Good article albeit as usual the Fed has carefully chosen its' words. This has been a concern of mine for quite some time. While I love the developments being built in the central corridor. . . many have grown concerned with the possible glut of apartments as a percentage of commercial residential developments. Over 2000 apartments have been built with a few years without a significant population or employment growth in our region. I realize that much of the development is centered around the institutions (SLU, Wash U, etc.) and exciting innovation hubs like Cortex. However, developers are testing the limits of the rental market. Hopefully, the condominium market strengthens so as to absorbs some of the rental units that are able to be converted to condos. I fear the pendulum has drifted toward apartments because lending is far easier to secure within the commercial apartment market than in building for sale condominiums, etc. This issue isn't mentioned in the article and likely won't be resolved with Fed interest rate hikes alone.hebeters2 wrote: ↑Feb 04, 2017“A decade after the U.S. housing market collapsed, Federal Reserve officials are watching rising apartment towers as the next potential asset-price bubble, which could add to the debate about the pace of interest-rate hikes this year.
http://www.bloombergquint.com/global-ec ... s-17-risks
Nice comments, I would say St Louis hasn't been anywhere close to the building that has been happening in a lot of big metro areas. A good indication is rents for the area which have consistently trending on slow upward growth if not mistaken. So some extra units might not hurt the market and help the consumers if it levels off prices & adds a little competition. Not too mention Alex comments, One hundred is a +50 year asset.Alex Ihnen wrote: ↑Feb 04, 2017I think it's interesting to consider the local impact of a building glut...I'd argue that a neighborhood like the CWE benefits from a building boom, whether or not investors profit, if rents dip a bit, a building has vacant units, etc. The city and neighborhood get an asset that is likely to stand for 50+ years. In general, I think St. Louis needs to get in on the boom/bust cycle a little more.
I think everything is moving ahead as plannedstlgasm wrote:Any updates on this? What's the latest?
They have asked for a 90% tax abatement for 10 years, and then a 50% tax abatement for 5 years.Alex Ihnen wrote:Still moving forward.
And I haven't been keeping up with everything on this one, but in case no one else has shared the story...I was told that the developer had planned to build without incentives. They were moving forward and a local lawyer called them and said, "ahem, Ahem, AHEM...they give out free money in St. Louis!" And thus the request for subsidy was born.
I once did a very large framing job for a law firm's new space downtown, and one of their perks was that they paid no sales tax on any of the new artwork or the framing thereof. All of these types of line-items add up to big dollars in lost revenue.andrewarkills wrote: ↑May 11, 2017I believe an additional request was made for a rebate of sales tax on all construction materials purchased.
Your screen name makes sense now.framer wrote: ↑May 11, 2017I once did a very large framing job for a law firm's new space downtown, and one of their perks was that they paid no sales tax on any of the new artwork or the framing thereof. All of these types of line-items add up to big dollars in lost revenue.andrewarkills wrote: ↑May 11, 2017I believe an additional request was made for a rebate of sales tax on all construction materials purchased.
Below is what they're asking for in addition to the $10million in subsidies. The LCRA board is meeting tomorrow to discuss.dredger wrote:Looks like the project looking for some help with revenue bonds as per biz journal article. Behind pay wall so I'm not much help
http://www.bizjournals.com/stlouis/news ... llion.html
Also not sure what this condo building has to do with industrial revenue.An industrial revenue bond (IRB) is a unique type of revenue bond organized by a state or local government. The bond issue is sponsored by a government entity but the proceeds are directed to a private, for-profit business.
An IRB differs from traditional government revenue bonds as the bonds are issued on behalf of a private sector business. IRBs are typically used to support a specific project, such as a new manufacturing facility.
The bond issue is created and organized by a sponsoring government, with the proceeds used by the private business. The business is responsible for bond repayment. The sponsoring government holds title to the underlying collateral until the bonds are paid in full. In some cases, this arrangement may provide a federal tax exempt status to the bonds, and many times a property tax exemption on the collateral. The sponsoring government is not responsible for bond repayment and the bonds do not affect the government’s credit rating. IRBs are desired as the private business receives a lower interest rate (due to the bonds tax-exempt status), a property tax exemption, and a long-term, fixed rate financing package. [1]
Bond proceeds may be used for a variety of purposes, including land acquisition, building construction, machinery and equipment, real estate development fees, and the cost of bond issuance.[2]
A sign of progress IMO.framer wrote:So should we take this as an encouraging sign of progress, or a troubling sign of financial difficulties?
