ST. LOUIS – The developer behind the proposed Butler Brothers building redevelopment has completed funding on the $130 million project, allowing construction to begin on one of the largest vacant buildings downtown.
“We withdrew approval and are mobilizing this week,” said Gary Prosterman, president and CEO of Development Services Group, based in Memphis, Tennessee. “Everything is OK.”
The project will convert the 1906 building, originally built for a turn-of-the-century wholesaler, into 384 apartments, with 400 underground parking spaces, space for a restaurant on the street and possibly a second restaurant or bar with access to the roof. Just two blocks from the major league soccer stadium under construction, about half of the apartments are expected to open by next summer, while the remainder will be ready for occupancy in early 2024.
The Butler Brothers building, a former distribution center for the Ben Franklin retail chain before it went bankrupt in 1996, sat largely unused for almost 20 years. Its enormous size — encompassing an entire city block at Olive Street and 17th Street — has made it both a daunting project and a building that city leaders knew was key to downtown redevelopment.
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“It really should be what we call a catalytic project, given its scale and the fact that 380 residents come to the area with good jobs and money to spend,” Prosterman said. “Activity breeds more activity.”
Prosterman’s company bought the building a year ago for $6 million, its first foray into the St. Louis market being backed by a loan from Greater St. Louis Inc.’s real estate division to cover part of the acquisition financing. The Development Services Group brought years of experience in refurbishing large historic buildings in other cities, complicated projects that often pose unforeseen structural hurdles.
“We have a team that is very experienced in running these large adaptive reuse projects,” said Prosterman. “But we’ve never completed one without finding many surprises.”
He said the company designed the apartments, knowing that many people are now spending part of their work week from home, and added office “nooks” and shared workspaces to the units.
Approximately $24 million in historic Missouri tax credits allocated to a previous owner and available for the project and an additional $18 million in historic federal tax credits will fill the funding gap.
Bank of America is spearheading construction financing, with Meta Real Estate Partners serving as junior construction lender.
“We are proud to work with DSG to revitalize this iconic downtown West building, further demonstrating our commitment to St. Louis,” said Marilyn Bush, President of Bank of America St. Louis, in a Explanation.
Paric Corp. is the general contractor for the project and Trivers is the architect.
About 25% of the units are designated as “workforce housing,” with rents considered affordable for those earning between 80% and 120% of the area’s median income — which equates to between $1,200 and $1,800 per month. This provision was required under an agreement negotiated with the city in exchange for a 15-year tax break on the property.
Prosterman said that during negotiations with the city that included a mayoral change and a leadership change at the St. Louis Development Corp. There was a “little learning curve” while working on the project.
“But everyone on both sides has been working patiently and diligently to figure something out,” he said. “I think the city realizes that it’s a massive building in a strategic place. It just has to happen.”