urbanSTL

roger wyoming II wrote:^ It didn't even sound like data center was going to be happening soon. Hopefully somebody is working on what retail could look like there in not-too-distant future.

Understand, I also agreed that first floor should be embraced for street level retail.

My point really comes down to finding ways to fill space downtown because what is available outstips demand significantly.

To further the point, my wife worked at the SBC Center, then the ATT center and as a project manager saw how its work force was outsource and significantly reduced before we moved. She still works for ATT and things have vastly changed in the last decade. Any wishful thinking that ATT is going renew its lease to consolidate and add jobs is exactly that, wishful thinking. Downtown St. Louis took a huge hit when SBC bought out ATT (embracing ATT name/brand) and then bought out Bell South. The winners were Texas and Atlanta and loser was St. Louis. Just as St. Louis was the loser on the auto bail out in much the same way, Fiat agreeing to buy Chrysler and immediately closing the auto plants in Fenton.

Alex Ihnen wrote:I don't know the answer, but from a city planning perspective it would be worth a decade or more of waiting instead of filling the building with servers and very few people.

Absolutely agree.

Alex Ihnen wrote:I don't know the answer, but from a city planning perspective it would be worth a decade or more of waiting instead of filling the building with servers and very few people.

Wow, that is harsh. I work at a data center downtown and love it. Our data center offers managed services, meaning that we do A LOT more than just manage servers. This means that we have nearly 50 employees working downtown that weren't before, and also business owners who embrace downtown and its rebirth.

It's possible that a data center could be run with 15 people I guess, but not very well. Regardless, these buildings provide good reuse for data centers given their floor strength. This isn't necessarily needed for office space. Office and residential demand could further be met by building on the vast number of parking lots downtown.

If there was high demand for office space downtown, my opinion might be different. Unfortunately there is not, and data centers allow good reuse of existing building stock and reduce the amount of available office space downtown. They provide tax dollars to the city and bring lots of outsiders downtown (for services or their servers) that can end up eating out and adding more tax dollars. Downtown also already has multiple power feeds and a great network infrastructure. This means putting in data centers downtown is likely much more green than in other areas of the region.

The thing is, you can't put retail starting on the second floor. But you can put the data center (almost) on whatever floor you want. I think the retail spaces should be reserved for retail unless there is no chance of retail going there at all. And this is probably the most attractive location for a major retailer.

roger wyoming II wrote:

metzgda wrote:They provide tax dollars to the city and bring lots of outsiders downtown (for services or their servers) that can end up eating out and adding more tax dollars.

How are data centers taxed? Trying to figure out how much a typical data center downtown (if there is such a thing) adds to the tax rolls with all that equipment.

I don't think it is a matter of how they are taxed as much as the ability of a developer/owner to meet his obligation on property taxes owed to the city among other things. A owner who doesn't have revenue or cashflow on a commercial building will have to make tough financial choices at some point including on whether to skipping out on tax payments (revenues supporting city servcies), argue for a decrease in appraised value (less revenues for city services), where to cut in maintenance, and whether to put the building at risk of foreclosure by skipping out on mortgage/debt payments.

I think Alex discounts a couple of things with this idea

1) Data center being proposed/used for the Railway exchange is only for partialyy use of Raliway Exchange. The developer is not proposing to fill the entire building with servers from what I have read and understand, only up to 8th floor. Alex is using words loosely to further his argument. Leaving the first floor open to street level retail, getting servers on floors 2-8 or at least 3-8 is a good compromise if it helps the developer buy time to find a major tenant.
2) Put past use in context. Remember, first 8 floors were retail and the floors above was corporate office space. I don't think anyone believes the first 8 floors will be filled in the next decade with that much retail nor does the data center proposal take away the office space that was utilized before or keep the space from being reutilized as residential.
3) Servers, like drop ceilings, raised floors, office furniture can be remvoed just as they were installed. Furthermore, A 10 year lease for data center space doesn't mean a higher value retail lease can't be signed in the future once the original data center lease expired.
4) Leaving the building empty for a decade has financially/economic ramifications for the developer but also in part for the city. Having space leased versus sitting empty matters to any market.

I'm surprised on the backlash on what I think is a creative business idea for the developers near term problem - a huge amount of space that will not be leased.

shadrach wrote:I don't understand why the ground and second and maybe third floor can't be reserved for retail?
Anything beyond that, if they really want, can be all servers all the time.

Can someone explain why street level will be servers and not the top half of the building?

I think the data center idean/proposal as stated in the Biz journal article was for floors 1 to 8 because the high ceiling height was advantageous for use as a data center - my take, being able to put in raised floors (space for cooling as well as cable conduits). Floors 9 and higher have standard height ceilings typical to office space that it was built for at the time not being considered.

I think everybody on the thread agree that having servers on first and second floors would be a really really poor use of space. No argument there. The running agrument - plus and minuses, poor use or necessary use for the upper floors 3 - 8 that were once part of the original department store.

I cannot emphasize enough how important I think it is to reserve at least the first and second floors of the Railway Exchange Building for retail.

I am not against the idea of data servers on the middle levels per se- I just think the developer should strive for a better and higher use and the city should encourage this as much as possible. After all, the city gave away millions of dollars in tax credits, including several million to Macy's for their half-arse effort to keep the store open. Ultimately it's all in the hands of the developer, and as I said before, I'm okay with the data center on the middle floors, but I think keeping the first and second floors open to retail opportunities is absolutely crucial to the success of this block and the immediate surrounding area. Supporting lease rates and reducing vacant office space is important as well, but we have absolutely got to do something to fill these dead zones downtown, even if it takes time to attract a major retailer or a group of retailers to the first and second levels of the Railway Exchange. I suspect the lack of activity and co-tenancy still had at least some negative impact on Macy's in the first place.

^That's good. Thx for posting.

I'm not much of a department store shopper, so forgive the ignorance. But I'm now realizing just how expensive Macy's was. Looking for a rolling duffel bag this week, I found a pretty nice one on clearance. It was 50% off the lowest tagged price. That lowest price was $300, meaning the bag is $150, plus 10% sales tax, or $165 total. Now, I expect to spend a premium for getting the item locally, but not this much: The same bag, normal price, on Amazon was $109, with shipping, not to mention anything at Macy's has a no refund/exchange policy. So even with a 50% markdown, Macy's isn't even close.

Yes!!! Maybe we don't need any brick and mortar stores anymore!..Let's kill them all off by purchasing everything online! Did you not receive any value by touching, opening, closing, inspecting how sturdy and well constructed the bag was before deciding it was the one you wanted? I purchased a home entertainment receiver this winter. I could have purchased it on line for a lot less money. But, I purchased it at BestBuy because of the "value added" to my purchase decision from multiple visits to the brick and mortar store. Hopefully, internet sales taxing will be passed to at least level the playing field a little. An "urban place" would be pretty boring with no brick and mortar retail.

I used to buy everything online. Then I realized how detrimental that was to my goal of a more vibrant St. Louis.

I couldn't agree more with Vollum.

vollum wrote:Yes!!! Maybe we don't need any brick and mortar stores anymore!..Let's kill them all off by purchasing everything online! Did you not receive any value by touching, opening, closing, inspecting how sturdy and well constructed the bag was before deciding it was the one you wanted? I purchased a home entertainment receiver this winter. I could have purchased it on line for a lot less money. But, I purchased it at BestBuy because of the "value added" to my purchase decision from multiple visits to the brick and mortar store. Hopefully, internet sales taxing will be passed to at least level the playing field a little. An "urban place" would be pretty boring with no brick and mortar retail.

You entirely overlooked or ignored the part where I said:

Now, I expect to spend a premium for getting the item locally

which is to say..yes, I received some value from opening it and looking at it. But not 200% more than its online value, which is what the original marked-down retail price would have been. 200% more!! And not only that, but online I had the collective wisdom of over 500 previous customers to give me an indication of its quality. It's not the same as looking at it in person. It's not worse, or better. But different. And it's not worth that kind of markup.

Don't these fire sales typically feature substantial discounts to jacked up original pricing. Meaning you're really not saving nearly as much as they'd like you to believe.

moorlander wrote:Don't these fire sales typically feature substantial discounts to jacked up original pricing. Meaning you're really not saving nearly as much as they'd like you to believe.

From what I could tell in this case, the 50% off was taken off of $300, which was less than the original MSRP of $350. Not that they couldn't have retagged everything, but the sale is very specific about the discount being taken off the "lowest marked" price.

bprop...I'm sorry if I was a little harsh....Luggage is almost always discounted at Macys. Over half of their luggage selections are always on sale at any point in time and the brands/lines rotate. Fifty percent off, or forty percent off, or sixty percent off, or sixty five percent off, or fifty percent off and then an additional ten percent off. You have to really want a particular item at a particular point in time to pay the full price. I'm no paragon of virtue. I have purchased a few things on line. A few times because of price, but most often because I couldn't find it at a local retailer. My point remains... If we don't support local brick and mortar retailers with our pocket books, they will not continue to be there. Hell, I even buy my toilet paper and paper towels at Culinaria instead of Target or Wallyworld. I usually buy these items when they are on sale. And, then the price difference isn't too bad. But, I want Culinaria to continue to exist. There is a value to me for them to be profitable and continue to be there. And, they are not going to be there in the long run if they can't make some money off of items that have a higher markup than run of the mill groceries. I'm willing to pay a little extra to wipe my ass and clean up spills. Over the course of a year how much am I out? Maybe the price of a few beers or glasses of wine at a local bar.