Updated at 6:45 p.m. with additional comments from city and business leaders
St. Louis Mayor Tishaura Jones and development officials announced plans Tuesday to take over the run-down Railway Exchange Building through a direct sale or through eminent domain.
Jones’ office sent a letter to Hudson Holdings, the building’s owners, stating the city’s proposal to purchase the building through the city’s Land Clearance for Redevelopment Authority board.
If the owners decline the offer, Jones said the city will move forward in acquiring the 22-story, 1.24 million-square-foot building through eminent domain.
“We have been moving aggressively to accelerate the process of securing Railway Exchange with the ultimate goal of stabilizing it for future redevelopment,” said Neal Richardson, St. Louis Development Corporation president and CEO. “While eminent domain is the solution of last resort, after lengthy conversations with interested developers and legal experts, it became clear that given the complex financing structure put in place through prior redevelopment initiatives and the nature and level of encumbrances on the property, the best way to move negotiations with all parties forward and acquire a clean title was to initiate eminent domain.”
The move isn’t a new one for a city attempting to grapple with its surplus of derelict properties. Earlier this year, Jones and the SLDC announced plans to address decay at the Millenium Hotel — another of the downtrodden properties Jones tasked SLDC and Greater St. Louis Inc. to tackle earlier this year. The groups are working with the Singapore-based real estate conglomerate City Developments Limited to find a new group to buy and develop the iconic hotel.
The Railway Exchange has been vacant since 2014 and has become a high-profile downtown building riddled with trespassing and other crime.
The building was originally the headquarters for Famous-Barr’s parent company May Department Stores, established in 1905. The company merged with Macy’s in 2005. The store at the site closed in 2013, and the T-REX co-working incubator — the only remaining tenant — left in 2014.
Last month, the security firm Citizens Guard Security, which had previous experience with the Railway Exchange, was hired by the St. Louis Department of Public Safety to secure both the main building and the adjacent parking garage by having a strong visible presence to try to deter crime.
“You've got to remove these blights from downtown St Louis,” said Jason Hall, Greater St. Louis Inc.’s CEO. “This is not acceptable in the central business district. It's not acceptable as the front door to a growing metro — the 16th-fastest growing metro [by GDP] in the United States.”
Richardson said local government and business leaders were at an impasse in progressing toward selling the property to a developer that has the financial grounding to move it forward. In addition to the physical structure, he explained there are a slew of legal and financial issues surrounding the property that must be addressed. Currently, roughly $52 million is owed in liens on the property.
“We have to really repair a lot of the harm that has been caused and get us back to an even playing field before we can talk about the future redevelopment of that site,” Richardson said.
Jones said the city would be weighing options on how it can support redevelopments, like the Railway Exchange Building, through various funding streams — including Rams settlement funds.
“This is an unprecedented opportunity on our city's shoulders, and there are a ton of possibilities to … be able to use that for generational investments and to be able to spend some on investments we need right now,” she said. “I don’t think that those two are mutually exclusive.”
The city is in the process of getting the building appraised by the end of July, then will move forward to make an offer to its owner in September, Richardson said. If the owners decline, eminent domain filings would be filed with the courts in late September or early October, he said.
