A $26.3 million development project to revitalize one of south St. Louis’ most prominent vacant buildings and establish 52 new affordable housing units is finally nearing the start of construction, about two years after winning approval from the city.
The Marquette Homes project by Lutheran Development Group and Rise Community Development includes the rehabilitation of six buildings and the construction of three others in the Gravois Park and Dutchtown neighborhoods.
One of the key rehabilitations included is the former Melba Theatre/Grandview Arcade building along South Grand Boulevard near the intersection with Gravois Avenue.
“This being such a prominent building at the crossroads of south city, it’s a great opportunity to take a vacancy and turn it into something that’s going to be serving the community for years to come,” said Chris Shearman, Lutheran Development Group’s executive director.
The property was built in the 1920s but has sat vacant for the past few decades. The disrepair is evident with the boarded-up exterior and when walking around inside.
Shattered glass and bits of rubble crunch underfoot inside the century-old building. Cracked old paint peels away from some of the walls, while others are blanketed with tags from graffiti artists.
“I hate that it’s in the condition it’s in, and we hope to have a remedy very soon,” said Rob Wagstaff, the project’s architect. “But it’s a fantastic building, got great bones.”
Wagstaff noted most of the building's interior has escaped water damage, and beneath the rubble in the arcade are terrazzo floors waiting to shine again.
“Arcade, in this case, is this two-story volume space, it’s got this balcony that goes all the way around, and it has a grand stair at the end,” he said. “And in the previous life as a office building, mixed-use [with a] movie theater, you would have had individual offices all off of the arcade.”
Lutheran Development Group’s Shearman said the rehabilitation will yield new office space back, including where his organization will eventually move and space for “like-minded” nonprofit service providers in this part of the city.
It’s a project that builds on early momentum already visible on this stretch of South Grand, just north of where Family Care Health Centers has broken ground on a new facility.
“There will definitely be some synergy, because some of the intended users are service providers that would complement the kind of full-scale health care services that are going to come with that new facility,” said Mark Stroker, director of real estate development for Rise Community Development.
The rest of the building will be filled out with 16 affordable housing units that will be “move-in ready,” he said.
“I know it will be an anchor,” Stroker said. “It will bring along and probably spur additional improvement to buildings next to us and buildings across the street, and there are several right here that need work.”
Members of both Rise Community Development and Lutheran Development Group shared interactions with local community members who are eager for what the project will ultimately bring.
But the total project, encompassing a handful of other buildings, including another prominent vacancy at 3305 Meramec St., has taken years to get to a point where it’s about 30 days out from the real estate deal closing. It’s taken so long because of the several funding sources needed to cover the roughly $26.3 million price tag, Shearman said.
“When you have these large, complex projects, particularly in a time of ever-changing interest rates, ever-changing construction costs, it's like you're just herding cats, you're trying to just rein it all in,” he said. “Each piece has its own timeline, and if one part slows down, then it slows down the whole project.”
The capital stack for this development includes low-income housing tax credits and historic tax credits from both federal and state governments, funding from St. Louis’ Community Development Administration, the Missouri Housing Development Commission, a construction period tax exempt bond and a few other sources.
One of the holdups has been the equity markets, Stroker said.
“The majority of the money that's going to improve this building comes from tax credit equity, from both state and federal tax credit investors,” he said. “Right now, the federal tax credit equity market is chilled. It is depressed.”
Broad uncertainty in the marketplace is keeping investors from committing to projects, which ultimately delays necessary improvements for communities in St. Louis in need of them, Stroker added.
But now just about a month out of closing the real estate deal, he said he’s grateful for the patience from the many building owners they’re engaged with, like the city and the Garcia Group, which currently owns the Melba Theatre building.
“If they're not willing to wait, help and be patient, then this building perhaps drops out of the project,” Stroker said.
And soon, what was a major vacancy may encourage more investment in nearby properties that also need it, said Tom Florent of Luthern Development Group.
“All of the sudden, you start seeing boots on the ground, people working on it,” he said. “And that changes people's opinions of what’s going on in their own community.”
