it or around it. Facadism is not preservation.”

The two existing buildings on the site make up the headquarters for global volunteer organization Optimist International, which hopes to downsize and spend less money on maintenance of older buildings for space it mostly doesn't use.

The Optimists’ pavilion building was designated as a landmark in a city survey that designated historic midcentury modern architecture. It called the pavilion a top 25 most significant midcentury modern building, out of 2,400 St. Louis structures evaluated. The second Optimist building was not designated as a landmark, and would be demolished under the new plan.

BUSINESS JOURNAL

Customers visit Rise Coffee House in the Grove on its last day

"There are so many layers to this decision. But the simplest answer is, it is time."

ST. LOUIS — Friday is the last day Rise Coffee House in the Grove neighborhood will be open. 

The shop, located at 4176 Manchester Ave., has offered specialized coffee drinks, breakfast and lunch offerings since it opened in 2013. The line at the coffee house was out the door Friday as customers waited to purchase their final drink from the coffee shop.

"There are so many layers to this decision. But the simplest answer is, it is time," the business said on its Facebook page June 17. "We could wax on about the long term impact of the pandemic, rising food prices, staffing, etcetera,. but the long and the short of it is that running a restaurant has become unsustainable for us." 

Rise Coffee House was founded by owner Jessie Mueller. In a phone interview, Mueller said she "doesn't want to blame the closing on any specific thing." Rather, she said she wants the positive spirit of the coffee shop to overshadow the reasons it's closings.