Jack Grone is editor of McPherson, an independent journalism start-up based in St. Louis. He is a former reporter and editor for Dow Jones Newswires whose writing has appeared in The Wall Street Journal and Barron’s.
Commercial investment and residential buy-in are helping some St. Louis neighborhoods rebound, but the disparities between neighborhoods are stark.
Today, just as it did in 1931, the unmistakable edifice of the Chase Park Plaza overlooks Forest Park as an entire city’s monument to refined living. The eight decades of history forever linked with the Chase now serve as prologue to yet another historic moment: the opportunity for the most prestigious address in St. Louis to become your permanent address.
This is the text in a slick hardcover book pitching “The Private Residences” at the Chase Park Plaza to prospective buyers a decade ago. In 2006, the owners of the property—a historic but shopworn apartment building that had come to symbolize the long decline of the city of St. Louis—embarked on a four-year, $80 million renovation to convert the upper floors into luxury condominiums. Few knew it at the time, but this was the height of the property bubble across the U.S., and asking prices for the new condos at the Park Plaza reflected this, ranging from $500,000 to well past the $4 million mark.
To the sales team’s credit, the marketing copy wasn’t complete hyperbole. The 28-floor Park Plaza is indeed a superb example of Art Deco design; it would look right at home on Manhattan’s Central Park West. With the attached 1920s-era Chase Hotel and its restaurants, ballrooms, and cinema, the tower anchors St. Louis’s Central West End.
The Park Plaza’s developers sold the last condo for $2.5 million two years ago; today, the building contributes to a cosmopolitan vibe that’s missing from most of the city’s other neighborhoods. It’s home base for hundreds of residents and visitors who patronize restaurants and recently opened storefronts operated by the likes of Bonobos, Warby Parker, Shake Shack, and Whole Foods.
But last year, quietly—no splashy marketing push this time around—the Central West End neighborhood witnessed another historic moment. After 35 years of either full or partial tax abatement, the Park Plaza returned to the city’s property tax rolls as a fully paid-up member. The private owners of the tower’s 77 condo units and the commercial owners of a mix of hotel rooms and corporate apartments on the lower floors paid real estate taxes for 2017 totaling more than $1.6 million, according to the city assessor’s website. The Chase Hotel contributed an additional $1.4 million.
There’s something else about the Park Plaza which may not be historic, but is certainly noteworthy. With its full value now reflected in public records for the first time since the condos were built, it turns out that this single tower was worth more in 2017 than the individual values of some entire neighborhoods in St. Louis.
How many, exactly? Based on the latest available data, around one-third of the 79 official neighborhoods designated by the city.
“It’s pretty extreme,” says Todd Swanstrom, a professor at the University of Missouri-St. Louis who focuses on urban policy and community collaboration. “It’s striking evidence of the extraordinary inequality across neighborhoods in St. Louis.”
The Park Plaza, according to a review of the city’s tax records, has an assessed value of $17.6 million and an estimated market value of about $87 million. (In St. Louis, the assessed value is calculated as a percentage of market value; assessed value is what matters for tax purposes.)
At $17.6 million, the Park Plaza’s assessed value is close to four times the $4.5 million total assessed value of all commercial and residential properties in The Ville, the historic-yet-faded African-American neighborhood on the city’s North Side that gave rise to music legends Chuck Berry and Tina Turner; it’s now home to about 1,900 people.
The Park Plaza is also worth more than the assessed value of all of Hyde Park ($9.2 million), an emerging turnaround story, also on the North Side, that has benefited from growing investment in recent years. The Park Plaza is even slightly ahead of Fox Park ($16.7 million), a rising South Side neighborhood where rehabs and new co-working spaces are emerging.
A few caveats: The neighborhood values come from a 2016 report on economic development incentives prepared for the city by the PFM Group of Philadelphia. That report is based on assessed values for 2014, whereas the Park Plaza figures are from last year. (St. Louis City Assessor Stephen Conway says his office has 2017 figures for the entire city, but not broken down by neighborhood.) Neighborhood sizes also vary widely across St. Louis; some neighborhoods have very little commercial activity and fewer than 2,000 residents. (I chose to use the Park Plaza condominium tower as the basis of comparison, rather than the entire Chase Park Plaza complex, because the Park Plaza’s residential use profile more closely tracks that of the city’s neighborhoods.)
Most of the neighborhoods worth less than the Park Plaza tower are on the city’s North Side, which has long struggled with concentrated poverty, crime, unemployment, and vacant homes. Less than a mile separates some of these areas from the Park Plaza. The disparity “may say as much about the decline of these other neighborhoods as it does about the growth and expansion of the Central West End,” Swanstrom says. “Both are occurring at once.”
St. Louis has many of the same problems as other older, industrial U.S. cities, with a history of racism and highway-building that divided communities and displaced residents. In sheer percentage terms, St. Louis has lost more of its population that almost any other city in the country: According to the most recent Census Bureau figures, the city’s population in 2017 was about 308,000—down by more than 60 percent since 1950.
But a particular problem in St. Louis, according to Swanstrom, is the way affluent areas bump right up against areas where underlying land values drop away quickly and dramatically. See the city’s infamous “Delmar Divide,” named for the street that separates the Central West End from poorer neighborhoods to the north.
On some blocks, imposing houses just south of Delmar can sell for $600,000 and higher; easily visible from their bedroom windows are fast-food joints, vacant lots, and houses that sell for $60,000 or less. Five neighborhoods immediately north of Delmar—Academy, Fountain Park, Lewis Place, Vandeventer and Visitation Park—are each worth less than the Park Plaza.
To some extent, the disparity reflects the success St. Louis officials have had in recent decades luring middle-class and affluent residents to the Central West End and other neighborhoods near Forest Park. This new prosperity—still limited to a minority of neighborhoods—is often overlooked in news stories about the city’s crime rate or its status as the nation’s capital of sexually transmitted infections. The new investment has been substantial: Building permit records show the Central West End alone received almost $4.5 billion in investment between 2000 and 2014, according to the PFM report.
The boom has been fueled in large part by construction at Washington University’s medical center. But it also reflects more than $250 million awarded to private developers in the neighborhood via state and local real estate incentives, including tax abatement and tax increment financing (TIF) districts—far more than any other residential neighborhood has received.
Hyde Park, for example, got only $43 million in real estate incentives during the same period. There’s now fractious debate underway in St. Louis about how incentives are awarded and whether they’re truly benefiting the entire city, or only those neighborhoods where the incentives are no longer needed.
“St. Louis is kind of on a precipice right now,” said Heather Navarro, who took office last July as alderwoman for St. Louis’s 28th Ward, which includes the Park Plaza. “We have some great opportunities which can keep us moving forward, but in other areas we are really falling behind.”
Navarro applauds the city’s progress in rebuilding its tax base and in passing guidelines for the use of incentives. But she says that St. Louis needs to learn from other cities that have addressed disparities through mechanisms like mixed-income housing and higher minimum wages (the city’s attempts to raise its minimum wage were quashed by Missouri state legislators last year). Navarro also wants St. Louis to approach development from a citywide perspective: The current approach effectively makes each member of the Board of Aldermen a development czar in his or her own ward, fostering fragmentation.
“What’s happened with the Chase Park Plaza really shaped a whole section of the Central West End; the fact that there’s a new hotel planned right around the corner is a sign of that progress,” Navarro said. “It was a smart move to focus on that area. Now we need to push it out to other areas of the city.”
The Chase Park Plaza received two consecutive tax abatement deals that granted a mix of full and partial tax relief from 1982 through 2016. Some of those incentives are still in effect, thanks to a separate tax increment financing (TIF) district that includes the entire Chase Park Plaza complex. Under the terms of the TIF, the city’s schools, museums, and libraries aren’t due to begin receiving the full amount of the annual $3 million in property taxes being generated by the hotel and condos until 2021. Instead, that tax money is now being put into a special fund to pay off bonds that were used to finance a municipal parking garage and other improvements in the TIF district.
Many city aldermen and the St. Louis Development Corporation, the city’s economic development arm, say big projects like the Park Plaza would not get off the drawing board without tax incentives. They also point out that established neighborhoods are much less dependent on incentives than the city’s poorer areas, which benefit from state tax credits designed to support low-income housing. (The distribution of these housing tax credits is a separate controversy.) In the Central West End, the ratio of total real estate incentives to building permit activity was only 6 percent between 2000 and 2014, according to the PFM report. That compares to 17 percent in The Ville, 44 percent in Fox Park, and a whopping 75 percent in Hyde Park.
One Chase Park Plaza resident, who asked for anonymity to avoid upsetting his neighbors, said the abatement was a big selling point when he bought his condo in 2009.
“I think some of the tax credits the city gives are ridiculous,” this resident said. “But the Central West End was a lot different before they renovated this building. This was a huge project for the neighborhood, and a lot of people moved from [suburbs in St. Louis County] to live here.”
The homeowner said some of his neighbors thought the city demanded taxes that were too high last year, when their properties were assessed for the first time at full value. About 10 condo owners appealed, but the city stood its ground, for the most part. In the end, the city agreed to marginally reduce taxes for a few residents, but denied the rest of the cases; eventually, the remaining appeals were dropped, according to another person familiar with the situation.
St. Louis has had success reviving plenty of neighborhoods well away from the Central West End. On the South Side, for example, neighborhoods bordering Tower Grove Park have seen some of the city’s biggest recent increases in property values. And on the North Side, the National Geospatial-Intelligence Agency is preparing to build a $1.7 billion new campus in the St. Louis Place neighborhood. The project’s boosters hope it will be a catalyst for new development in some of the city’s most impoverished areas.
If city leaders are serious about raising their game across St. Louis as a whole, they’ll need to move quickly. The PFM report shows that 17 neighborhoods declined in terms of assessed value between 2000 and 2014, even notwithstanding inflation. Three were down by almost 40 percent.
Danger signals like these underscore Navarro’s point about St. Louis being on the edge. Recent census figures suggest the city’s population is stabilizing, but job growth is tepid, and two in five of the city’s neighborhoods show virtually no signs of growth. Meanwhile, the acrimony over development incentives, coupled with the perception that the city’s poorest residents are being left behind, has aggravated regional wounds that still linger from the Ferguson protests in 2014. It’s not clear if those wounds will ever heal completely.
Despite this, the Central West End is dotted with building sites, and the Park Plaza shows no signs of losing its status as the most prestigious condo address in St. Louis any time soon. The same year Ferguson was making headlines, construction permit records show that the owner of one million-dollar-plus condo in the Park Plaza, perhaps mindful of the building’s history, was spending a few thousand dollars on his own monument to refined living—a charging outlet for a Tesla.