America's forgotten 'doom loop' city: St Louis

$205 MM downtown skyscraper just changed hands for $4 MM. At that price, it should be competitive for conversion to low-income housing.

intercst

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This is perhaps a unique situation. I’ve commented on this previously…

The structure in question is the One Bell Center tower, a 44 story building completed in 1986 which served as the HQ of SBC before that function moved to San Antonio in 1993 then bought up AT&T and assumed that name then screwed over the city of San Antonio by then moving the HQ to Dallas. AT&T began pulling workgroups out of the building in the early 2000s and had completely abandoned it by about 2014.

The tower was built along a row of buildings SBC/AT&T owned on that street. A data center at 801 Chestnut, the tower at 909 Chestnut, their original HQ and downtown central office building at 1010 Pine, a 4-storey parking garage west of 1010 Pine then another bland office building west of the garage. All of the buildings were interconnected with skywalks at the 3rd / 4th floor levels allowing the parking garage to be accessed by those fortunate enough to earn garage parking.

AT&T still owns the data center and 1010 Pine but if the tower is not owned by the same company, people who work in the tower are on their own regarding parking and the skybridges were removed about five years ago because AT&T rightly didn’t want non-AT&T personnel with walk-in access to the interior of a critical data center and central office building.

The building has 1.4M square feet but floors #1 and #2 are the elevator lobby, #3 is a cafeteria and #4 and #5 were set up as dozens of conference rooms. Only #6 thru #44 were office space and of course #43 and #44 were combined into executive space. That results in about 31,800 square feet per floor. I worked there from 1994 to 1999 and all of the office floors were configured IDENTICALLY with 6 foot x 6 foot cubicles in one of three color schemes… Red / green / blue cubicle fabric with red / green / blue polka dot carpet tiles with subtle tan as the polka dot color. I think about 3500 people could work in the building in that configuration.

With AT&T not using the building and isolating it physically from access to a parking garage, the underground parking at the building is probably only enough for 10-20 executives which means 3490 other employees will have to walk at least 4-5 blocks to reach the nearest parking of ANY kind. That’s a no-go under normal conditions due to 100 degree heat and -5 degree cold. In St. Louis’ current economic and social condition, that’s a never-go for any employer that gives a hoot about its employees.

The ONLY positive aspect of the building’s location is that there is a Metro Link station under the data center building to the east that could make car-free travel viable but Metro Link routes don’t terminate in the suburbs where young trendy workers might want to live. At best, the routes take you to commuter parking lots located either by the Airport or East St. Louis, neither an enticing place to be after dark.

The worst part of the building? Neither SBC or AT&T spent ONE PENNY on maintaining the building since the day it opened. I stopped working there in January 2000. Nothing had changed in the building since it opened in 1986. I encountered a collegue I worked with when at SBC who later came to work for the company I was working with in 2014. I asked her how AT&T / SBC was. She said, “Do you remember what it was like when you were there? It’s EXACTLY the same.”

That means there is NOTHING in the building that allows a new owner to start capturing lease revenue by moving in a few business tenants while they figure out how to rehab the entire complex.

There’s really no obvious path to a productive use of the building. Currently, it just serves as a massive monument to the arrogance of constructing any one building that large. And, of course, a massive flip of the bird from CEOs Ed Whitacre and Randall Stephenson to the city. Honestly, the city should tear it down.

WTH

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Sure there is. Best possible use = sell it to Elon Musk for $2B so he can use it as his personal HQ. Up to him after he owns it.

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At the same time, the linked article tells us that since 2012 “a collection of the region’s largest office buildings have dropped nearly 24 percent in appraised value, according to a 2022 analysis by The St. Louis Business Journal.”

Add in 29% inflation over the 10 years and you have more than a 50% drop.

“St. Louis has seen the worst recovery in foot traffic to its downtown area of all other major US cities since just before the pandemic broke out in 2019.”

DB2

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A recent article in the Wall Street Journal told the same story. They are speaking of the downtown area where department stores used to be. That is east of Tucker Blvd (12 th street) and north of market.

South of Market is anchored by Busch Stadium. It brings nice crowds when the Cardinals are winning.

Out by Jefferson we have new soccer stadium. Doing well. Also large Wells Fargo site former AG Edwards hq. And federal mapping site expected soon. Should bring much development.

Grand Avenue midtown anchored St Louis University. Doing fine. Adding Cortex a center for new business development. Ikea nearby. PBS nearby. New food court just opened.

Central West End anchored by Barnes Jewish Hospital et al. At Kingshighway and across from Forest Park.

St Louis does have white flight and declining population. The central area has growth potential. Its the downtown area that finds itself in transition.

Best possible use = sell it to Elon Musk for $2B so he can use it as his personal HQ.

Remember, the building only has 1,400,000 square feet of space. That’s only enough for about one third of his ego.

WTH

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He can buy the other buildings as he can afford them < g >.

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