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Commentary: The real cost of demolishing Cupples 7

This article first appeared in the St. Louis Beacon: Last week, Mayor Francis Slay delivered what may have first seemed like bad news to local preservationists: Building Commissioner Frank Oswald issued an emergency demolition permit for the old Graham Paper Co. warehouse at Cupples Station known as “Cupples 7.”

According to Slay’s press release, the headache ball will be out in one month if no developer steps forward to stabilize the building.

Of course, the emergency demolition order means that the demolition will not return for public hearing at the Preservation Board. The 11th hour is here – but the demolition remains a bad deal for city taxpayers, and a missed opportunity to use public money to seed development instead of a vacant lot.

The bottom line is that an irreplaceable building with the power to generate economic activity is about to be lost due to the city’s inability to innovate its way out of an ownership quagmire.

The building hasn’t had any real chance at redevelopment since before Kevin McGowan’s Ballpark Lofts II LLC purchased it. In his fourth term, Mayor Slay could be leading the path away from tear-it-down policies that rob the city of sense of place and economic activity. Instead, the fractures in city government lead back to wasting resources by wasting buildings, with no real foreseeable public benefit.

The mayoral announcement was not really news at all. Preservationists have known ever since the Preservation Board denied demolition of the building in November 2011 that a plan was urgently needed. At that meeting, a report from ABS Consulting showed that Cupples 7 faced severe structural problems.

Things aren’t better, and in fact Mayor Slay stated this week that “[p]ublic safety is driving the process.” It’s hard to argue with that, until some of the more obscure facts are revealed.

First, the amount of public money that will go into the demolition of Cupples 7 is incredible: As much as $1.7 million could be spent to create a vacant lot. The Building Division estimates that $660,000 will be spent demolishing the venerable timber-and-brick structure. That amount is not offered for stabilization.

On top of that, the office of City Treasurer Tishaura Jones wants to spent $850,000 to buy the mortgage on the property from lender Montgomery Bank, and as much as $250,000 to grade and seed the cleared site. Jones’ predecessor entered into the deal in 2011 to prevent a parking lot from going on the site and competing with an adjacent Treasurer’s Office-owned parking garage.

Although the city doesn’t own Cupples 7, it did wisely issue a Request for Proposals (RFP) for the building in 2012. Yet the RFP did not include any clear sources of gap financing for stabilization – certainly not as much as the $1.7 million taxpayers are going to have to spend to demolish the building so the Treasurer’s Office won’t have a parking lot next door. An RFP for a structurally compromised building that did not offer any identified gap financing sources led to no responses – no surprise.

On top of that, a pending lawsuit seems to be scaring City Hall. In February 2012, Ballpark Lofts II LLC and others sued the city for inverse condemnation (the owner alleges that the government has acquired an interest in his or her property without giving compensation) and damages. Judge Stephen Ohmer dismissed the inverse condemnation count in February 2013, but the count that seeks financial damages goes to trial June 3. Coincidentally, that’s when the Building Division plans to start knocking the building down. That’s one way to deal with the lawsuit, but not the only one.

Clearly, public safety is just one of the forces joining gravity to bear down on Cupples 7. The Treasurer’s Office may have effectively put Mayor Slay and preservationists in check mate. Yet there are remaining questions:

  • What is the actual cost of stabilizing Cupples 7? This author has seen no engineering or architectural study of stabilization, only estimates from construction companies and unsourced figures from the city mentioned in news articles. Knowing the gap between the cost of demolition and stabilization would help taxpayers know what kind of deal they are getting.
  • What sort of offer will the city actually entertain now? Without a formal RFP to answer, the anecdotes offered in the mayor’s press release don’t offer developers specific details sought by the city.
  • If someone could raise $500,000, would she be rejected? Does the city need money down? These answers should be made public.
  • Why can’t the city offer a comparable amount to the demolition funds in escrow for stabilization? The Building Division can’t come in and work on a building not owned by the city, but St. Louis Development Corporation could structure a deal where some money from another sources was available.
  • Why hasn’t the city sued Ballpark Lofts II LLC for the hundreds of thousands of dollars in unpaid property taxes it owes? The resulting lien could lead to the city attaining title, and the chance to fend off the Treasurer’s pending note purchase.
  • At a time when Great Rivers Greenway District has had to go to voters for a sales tax increase, why does the city need more publicly owned green space to maintain? South downtown has more holes than buildings, and does not need another empty space. The walk to Busch Stadium should be activated with retail and activity, not fenced grass.
  • Why should city resources be spent removing a tax-generating parcel downtown from the tax roles? The Treasurer’s Office will maintain the site as dead space, and won’t pay property taxes on it.

Cupples 7 may seem like a threat to the public safety, but the push to demolish it seems driven by other maneuvers in City Hall. We might end up spending close to $2 million to create an untaxed vacant lot just a few blocks from Ballpark Village. The building itself might not be the biggest loss, because the efficacy of city government to make economically sound decisions seems to be threatened here.