St. Louis City resident says financing gaps stall redevelopment of vacant buildings across St. Louis

ST. LOUIS, Mo. (First Alert 4) - Two developers tried to save the former Roosevelt Apartments in Dutchtown, but neither could make the financing work. The building is coming down.

Dutchtown, in south St. Louis City, has new affordable housing and a nonprofit grocery store on the way. Hundreds of properties still sit empty.

Dutchtown business owner describes progress and a shooting

Dwayne Nelson, owner of Your Place Diner, said opening a restaurant in Dutchtown was his dream.

“I was looking at my dream,” Nelson said. He said he wanted to give families a place to eat and be entertained. He said he was happy when people started coming during the pandemic.

Nelson said Dutchtown has made strides, but some problems linger. Last month, after his business closed for the night, gunshots rang out down the street. Stray bullets hit two people near the diner. Nelson said they ran inside for cover.

“It was really a heartache because we worked so hard to be a safe place for the community,” Nelson said. “An incident that clearly wasn’t related to us.”

Block-by-block strategy lowers vacancy

In the past five years, a block-by-block strategy has taken shape, with vacancy going from 70% to 30% in part of Dutchtown. The effort uses legal pressure and community partnerships to turn vacant buildings into homes.

Through programs like Go South Side, neighborhoods connect vacant properties with developers like St. Joseph’s Housing Initiative. The group rehabs homes and sells them to first-time buyers. St. Joseph’s has renovated more than a dozen homes, most in Dutchtown.

Roosevelt financing fell through

St. Louis calls this part of Dutchtown an economic justice demonstration area. Dutchtown resident Nate Lindsey, who handles legal services for Dutchtown Main Streets, said the area has opportunity for economic mobility and improved equity outcomes in St. Louis.

“We can’t just say that there’s opportunity here and not follow it up with any tools,” Lindsey said.

Lindsey takes on neglectful property owners in court. He told First Alert 4 that one developer counted on historic tax credits that were not available. A later engineering review found stabilization too costly.

“We lined up receivers,” Lindsey said. “Despite the fact they would receive this property because of the lawsuit, at basically zero cost, the development math did not pencil out because the City and SLDC were not able to provide the tools.”

After fires, reported injuries and a partial collapse, the building was put back on the city’s emergency demolition list.

Incentives exist for large projects, not smaller ones

Asked what one tool would immediately change the landscape, Lindsey said incentives like TIF or lower-interest loans are not available at the scale of a project this size.

“We have them at massive scale — Cleveland High School, a $60 million-plus project,” Lindsey said. “The majority of vacancy doesn’t fall in that range. It falls closer to an 8-to-12-unit multifamily like this, where the city said, we don’t have anything for you at all.”

Emails from the St. Louis Development Corp. (SLDC) describe a gap in financing tools for projects this size. In a Feb. 2 email, Zach Wilson, SLDC’s vice president of incentives, wrote, “We lack a dedicated fund to assist with actual financing.”

Wilson also wrote that the construction sales-tax exemption is not a viable bridge unless a project exceeds $5 million. He wrote that smaller projects can struggle to pencil out without historic or low-income housing tax credits, particularly with the requirements tied to tax abatement. Wilson wrote that such projects “often struggle to pencil out.”

SLDC declined an on-camera interview. It said it has helped advance other projects, including Marquette Homes, with tax abatement; stabilization work at Cleveland High School; and the Virginia Theatre.

Vacancy data

SLDC, citing Vacancy Collaborative data, said there are 346 vacant buildings in Dutchtown alone. Collaborative information shows 99% of vacant parcels are privately owned.

Citywide, the Vacancy Collaborative lists 22,175 vacant parcels, made up of 8,900 buildings and 13,275 lots. The collaborative says they cost $19.6 million in unpaid taxes, fees and maintenance over three years.

Lindsey said the city and SLDC need to be on a unified front.

“There is nothing I hate hearing more than either the city of Saint Louis or SLDC saying that they are not on a unified front,” Lindsey said. “They have to be on a unified front for us to succeed. And every time SLDC points the finger and says we’re not the city, they’re doing a disservice to every Saint Louisan out there.”

Inspections and enforcement

Ward 3 Alderperson Shane Cohn said another problem is that the city Building Division does not proactively inspect properties. Inspections happen only on permit or complaint.

“The city does not do proactive inspections on buildings period,” Cohn explained. “It’s putting the burden on our residents instead of the city.”

Cohn said St. Louis has no comparable dedicated fund, while Kansas City puts nearly $1 million toward vacancy litigation.

“We don’t do that in St. Louis, and we have a larger vacancy problem than Kansas City,” Cohn said.

Cohn said he worked with SLDC and others to secure $500,000 for Legal Services of Eastern Missouri over two years. He said the lack of enforcement can undercut neighborhood efforts.

New City Building Commissioner Sarah Mangapora told First Alert 4 it is a priority.

“The number one thing that’s going to make these buildings become less of a nuisance is investment and development and people that care,” Mangapora said.

What’s next for Dutchtown

Nelson said successes are emerging in Dutchtown, including an influx of new housing and a nonprofit grocery store going up down the street from his diner.

“It’s like a dream come true,” Nelson said.

“The next two years, what I see is us being like... a place where people want to come to see, want to come to spend money, want to come to live,” Nelson said. “That’s what I see.”

Neighborhood leaders say of the 370+ vacant properties remaining in Dutchtown, about 150 are targeted for redevelopment. Residents say they can only tackle a dozen properties each year.

In November, Tower Grove CDC launches its Vacancy-to-Vibrancy initiative with PNC Bank. The initiative focuses on South Grand from Meramec to Chippewa.