Objective: For nearly 50 years, residents fled from the severely distressed and disconnected neighborhood of North St. Louis. In an effort to revitalize the area, local partners leveraged NMTCs that ultimately funded close to 95% of the economic development component. The resulting Crown Square development has brought in new housing, new jobs and inward migration—all while maintaining the area’s historical significance.
Major Participants: City of St. Louis; Regional Housing and Community Development Alliance (RHCDA); Enterprise Community Investment, Inc.; McCormack Baron Salazar; US Bancorp CDC; Enterprise Bank and Trust; Community Development Alliance of St. Louis.
Background: Since the mid-1800s, the village of North St. Louis served as a go-to place for new immigrants. During the Great Depression and immediately thereafter, a flood of new residents—many of whom worked in neighboring St. Louis factories—helped the area to thrive. But after WWII, the construction of a giant highway disconnected North St. Louis from the city’s industrial core. In short time, the neighborhood fell into decline. City planners attempted to revitalize the area by closing streets to vehicular traffic and investing in a pedestrian mall surrounded by retail and commercial space. The unintended consequence was that less vehicular traffic launched the area into further decline. Between 1950 and 2000, the neighborhood had lost nearly 85% of its population; only 1,500 residents remained. The median housing value was just under $15,000 and rents averaged just $220—a clear indication of the disinvestment in the neighborhood.
In an attempt to spark new growth, the City of St. Louis designated Old North St. Louis as a priority area and created a new land-use plan. A 2002 strategic plan outlined a series of recommendations for this area, including 2.5-story infill mixed-use development. A key component to redevelopment of this area would be to maintain its historic significance and charm.
How it Happened: City officials recognized that the redevelopment of the former pedestrian mall – which includes 11 separate buildings along 14th street – would cost nearly $35 million to complete. As such, the City had it designated as a HUD Qualified Census Tract (QCT), St. Louis Regional Empowerment Zone (EZ), SBA designated HUB Zone and a historic district. As such, the area was ripe for federal investment.
Because of the size of the project, it was broken down into two components: housing and economic development. The $14.9 million housing component was financed primarily through Low-Income Housing Tax Credits and tax exempt bonds. The bulk of the economic development portion, the $21.2 million revitalization of the commercial center, was financed almost entirely through NMTCs.
Several local community development organizations leveraged NMTC dollars for the project, including Enterprise Community Investment Inc. and US Bancorp CDC. A total of $17.5 million worth of NMTCs were put towards the project; US Bank invested $3.1 million in federal historic tax credits (HTCs), which were then coupled with $2.9 million in HTCs at the state level. The City of Saint Louis also invested $730,000 worth of its community development block grant dollars. The cobbling together of these funds makes the economic development component especially unique in its low loan-to-cost ratio; only $1.6 million was debt equity.
Had the NMTCs not been available this project could have not moved forward at the rate it did. Construction began in mid-2007 and most of the work was complete by late 2009. The Community Development Alliance provided technical assistance and development expertise throughout the project.
Results for Local Economy: In October 2010, the 14th Street Pedestrian Mall finally reopened to vehicular traffic. Crown Square now serves as a new “town center,” which includes the rehabilitation of 27 buildings into 80 historic loft, apartment and live/work units and 34,000 square feet of commercial space. More than 20 companies moved into Crown Square between late 2009 and 2011. More than 42 affordable units have been created, in addition to many more market-rate units. A 50-year trend of out-migration has been reversed; since 2010, population growth is up 30%. A new food co-op is the first of its kind to serve a low-income neighborhood in St. Louis; previously, residents had long commutes to access fresh, healthy foods.
Importantly, the neighborhood is no longer disconnected from the rest of the City. “Crown Square, and the larger Old North St. Louis revitalization efforts, embody the principles of smart growth and transit-oriented, sustainable development by rehabilitating structures, utilizing past investments in infrastructure and expanding housing and business opportunities within a historic urban core,” explains HUD in its own profile of the project.
The National Trust for Historic Preservation has recognized the Crown Square redevelopment with its annual HUD Award for Excellence in Historic Preservation.
Overcoming Challenges: One of the largest hurdles for the development team was the up-front acquisition cost of the properties in this historic district. Moreover, when it came time for new construction, blending the new with the old historic properties was challenging. Nearly all of the historic buildings along 14th Street needed significant rehabilitation to ensure their structural integrity. Outdated infrastructure such as the underground sewers needed to be replaced; the old pedestrian walkway needed to be replaced by new multi-modal streets and lighting.
Lessons Learned: Don’t let your critics stifle progress. A redevelopment project of this scale was certainly going to take a lot of time and hard work, and naturally there were residents who were skeptical; not everyone bought into the idea that the neighborhood could be saved—or that banks would be interested in financing a project in such a deteriorated area. The project team chose to ignore detractors and kept the project moving forward; as soon as the first strides were made, residents began to recognize and support the rebirth of Crown Square.
For more information, visit: http://www.onsl.org/.