Galleria area will get more retail
By Riddhi Trivedi-St. Clair
ST. LOUIS POST-DISPATCH
01/25/2007
Three companies are planning a $150 million hotel and retail project on a prime location along the Brentwood Boulevard corridor in Richmond Heights.
The project calls for two hotels, 30,000 square feet of retail space and parking for more than 600 cars.
The 7.4-acre site, across the street from the St. Louis Galleria, is owned by Houston-based Lionstone Group, and already includes one notable building, the University Club Tower.
Developers hope the commercial, office and retail space already in the area will provide a base for the more than 450 hotel rooms and the specialty retail stores they are looking to include.
Mike Mullenix, chairman and chief executive of Brentwood-based Equis Hospitality Group, said he has been waiting a long time for the project to come to fruition after a deal with the previous owner of the site fell through. Equis, which manages and develops hotels, began discussions with Lionstone after it bought the property in 2005 from Glenborough Realty Trust of San Mateo, Calif. for $40 million.
It took two years to work out another deal, but Mullenix said it provided an opportunity to expand the project's scope. The original plans only included the hotels and parking. The new plans include the retail space.
"It turned out to be a blessing in disguise although it didn't seem like it at the time," Mullenix said.
The hotels will be a 235-room Westin and a 144-suite Homewood Suites by Hilton.
The all-suite hotel will be only the second extended-stay hotel in the immediate area, Mullenix said. The only other one nearby is in Clayton.
The delay on the project may have worked in Mullenix's favor on the hotel side. National research shows it is a good time and place to be a hotel developer in the local market.
Demand for hotel rooms in St. Louis area grew 3.2 percent in 2006 while supply only grew by 2.5 percent, according to data from Smith Travel Research, a national lodging and hospitality research company.
The St. Louis metro area, which is one of the top 25 hotel markets, has consistently seen greater growth in demand than supply. That makes existing — and new — hotels more profitable.
St. Louis is projected to see 8.9 percent growth in the number of hotels in the next three years, said Bruce Ford, senior vice president of Lodging Econometrics, which tracks new construction and performance of hotel properties around the country.
That's lower than the average, which Ford said is positive. It prevents the market from getting saturated and putting downward pressure on prices and occupancy rates.
Hotels that locate near shopping malls, medical centers and office buildings — all of which generate demand for hotels — are likely to do especially well, Ford said.
In addition to the Galleria, the project also is close to the intersection of Highway 40 (Interstate 64) and Interstate 170, adding to visibility.
Clayton-based Sansone Group is developing the retail portion of the project, which also will include a restaurant. The company also manages the University Club Tower for Lionstone. The 23-story, 275,000-square-foot tower is more than 90 percent occupied. Tenants include St. Louis University, which has 14,000 square feet, and the accounting firm of Mueller Prost, which has 20,000 square feet.
When his firm stepped in as manager, said Jim Sansone, principal with the Sansone Group, he realized the potential for additional development on the site.
Instead of working individually, Sansone and Equis decided to work together and create an unified project.
With his company's experience, Sansone said, he is hoping to bring in small, specialty retailers that are either new to the St. Louis market or at least to that area. The project will fit in and in some ways complete the development corridor along Brentwood Boulevard, Sansone said.
rtstclair@post-dispatch.com | 314 340 8206
Somehow they should be able to purchase those as well. Wouldn't you think?
