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But in the world of real estate and condemnation hearings, the market price is what matters. "Most condemnations base a price on what a willing buyer would pay" says Carmody. "The system is based on the notion that a buyer is not forced to buy and the seller is not forced to sell. The dilemma of cases like the Syndicate Trust is that people are not beating down the door to buy the building. It is being bought to remove a problem. The value of the building is valuable only in terms of the area that needs to be improved."
The common method of appraisal -- surveying the value of surrounding buildings -- doesn't work for the Syndicate. "The dilemma in the law is that there is no guidance in regard to valuating a deteriorating property," Kovac says. "Basically you are trying to buy a property nobody really wants, to do something good for the city or downtown."
And the problem is compounded by the realities of downtown. "It is a microcosm of the difficulties facing downtown," says Carmody. "If we had developers and investors lined up to invest in downtown St. Louis, the Syndicate Trust would have worked itself out. The difficulty is trying to attract investors who will take a chance on a building like this. To accomplish that requires the cooperation of the owners of building, as well as the investors and the city. All the parties have to be on board and everybody has to give up more than they would like in order for it to be successful. Unless everybody gives up something, you are not going to get anywhere."
But banks and developers like Finney aren't about to give up profits. And the market value of the Syndicate will determine whether the numbers add up on a balance sheet.
Mike Goeke, vice president of McCormack Baron and Associates, appraised the property for the federal government 10 years ago, finding it to be worth $4 million, no more than the value of the underlying land. "It is a tough building to begin with," Goeke says. "All those buildings are hard to make work in today's marketplace. While there is some demand for residential along the Washington street corridor, there is a large supply of old buildings. It would be nice to be able to save them all, but we have to choose which buildings. There is a huge gap in what it costs, and the city has no money to provide to fill that gap."
"I don't know anybody who is certain about what the Syndicate is worth," says Zack Boyers, vice president of Firstar Community Development Corp. "What is known is that someone with the financial wherewithal to do the project hasn't been convinced the sales price is reasonable. Whether or not they have the right information to go on, I don't know. But it will take an experienced developer with an expertise in historic rehab that can make a lender or co-investor comfortable enough to step into the fray of the structural and political questions."
Craig Heller, president of Loftworks, has stepped into the fray of historic rehab and completed successful projects downtown. Heller believes the project can be completed but says it's too big a task for his small company. "It is going to take outside dollars," he says. "My feeling is, it can be redeveloped, but it needs a bigger developer to get it done, who can handle the initial expense of renovating it. I have bought buildings for $10 a foot, which is about what the Syndicate comes out to, but the Syndicate is a whole lot different than a smaller building." The sheer size -- 705,000 square feet -- of the Syndicate makes it a monumental rehab project. Even with big investors, the project can only be done with substantial public subsidies, including state historical tax credits, which are currently available.
Before any building is rehabbed, it must be bought, something the city failed to do with the Syndicate Trust, especially when the price was far lower. The Syndicate Trust could have been an occupied, functional catalyst for its region of downtown if the city had planned better.
"To me, this is a systemic part of St. Louis government," Jones says. "Because we never do any planning and we are not forward thinking, we have to pay more for redevelopment. If the city had put together a plan 15 years ago and dedicated funds to site assembly of real estate, we could have bought the building years ago when Finney did, and probably for a lot less."
Buying the building from Finney now, says Jones, might not be the best thing for downtown. "You cannot redevelop a building at the expense of downtown redevelopment over the long haul. Even if the city does have $6 million to pay for this, and I don't think they do, it is a knee-jerk reaction to public sentiment. In the short run it feels good, but it is stupid in the long run. It will become the new comparable for downtown and elevate the price of everything else."
Jones' advice to the city is to wait for the price of the Syndicate to drop. "My recommendation is to assemble as much cash as possible and wait for the market to collapse," he says. "Then shoot the wounded and push everyone off the cliff."