Where's the preservation board when you need them?
That building really kept a little urban-ness going on that stretch. Missed opportunity for sure.
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Sent from my iPhone using Tapatalk
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Oh stop. No one takes climate change seriously in the USquincunx wrote: ↑Jul 23, 2025When is our city going to take climate change seriously?
Yeah. Best we can do hope for more EV adoption in the next 10-20 years. Car-free utopia isn't coming here, or likely any big American cities other than NYC, any time soon.
This siting is a travesty. Maybe the Garcia's could throw some weight around? This is probably pretty far afield from their vision
This siting is a travesty. Maybe the Garcia's could throw some weight around? This is probably pretty far afield from their vision
Hot take but hear me out. We need some positive thinking. Context I drive this stretch daily. I have been a city planner in the public and private sectors from coast to coast and chose St. Louis because it is an urbanist's hidden gem. I prefer something that preserves the structure or contributes to a walkability. Also, I do not think this is doom and gloom. Much of South Kingshighway has an auto-oriented character. There are far worse places fast food could end up.
My city planning career has shown me we won't always get det development we want, especially in a place like St. Louis where good development is hard to get done for a variety of reasons. Maybe the numbers for something I would prefer don't pencil out for this site. Development on this site isn't perfect, but it is a sign that people want to invest in South Kings highway. There are many other opportunities to develop with an urban focus in areas with a more urban character. I hope that this is a sign to other investors that South Kingshighway, and St. Louis overall, is a safe place to invest and that it attracts more folks to the area. I hope that the auto oriented use developed in this location means one less attempt to put it in more walkable areas.
My city planning career has shown me we won't always get det development we want, especially in a place like St. Louis where good development is hard to get done for a variety of reasons. Maybe the numbers for something I would prefer don't pencil out for this site. Development on this site isn't perfect, but it is a sign that people want to invest in South Kings highway. There are many other opportunities to develop with an urban focus in areas with a more urban character. I hope that this is a sign to other investors that South Kingshighway, and St. Louis overall, is a safe place to invest and that it attracts more folks to the area. I hope that the auto oriented use developed in this location means one less attempt to put it in more walkable areas.
What a vapid opinion. You know while I largely hold city planners in esteem they can be wrong too, and our city is the site of some of the most infamous urban planning disasters.
Knowing how development works =/= status quo development policies being smart.
Yeah, no sh*t. You do not have to explain to me or the members of this forum that South Kingshighway is littered with car dealerships, strip malls and gas stations or that we do not always get the development we want. The point is this destroys a historic building on a stretch of Kingshighway with very little historic or urban character left, and also to Quin's point, this multiplies the amount of land which contributes very little property tax to the City on a per-acre basis while using a lot of infrastructure with its curb cuts, drive throughs and asphalt. Furthermore, this actively harms pedestrian safety in our city which is already plagued by numerous traffic related deaths by adding a curb cut to Kingshighway where they obviously don't need one (could easily have used the Home Depot driveway).Much of South Kingshighway has an auto-oriented character. There are far worse places fast food could end up.
My city planning career has shown me we won't always get det development we want
Knowing how development works =/= status quo development policies being smart.
Y'all are always so angry on here.
Then buy the property, run the numbers, and propose the better alternative. I also prefer something else, but development is expensive and difficult. I support you 100% and look forward to you setting the example of a good developer in St. Louis.
Then buy the property, run the numbers, and propose the better alternative. I also prefer something else, but development is expensive and difficult. I support you 100% and look forward to you setting the example of a good developer in St. Louis.
"Much of South Kingshighway has an auto-oriented character." it is. It's a problem and burden on our city.
This isn't an investment. If we bothered to account for the negative impact on public health, public safety, the environment, city services and infrastructure, it'd be shown to be a liability. A single fatal car crash due to this would easily negate the benefits to society this will produce, and a few calls for service and a repave of Kingshighway and traffic light maintenance will outpace its tax generation. It's a suburban wealth mine.
This has a floor to area ratio of 0.06, while the existing structures are 1.3. That is an indicator of how bad a proposal this is. It's also about 2/3 pavement, another indication.
I realize perfect is not in the cards here, but how about a FAR of 0.12? Or ten parking spaces instead of 41, which will be mostly empty most of the time contributing to the urban heat island, and leave some of the land for something else?
This isn't an investment. If we bothered to account for the negative impact on public health, public safety, the environment, city services and infrastructure, it'd be shown to be a liability. A single fatal car crash due to this would easily negate the benefits to society this will produce, and a few calls for service and a repave of Kingshighway and traffic light maintenance will outpace its tax generation. It's a suburban wealth mine.
This has a floor to area ratio of 0.06, while the existing structures are 1.3. That is an indicator of how bad a proposal this is. It's also about 2/3 pavement, another indication.
I realize perfect is not in the cards here, but how about a FAR of 0.12? Or ten parking spaces instead of 41, which will be mostly empty most of the time contributing to the urban heat island, and leave some of the land for something else?
This is a fundamentally undemocratic opinion. If you think you have to be a developer with millions of dollars in cash and loans in order to state an opinion on development policies in our city like less than 1,000 people out of 300,000 in our city would matter. And like you won! This is going to be built! Are you so upset not to have your expertise validated or what?Zone.Out wrote: ↑Jul 24, 2025Y'all are always so angry on here.
Then buy the property, run the numbers, and propose the better alternative. I also prefer something else, but development is expensive and difficult. I support you 100% and look forward to you setting the example of a good developer in St. Louis.
Also be sure to call into sports radio shows and tell the hosts and guests and other callers that they aren't allowed to have an opinion unless they can buy the team.
I am a shareholder in this city. That's more than enough. to have an opinion.
We have to make up for the shortcomings and liabilities and are exposed to the negative externalities of this development.
There was a public hearing where anyone was literally entitled to express an opinion because the proposal violated zoning code. It is within 300 feet of another drive thru on the same side of the street. Shameful that that was the only violation of our zoiing code. Another reason it needs an overhaul.
I am a shareholder in this city. That's more than enough. to have an opinion.
We have to make up for the shortcomings and liabilities and are exposed to the negative externalities of this development.
There was a public hearing where anyone was literally entitled to express an opinion because the proposal violated zoning code. It is within 300 feet of another drive thru on the same side of the street. Shameful that that was the only violation of our zoiing code. Another reason it needs an overhaul.
Don't take it personally, Zone. We're mostly a bunch of idealists around here. The occasional dose of reality can be a bitter pill to swallow.
Personally, I gave up on this stretch of Kingshighway a long time ago. Some 45 years ago I walked this street (or took the bus) every day, on my way to Southwest High-school at Kingshighway and Arsenal. Even back then it was nothing but auto-centric businesses.
Personally, I gave up on this stretch of Kingshighway a long time ago. Some 45 years ago I walked this street (or took the bus) every day, on my way to Southwest High-school at Kingshighway and Arsenal. Even back then it was nothing but auto-centric businesses.
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^with the recent yearly surplus for the city and the continued alarm bells for new residents... I honestly think its time for the city to begin developing properties like this in desirable neighborhoods... and then selling them once they are filled up and/or finished to fund the next project. Its fairly silly we give incentives, tax credits, let solid buildings get set fire to multiple times and then wait for other residential projects while rates are bad...
I don't think you need to be an idealist to reject this proposal. Kingshighway is largely a lost cause, however, there are still a handful of very urban and decent buildings standing along it. This is one of those. And I'm not totally opposed to another fast-food food restaurant. They generate at least some sales tax and feed people. Sure. But Kingshighway is not a fully occupied street. There are lots of empty lots and even a vacant car dealership that you can build a fast food restaurant on. This piece of property is currently being better utilized by a decently urban building. I, we, are not advocating for the ideal, we are advocating for the status quo because it is preferable to this plan.
And seeing what Garcia has been able to do with vacant buildings along Kingshighway makes me really think that maybe something could be done with this building in particular. And maybe not, but they have seemingly pulled off some miracles over the years.
I have disagreed with PeterXCV before on issues like this, in particular TGS, but he is absolutely right on this issue and this property. This is a terrible proposal and will be a net negative on the city when it's all set and done.
And seeing what Garcia has been able to do with vacant buildings along Kingshighway makes me really think that maybe something could be done with this building in particular. And maybe not, but they have seemingly pulled off some miracles over the years.
I have disagreed with PeterXCV before on issues like this, in particular TGS, but he is absolutely right on this issue and this property. This is a terrible proposal and will be a net negative on the city when it's all set and done.
I was inspired by stldotage's AI generated renderings a couple of days ago to take a closer look at this potential project from a financial standpoint. We often focus on how projects look or the site plans and how they relate to the neighborhood, etc. We don't often dig into the numbers to see how the finances impact the development of a building or site... why a project does or does not happen, or why it looks the way it does. I hope this broadens the conversation and might be relevant to future conversations. I'll stick my neck out a bit and show my work and share my thoughts.
My back of the envelope model is available here. I'm not saying this is "correct", just my first pass with some informed assumptions. For a development deal I might have 20+ versions of a model to figure out how to make it work. Here are my notes on this version...
Units: Came up with 60 units in a roughly 63,000 sf building (758sf avg.), which is between my Google Earth measurement and the For Sale Listing, noting the accessory building will probably need to be demo'd. Also, included a 2,000sf retail space.
Parking: 1 to 1 surface parking included in rent. At this rent-level and in this location people will expect at least one space per unit. The site is not large enough to fully accommodate parking. Can we lease some of Home Depot's excess parking? Will increase expenses or tenant charges.
Rent: Overall, average of $2.00 per SF, or $1,508 per unit. This is less than Grand Flats, and similar to newer Morganford and Kingshighway properties
Expenses: Looked at some existing properties and recent underwriting, $6,842 per unit annually. This seems high, but this is where we are now. Insurance and payroll particularly have increased.
Site Cost: assumed $1.5 million ($25,000/unit), was listed at $1.8 million. Not crazy for "luxury" apartments, but would like this to be lower.
Development Cost: $275 per square foot, looked at a couple of recent medium-scale historic adaptive re-use conversions to apartments using historic credits. I think this could be optimistic given the building condition
Financing: Debt, Equity and Historic Tax Credits (State and Federal). HTC covers about 33% of the project cost, NOI only supports a 38% loan to value , or $8.56 million. Developer needs to find $6.4 million in equity.
Incentives: 90% tax abatement. This increases debt capacity by $690,000, and investor IRR by 329 basis points. Without abatement project doesn't come close to working.
Does the project "work"? No. All of the return metrics fall short of market expectations for financing from an equity investor. Specifically, the project's unlevered return of 8% falls short of a typical 10% return and the Investor's return of 9% falls well short of a typical 16% return. Again, this is a first pass, maybe we can increase the rents, lower expenses, negotiate a lower price for the site, but will the bank and investor agree with our more optimistic assumptions?
I know it will be brought up, so why the required return is necessary is a whole other discussion. But basically, the high level of risk and competitive returns in other markets or investments. I don't make the rules, but to attract a large amount of equity, a project needs to generate the returns the market expects, otherwise investors will look elsewhere.
We have a highest and best use problem here. A drive-thru is much cheaper to build and will generate higher net operating income than an apartment building, so they can pay higher price for the site and get the financed more easily at a higher level of return. Even if the property was zoned to only allow multi-family or mixed-use it would likely sit vacant until rents increased faster than expenses, interest rates fall, and or construction prices moderate,,, or, it falls down. I am sure someone went through this exercise with an intent to redevelop the building, but probably came up with a similar result.
What can the city do? Be more willing to offer incentives, step in as an equity investor with below market expectations for returns, buy and prep land and sell for below market value, direct grant funding. But is there a political will to offer assistance to a project in Tower Grove South with $2.00/sf rents? The City would need to be more pro-active if it wants see these projects done.
My back of the envelope model is available here. I'm not saying this is "correct", just my first pass with some informed assumptions. For a development deal I might have 20+ versions of a model to figure out how to make it work. Here are my notes on this version...
Units: Came up with 60 units in a roughly 63,000 sf building (758sf avg.), which is between my Google Earth measurement and the For Sale Listing, noting the accessory building will probably need to be demo'd. Also, included a 2,000sf retail space.
Parking: 1 to 1 surface parking included in rent. At this rent-level and in this location people will expect at least one space per unit. The site is not large enough to fully accommodate parking. Can we lease some of Home Depot's excess parking? Will increase expenses or tenant charges.
Rent: Overall, average of $2.00 per SF, or $1,508 per unit. This is less than Grand Flats, and similar to newer Morganford and Kingshighway properties
Expenses: Looked at some existing properties and recent underwriting, $6,842 per unit annually. This seems high, but this is where we are now. Insurance and payroll particularly have increased.
Site Cost: assumed $1.5 million ($25,000/unit), was listed at $1.8 million. Not crazy for "luxury" apartments, but would like this to be lower.
Development Cost: $275 per square foot, looked at a couple of recent medium-scale historic adaptive re-use conversions to apartments using historic credits. I think this could be optimistic given the building condition
Financing: Debt, Equity and Historic Tax Credits (State and Federal). HTC covers about 33% of the project cost, NOI only supports a 38% loan to value , or $8.56 million. Developer needs to find $6.4 million in equity.
Incentives: 90% tax abatement. This increases debt capacity by $690,000, and investor IRR by 329 basis points. Without abatement project doesn't come close to working.
Does the project "work"? No. All of the return metrics fall short of market expectations for financing from an equity investor. Specifically, the project's unlevered return of 8% falls short of a typical 10% return and the Investor's return of 9% falls well short of a typical 16% return. Again, this is a first pass, maybe we can increase the rents, lower expenses, negotiate a lower price for the site, but will the bank and investor agree with our more optimistic assumptions?
I know it will be brought up, so why the required return is necessary is a whole other discussion. But basically, the high level of risk and competitive returns in other markets or investments. I don't make the rules, but to attract a large amount of equity, a project needs to generate the returns the market expects, otherwise investors will look elsewhere.
We have a highest and best use problem here. A drive-thru is much cheaper to build and will generate higher net operating income than an apartment building, so they can pay higher price for the site and get the financed more easily at a higher level of return. Even if the property was zoned to only allow multi-family or mixed-use it would likely sit vacant until rents increased faster than expenses, interest rates fall, and or construction prices moderate,,, or, it falls down. I am sure someone went through this exercise with an intent to redevelop the building, but probably came up with a similar result.
What can the city do? Be more willing to offer incentives, step in as an equity investor with below market expectations for returns, buy and prep land and sell for below market value, direct grant funding. But is there a political will to offer assistance to a project in Tower Grove South with $2.00/sf rents? The City would need to be more pro-active if it wants see these projects done.
Re Site Cost: Amazing what they want for a building that they then say is worthless. You'd think it'd be the land value minus the demo and remediation cost.
Don't forget sales tax exemption on materials.
Don't forget sales tax exemption on materials.
^ That's part of the point. Unfortunately, it's worth more as a drive-thru site (even with demo costs) than as a potential redevelopment opportunity. It's up to the city to shift that value proposition through zoning and incentives... if that is what they want. That said, I am not sure what the final selling price was, I just discounted the asking price a bit. It may be lower, but even at $0 this isn't close to a slam dunk.
Also, good point on the sales tax exemption. It is baked into the construction costs I used.
Also, good point on the sales tax exemption. It is baked into the construction costs I used.
It's certainly an indictment of our financial system, economy, and gov't policies that drive-thru fast food makes more sense than to an investor than something that would be more productive for the community. The subsidies for the fast food drive thru aren't on the pro forma. The negative externalities are socialized.
Home Depot won't let a developer use part of their parking lot. This goes back years and has always been the reason residential won't work here.
There's already a small existing lot, and I think more space could easily have been found for parking looking at the lot. There's that 1 story shed in the back that could've been torn down + they could use the 1st floor for parking.STLinCHI wrote: ↑Jul 25, 2025Home Depot won't let a developer use part of their parking lot. This goes back years and has always been the reason residential won't work here.
Can't use parking efficiently, that would leave too much land to develop on, or put things closer together, or reduce the heat island effect or reduce runoff, the horror!
Looks like there are 15 spots. I assumed you tear down the accessory building, and maybe you get another 15 spots, so you'd be at 0.5 spots per unit. If you create parking on the first floor you lose units, retail space, and a bunch of rental income.PeterXCV wrote: ↑Jul 25, 2025There's already a small existing lot, and I think more space could easily have been found for parking looking at the lot. There's that 1 story shed in the back that could've been torn down + they could use the 1st floor for parking.STLinCHI wrote: ↑Jul 25, 2025Home Depot won't let a developer use part of their parking lot. This goes back years and has always been the reason residential won't work here.
What you describe in the latter half of your comment is actually exactly what the city should be doing. Couldn't care less what neighborhood it's in.TalkinDev wrote: ↑Jul 25, 2025I was inspired by stldotage's AI generated renderings a couple of days ago to take a closer look at this potential project from a financial standpoint. We often focus on how projects look or the site plans and how they relate to the neighborhood, etc. We don't often dig into the numbers to see how the finances impact the development of a building or site... why a project does or does not happen, or why it looks the way it does. I hope this broadens the conversation and might be relevant to future conversations. I'll stick my neck out a bit and show my work and share my thoughts.
My back of the envelope model is available here. I'm not saying this is "correct", just my first pass with some informed assumptions. For a development deal I might have 20+ versions of a model to figure out how to make it work. Here are my notes on this version...
Units: Came up with 60 units in a roughly 63,000 sf building (758sf avg.), which is between my Google Earth measurement and the For Sale Listing, noting the accessory building will probably need to be demo'd. Also, included a 2,000sf retail space.
Parking: 1 to 1 surface parking included in rent. At this rent-level and in this location people will expect at least one space per unit. The site is not large enough to fully accommodate parking. Can we lease some of Home Depot's excess parking? Will increase expenses or tenant charges.
Rent: Overall, average of $2.00 per SF, or $1,508 per unit. This is less than Grand Flats, and similar to newer Morganford and Kingshighway properties
Expenses: Looked at some existing properties and recent underwriting, $6,842 per unit annually. This seems high, but this is where we are now. Insurance and payroll particularly have increased.
Site Cost: assumed $1.5 million ($25,000/unit), was listed at $1.8 million. Not crazy for "luxury" apartments, but would like this to be lower.
Development Cost: $275 per square foot, looked at a couple of recent medium-scale historic adaptive re-use conversions to apartments using historic credits. I think this could be optimistic given the building condition
Financing: Debt, Equity and Historic Tax Credits (State and Federal). HTC covers about 33% of the project cost, NOI only supports a 38% loan to value , or $8.56 million. Developer needs to find $6.4 million in equity.
Incentives: 90% tax abatement. This increases debt capacity by $690,000, and investor IRR by 329 basis points. Without abatement project doesn't come close to working.
Does the project "work"? No. All of the return metrics fall short of market expectations for financing from an equity investor. Specifically, the project's unlevered return of 8% falls short of a typical 10% return and the Investor's return of 9% falls well short of a typical 16% return. Again, this is a first pass, maybe we can increase the rents, lower expenses, negotiate a lower price for the site, but will the bank and investor agree with our more optimistic assumptions?
I know it will be brought up, so why the required return is necessary is a whole other discussion. But basically, the high level of risk and competitive returns in other markets or investments. I don't make the rules, but to attract a large amount of equity, a project needs to generate the returns the market expects, otherwise investors will look elsewhere.
We have a highest and best use problem here. A drive-thru is much cheaper to build and will generate higher net operating income than an apartment building, so they can pay higher price for the site and get the financed more easily at a higher level of return. Even if the property was zoned to only allow multi-family or mixed-use it would likely sit vacant until rents increased faster than expenses, interest rates fall, and or construction prices moderate,,, or, it falls down. I am sure someone went through this exercise with an intent to redevelop the building, but probably came up with a similar result.
What can the city do? Be more willing to offer incentives, step in as an equity investor with below market expectations for returns, buy and prep land and sell for below market value, direct grant funding. But is there a political will to offer assistance to a project in Tower Grove South with $2.00/sf rents? The City would need to be more pro-active if it wants see these projects done.
And it would be more valuable sitting and rotting than being made into a drive through restaurant. It's just reality.