The downtown St. Louis skyline.
The downtown St. Louis skyline. James A. Finley/AP

Downtown St. Louis Is Rising; Black St. Louis Is Being Razed

Square co-founder Jack Dorsey is expanding the company’s presence in St. Louis and demolishing vacant buildings on the city’s north side.

As Rust Belt cities struggle to rekindle their growth machines, St. Louis thinks it has hit pay dirt.

While many medium-sized cities have latched onto startup tech companies, incubators, and innovation districts to crank out the next big thing, St. Louis has managed to negotiate the expansion in the city of Square, a major tech company based in the Bay Area, and secure a commitment from its founder to personally fund the demolition of vacant houses.

It’s a victory for stubborn market fundamentalism, but the end result may be further uneven development.

At the end of July, it was announced that Square will invest in a new space and a significantly larger workforce in a “flyover country” hub, St. Louis, where its founders Jim McKelvey and Jack Dorsey grew up. Square has signed a 15-year lease for space in a building that until recently housed the city’s last daily newspaper. Square’s current St. Louis workforce of 500 will grow to 1,400 and the office will open ahead of the National Geospatial-Intelligence Agency’s new headquarters in St. Louis, which is scheduled for completion in 2023.

St. Louis Mayor Lyda Krewson quickly lauded the announcement, proclaiming that “downtown is the core of the region,“ and Square’s move affirmed that. St. Louis, like many other postindustrial cities, has poured hundreds of millions of local, state, and federal direct and incentive expenditures into reinvigorating its downtown. In St. Louis, it is part of an effort to combat the steady decline of the city’s population since 1950.

Most cities have yielded less-than-stellar results from these policies—jobs continue to leave, sports and convention facilities often cost more than revenues returned, and American downtowns often look like half-empty parking lots with a few old buildings strewn around. Still, mayors have remained faithful to the belief that one more subsidy, federally-funded streetscape, or public-private plaza will be the lever that turns back decline.

If St. Louis has found a fix for downtown, then what about its neighborhoods, where vacant buildings are commonplace? The city has some 7,000 vacant buildings, over half of which are publicly owned, largely concentrated in neighborhoods across the city’s north side. These neighborhoods are north of the “Delmar Divide,” a line running west from the edge of downtown along the city’s Delmar Boulevard.  

Good news: Jack Dorsey is going to fix that, too. One week before the Square announcement, Mayor Krewson announced that the city was entrusting some of its blight remediation to a private group, the St. Louis Blight Authority. The St. Louis Blight Authority, a vessel created by Dorsey and Detroit investor Bill Pulte, has begun demolishing 18 vacant buildings in the city’s Wells-Goodfellow neighborhood, alongside 12 buildings wrecked by the city government itself. Dorsey is injecting half a million dollars for the effort.

What could possibly go wrong? The government is off the hook, and the city reduces its sizable number of vacant houses. But all of the demolitions that Dorsey and Pulte are funding are on the city’s north side, while at the same time, the city is funneling millions in tax incentives into development elsewhere. The effect of St. Louis’ efforts will increase the value of central city neighborhoods while demolishing and depreciating the north side. One-third of the city’s approximately 303,000 residents live in north city—the area where the city is concentrating its efforts to demolish its building stock.

These destructive and inequitable policies are not new to the city: In 2009, the city conferred redevelopment rights to 1,500 acres of the north side to developer Paul J. McKee, Jr., who purchased scores of occupied dwellings just north of downtown and emptied them. As the buildings sat vacant, many deteriorated through the work of thieves and arsonists. This process was finally stopped by the city’s termination of its redevelopment agreement with McKee, but not before 97 acres of a residential neighborhood were cleared to build the touted National Geospatial-Intelligence Agency (NGA) project— requiring substantial land dispossession that sent many residents to leave the city altogether.

Another recent project is the Metropolitan Sewer District’s ongoing acquisition of vacant city-owned houses, most in the north side—and the subsequent demolition and replacement of them with passive stormwater retention lots. This project is designed to get the district in compliance with a federal court decree mandating reduced stormwater flow into the city’s antiquated combined sewer system. However, in wealthier and whiter parts of the city, a more expensive separation of sewer waters is underway. Only the poor, almost all-black north side gets erasure.

Lest St. Louis seem singular, it is worth noting that Pulte pursued similar policies in Detroit. An heir to a real estate development family, Pulte founded the Detroit Blight Authority in 2013. Detroit at the time had 78,000 vacant buildings, many more than St. Louis has now, and the administration of then-Detroit Mayor Mike Duggan allowed Pulte to leverage private capital for demolition.

The Detroit Blight Authority (DBA) spent $750,000 to demolish almost all of the building stock on ten blocks in ten days in 2013. According to Pulte, this shock-and-awe urbanism would “open the spigot for investment,” promoting clearance as a capitalist enterprise. There is potential recklessness of a private-sector actor intervening in the destruction of public resources (vacant buildings owned by land banks are in fact a commons whose disposition might be democratically decided in a democracy). Duggan ultimately terminated the DBA’s work, but the reason for dismissal remains unclear.

Geographer Neil Smith warned long ago in his book The New Urban Frontier that gentrification is not a process where all of a place becomes overdeveloped and most housing becomes overpriced for working people. Instead, Smith noted after studying American patterns, the high valorization of some neighborhoods required the depression of others. While Detroit continues to lose population, its central corridor from downtown to Wayne State University has seen tremendous re-valorization and reversal of decline. Post-bankruptcy Detroit has become two places: a small and very hip renewing area, and a larger, poorer area where demolition remains the city’s primary instrument of social compact.

Resolute public planning can counter this. The Detroit Blight Authority’s work has been tempered, in small part, by the city’s investment in a public comprehensive plan, Detroit Future City, adopted in 2014. It advocates a patchwork approach with clearance balanced by rehabilitation and stabilization.  

But St. Louis and its peer Rust Belt cities have long shunned such market restraint. In St. Louis, the lure of magic solutions delivered by the market remains hard to shake. The city has no vision for its future beyond a tired cocktail of market fundamentalism and crisis governance incapable of delivering much good to most of its working residents, and in fact, it denies them opportunities to increase wealth or quality of life.

Imagine if the city had secured a fund from Dorsey and Pulte to create micro-grants for small business startups—or home repair dollars—in the same north city neighborhood. Imagine if St. Louis and Detroit counted progress in some other way than number of vacant buildings demolished and number of downtown jobs added this year.

As coastal real estate costs send companies like Square to places where business is more affordable, flyover and Rust Belt cities now face a new challenge. Used to assuming that their conditions were a state of emergency requiring crisis management and austerity policies, these cities will have to decide whether to manage growth in new ways that avoid the deepening of internal divides—and the creation of new ones.

*CORRECTION: An earlier version of this piece said that the National Geospatial-Intelligence Agency’s new headquarters will be in downtown St. Louis. It is to be located near downtown St. Louis.

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