Yesterday’s earthquake may have actually been the tremors felt after the collapse of one of the city’s biggest developers.
Steve Patterson of the Urban Review St. Louis blog was the first to report that employees of Pyramid Companies, owned by developer John Steffen, were given their final paychecks yesterday.
Employees were, I’m told, given final paychecks and told to cash them quickly.
Pyramid owns several high-profile properties downtown, including the Arcade Building on Olive Street, Dorsa Lofts on Washington Avenue, and the Jefferson Arms on Tucker Boulevard. But the Post-Dispatch reports today that Pyramid’s largest project (which through a controversial decision by city leaders also weighs on the City of St. Louis’ credit rating), the $400 million Mercantile Exchange, which includes the former St. Louis Centre mall, will move forward without Pyramid.
“We have taken over management of the partnership,” said Amos Harris, president of Brady Capital, local partners of Connecticut-based Spinnaker Real Estate Partners LLC.
Spinnaker was Steffen’s equity partner on St. Louis Centre and the former Dillard’s building, both key components of the larger six-block Mercantile Exchange project. Steffen was in charge of the daily decision-making.
Spinnaker recently increased its investment by 50 percent to roughly $16 million. As costs continued to increase, Harris said, “we took over.”
Steffen’s financial troubles have long been rumored in the city’s political circles. Steffen has been a regular contributor to key city officials, including Mayor Francis Slay, and is rumored to have financially backed two local newspapers, the St. Louis Argus and the now defunct Arch City Chronicle. But it was the Board of Estimate and Apportionment’s 2006 decision to have the city essentially co-sign Steffen’s $14.5 million loan application to finance his St. Louis Centre project that most invited the ire of bloggers and public policy watchers.
Comptroller Darlene Green, one of the three members of the Board of E&A, warned against the Steffen deal, but was outvoted by then-Aldermanic President Jim Shrewbury and Mayor Slay.
April 19th, 2008 at 1:10 pm
This is just another incident which indicates why that damn Slay should be recalled! Steffen was Slay’s “boy” to get this sweetheart contract against the wishes of our great comptroller Darlene Green!This contract seems to me like a political payoff to Steffens for his financial support of that damn Slay!More egg on the face of that damn Slay,he seems to me to be so incompetent as Mayor!After his recall maybe that damn Slay will move out the country to be exiled in Siberia!
April 19th, 2008 at 4:32 pm
In the long term the economy is unpredictable. This is why government shouldn’t put their credit on the line for private projects. In the short term I’m very worried about the state of DT’s residential market, but this recession will end eventually.
April 19th, 2008 at 5:56 pm
Although the St. Louis Centre deal was not ideal, I’d be hard pressed to think of another developer who would have touched what remains quite an albatross. While Steffen plays politics, he also goes where other developers are too conservative to go.
April 19th, 2008 at 6:38 pm
That’s very true, Michael. Developing can involve a great deal of risk and Steffen, along with some other notable developers, deserve the bulk of the credit for the renaissance that’s occurred in parts of the city.
April 19th, 2008 at 10:10 pm
Wow, “and told to cash them quickly”. That’s pretty harsh.
April 19th, 2008 at 10:48 pm
I wonder if this has anything to do with Auditor Montee’s recent criticism of the tax credit program? He was a major participant in the program. It is unfortunate that so much of the commerical development these days can’t stand on its on two feet and requires the transfer of wealth from the taxpayers to private developers. Downtown St. Louis will never return to its previous halcyon days until the city can figure out how to wean itself off the earnings tax.
April 20th, 2008 at 10:07 am
Hey flyover, when were the halcyon days of downtown? I sure don’t remember. Maybe it was during the riverboat days, I don’t know because I was not born yet.
April 20th, 2008 at 3:53 pm
This project has a pulse because of the city-back TIF. If this was a simple TIF or just tax credits, the project would be dead and we would be looking at an empty St. Louis Centre for the next 10 years. Instead, it may be the only major project in Downtown to move forward.
April 20th, 2008 at 5:29 pm
I worked there in the early 70’s, it was pretty happening then. Stix and Famous were crowded. There were clubs and small merchants and a lot of places to eat and drink, but the sidewalk rolled up after work, for the most part. Obviously, the Halcyon days were the twenties thru the forties. I had a company in midtown in the late eighties, but moved out to Clayton due to the constant harassment of the revenue inspectors who audited us three years in a row, the standpipe inspector (who wanted fifty bucks a year even though I didn’t own the building), the fire inspectors were rude and threatening. When I moved out to the county, once a year the fireman came and walked through with the dalmation, handed out plastic hats for everyone’s kids and if he saw a fire extinguisher that was out of date, he’d politely pat you on the back and ask you to get a new one. Totally different attitude. In the city if it snowed, we couldn’t get to work because the City snow removal strategy for side streets was “it’ll melt sooner or later”. I personally think downtown is dead and is only attractive to companies who can’t afford to go anywhere else and then only when when they get freebies. I think Clayton is the new de facto downtown.
April 20th, 2008 at 10:51 pm
Flyover, Why don’t you just be honest and admit you got mugged? Have fun in Clayton with all the Cougars.
April 21st, 2008 at 8:40 am
i got mugged by your corrupt City government. The only Cougars with which I have any contact these days are at SIUE. I am currently retired on Ladue Road so I couldn’t care less what happens in the city these days. Whoever the economist was who said that at some point the city will get so bad that it will be attractive again is correct. I think people started to hope that a few years ago, but as I always told my employees, “hope is not a strategy”. The credit crisis will delay any recovery by years if not a decade. Until the city’s two factions stop this “its my turn to fleece the city” attitude, the city will remain irrelevant.
April 21st, 2008 at 9:14 am
No, I’m pretty sure you got mugged the old fashion way.
“I am currently retired on Ladue Road so I couldn’t care less what happens in the city these days.”
Well if that’s truly the case, I’m sorry retired life is so boring that you still spend your time reading blogs about the city.
April 21st, 2008 at 9:19 am
Corrupt City Government? A valid observation. Hardly that Clayton is any better though.
Clayton is homogenously full of ugly buildings. Downtown also has a lot more foot traffic in my opinion.
Have fun on Ladue Road.
April 21st, 2008 at 9:49 am
Otto, you are free to engage in any fantasies you like, however if you knew me you would not beleive that one. You probably believe a Democrat is a Republican who hasn’t been mugged yet. It is possible to become a Republican without being mugged by a robber, it is very possible to be mugged by government, especially a government trying to maintain its staff full of cousins and brothers-in-law at levels it doesn’t need anymore. I didn’t move because of the crime, I moved because of a lack of city services and a bad attitude toward business. You, sir, seem to be the one fixated on the crime.
Doug, I don’t live in Clayton. If I did, however, I would vote against those people who tried to use eminant domain against those private owners. I’m not that interested in the architecture, although the condo building next to the Ritz is pretty impressive.
I try to stay informed and read many blogs, as you do, I thought I would give this one a try after reading about it in the Business Journal. So far, its not very impressive. One or two stories a day isn’t going to cut it. I also hope all the stories are not going to be about the City. There are millions of people who live in other parts of the area. What we really need is more suburban coverage.
April 21st, 2008 at 4:50 pm
Flyover, Thanks for your comments. I’m sorry your business experience 30 to 40 years ago was a bad one. I wish you luck in finding a PUB DEF suburban edition. I’m sure Antonio has thought about it, but it’s probably too hard to keep up with 80+ municipalities, 80+ mayors and several hundred councilmen.
April 21st, 2008 at 8:44 pm
Thank you, my palindromic pal. If this is going to be a City blog, it will bomb. Advertisers don’t care about who is running for alderman because 90 percent of the people in this region don’t care who is running for alderman and there is already another website that does that. My understanding was this was going to cover things the paper doesn’t bother with anymore. Whatever they cover, they need to start pumping out some more content.
My bad experiences were more like 20 years ago, I’m not that old. I ultimately ended up in the West County corridor because the cost of parking in Clayton got to be too expensive as the company grew. It was great out there.
April 21st, 2008 at 9:09 pm
Flyover,
This isn’t a new blog, you know. It’s got its niche and its doing fine.
April 22nd, 2008 at 12:22 am
everyone knew about this guy. another big shot acting guy. how could slay not know this.
this may explain why this guy was so angry all the time. this is an indication that a lot of political followers will soon go down with him.
April 22nd, 2008 at 8:46 am
good for them.
April 23rd, 2008 at 6:32 pm
I’ve complained for years about Steffen’s lack of loyality to Democrats, the ones who helped him get where he is (was). Steffen kissed up with big bucks to Dems then switched gears when the Repubs came in donating an astonishing amount of money to them. I suggested he stay with his party but I guess Steffen knows best. Go ask Peter Kinder, Matt Blunt and Sara Steelman for help now.
April 28th, 2008 at 12:18 pm
I guess this was to be expected. Afterall, Steffen was an investor in the Arch City Chronicle. It failed too.