On a clear March day in downtown St. Louis, young professionals and preservationists unfurled their signs, pulled out bullhorns and called the media for an old-fashioned rally. About 100 members of Metropolis and Build St. Louis marched up and down the 900 block of Locust Street, waving signs and chanting. "Save our Syndicate!" they shouted. "Parking lot? I think not!" The focus of their efforts was the Syndicate Trust building, a hulking brick-and-terra-cotta 17-story skyscraper and its attached property, the 100-year-old Century Building, which occupy the entire block directly west of the Old Post Office. Both structures, considered pivotal in the development of the central pocket of downtown, could soon have a date with the wrecking ball if owner Mark Finney gets his way. Where the Syndicate now stands, Finney envisions a state-of-the-art parking garage that will hold more than 1,000 cars. Finney's vision has preservationists seeing red.
Several protesters were waving signs reading "Demolish Finney" and "Finney have a heart."
Unfortunately, it was a case of a right cause and a wrong villain. The protest would have been more appropriate had it been held on the steps of City Hall. For the past eight years, since Finney bought the building, the city has stopped him from demolishing the building. But it has never bought it from him or found a developer willing to pay market price.
"If someone wants to save the building, then they can step up and buy it," Finney says.
And he couldn't care less if he is viewed as the antichrist of historic preservation.
"I'm a businessman," he says. "The only reason I'm called greedy and people don't like me is because they haven't been able to get me out of my position. That includes the city, the preservationists and all the other forces who have tried to move me off."
The new administration of Mayor Francis Slay and his development czar, Barbara Geisman, promises to get downtown projects going. They've been negotiating with Finney for several weeks now. So far, no deal. The last two mayoral administrations also came into office vowing to develop the Syndicate Trust Building. The promises proved as empty as the 17-story building looming over the corner of Ninth and Pine.
Walking down the central corridor of downtown, around the Old Post Office square, it is easy to see the significance of redeveloping the Syndicate Trust. The area is rich with historical architecture but short on vibrancy. Vacant old buildings with ornate cornice work and swirling cartouche motifs can be seen through large wooden fences painted with bold urban art. Many have scaffolding surrounding the first two floors, giving the feel of an unending remodeling project. There are glimpses of hope. The construction site for the new convention center hotel bustles with the roar of a backhoe. 'For Sale' signs for Loftworks condos are visible in the upper windows of Locust and St. Charles streets. Foot traffic, however, is mostly generated by pedestrians waiting for Bi-State buses. Few, if any, walk the streets just to shop. If they do, they must navigate an ominous chain-link-and-plastic fence blocking portions of the sidewalks.
This is a far cry from the early 1900s, when urban life centered around the Old Post Office, which was completed in 1884. Its opening effectively shifted downtown west from the river's edge. Between 1887 and 1907, more than 75 office buildings were erected in the new downtown business district, a speed rivaling that of contemporary Chicago. With its wrought-iron ornaments at every floor, the Syndicate Trust opened in 1907, adjacent to the Century Building, a limestone theater, built in 1896, with arched windows facing the Post Office. The first eight floors of the Syndicate Trust housed the famous department store Scruggs-Vandervoort-Barney. Naysayers predicted the store would close in less than a year because it was too far west but were silenced the moment the store opened its doors. The press heralded it as "the acme of Twentieth Century triumph in department store making." By 1912, the two buildings were connected by a seven-story addition, and they have been considered a massive single structure ever since, with 705,000 square feet.
Over the years, the building has housed historic tenants as well. On the 10th floor, the Equal Suffrage League of St. Louis planned strategies to extend the right to vote to women. Among the League's first members were Kate Chopin, author of The Awakening, and Charlotte Eliot, mother of poet T.S. Eliot. In the late 1950s, the Congress of Racial Equality protested the lack of African-American clerks at the Scruggs store and demanded the opening of its restaurants and lunch counters to black customers.
By the late '60s, the call of suburbs and strip malls started taking a toll on downtown. Scruggs closed in 1967, spawning a decline from which downtown has never really recovered. In August 1971, a Post-Dispatch article lamented the less-than-50 percent occupancy of the Syndicate Trust, quoting real-estate agent William Hirschi, who was confident he could turn it around. "You might call me a specialist in taking over a sick building and filling it," he said. Filling it proved easier said than done. Such tenants as Southwestern Bell, Cass Bank and Hellmuth, Obata & Kassabaum came and went. An interior renovation of the building in 1980 did little to improve the situation.
When Allan Pullman bought the building in 1986, things went from bad to worse. Pullman, a Philadelphia entrepreneur, was already under scrutiny for questionable real-estate deals in his home state. He bought the Syndicate Trust with a $26 million loan from the New Jersey-based Howard Savings Bank (whose chairman was Pullman's friend), based on an appraisal of $41 million. Pullman racked up delinquent property taxes and, in 1988, defaulted on the loan. That same year, the building was reappraised as being worth no more than $17 million. The Federal Deposit Insurance Corp. accused the bank's lawyer of approving the loan, even though he knew the 1986 appraisal was inflated. Steve Cousins, the attorney who handled the bankruptcy, says a three-year court battle ensued when Pullman attempted to file for bankruptcy to prevent the bank from foreclosing on the property. Howard Bank was declared insolvent in 1992, and the feds held two auctions to sell the building, but the bidders (including one who had bid $2 million) couldn't line up the financing.
In 1993, at a third auction, a 38-year-old real-estate speculator was the sole bidder on the property. Mark Finney, owner of the Conlon Group, bought the entire block in the heart of downtown for the bargain price of $625,000.
A wiry man with an abrasive edge, Finney knew that buying a 705,000-square foot building in a prime downtown location made financial sense. The bargain, however, came with a hidden price tag -- a legal battle that has pitted Finney against the city and its agencies for eight years. Nevertheless, Finney believes the Syndicate Trust has been worth the legal hassles. "I felt I paid what it was worth," he says. "The operating costs for the building were a couple million a year, so there was some exposure. But it was less than $1 a square foot, and I knew if I could get operating costs down, it could be a good buy. It turns out it has been, even with all the headaches." The headaches began when Finney announced he wanted to tear the Syndicate down and put up a parking garage, a position that has even the mildest-mannered preservationist pasting his image on dartboards.
"I find it absurd that anyone would allow it to be torn down for a parking lot," says Margie Newman, whose condo overlooks the Syndicate. "Downtown doesn't need more parking lots. It needs more housing that will draw people who will revitalize downtown."
Finney isn't concerned with revitalizing downtown. He simply cares about making a buck. "We are here to make money for our shareholders and for our corporation," he says. "It is not our job to save old buildings."
In 1994, Finney was willing to at least try preserving the façade of the building. In fact, in March of that year he signed an agreement with the St. Louis Land Clearance for Redevelopment Authority to proceed with a $2.6 million plan to gut the first six floors of the building for a parking garage. In exchange, he got a 10-year tax abatement under the stipulation that any changes to the plan had to be approved by the St. Louis Board of Aldermen. Finney hired architect Richard Claybour to oversee the project. Claybour had been involved with the renovation of the Syndicate in the mid-'80s and came highly recommended. It would prove to be a decision they both would regret.
Claybour still believes the Syndicate Trust can be converted into the "most beautiful and unique parking garage in the city. It has high ceilings and nice windows," Claybour says. "One of the advantages was that we could preserve the windows. It was a natural fit. Maybe it was not the most glamorous use, but it would have been useful and it would have saved the building."
The garage conversion never happened. Finney and Claybour disagreed on whether the building was structurally sound enough to host a parking garage.
"The weight of a Bobcat broke through a slab," says Finney, shaking his head in disgust. "That tells me the building is structurally inadequate for a parking garage. That tells me I don't want to park hundreds of cars in there." Finney says he brought in structural engineer Mike Falbe from Chicago. "He [Falbe] went back and did things that should have been done earlier," Finney says. "He found the building couldn't support a parking lot." To shore up the structure, Finney would have to invest an additional $1 million, something he wasn't willing to do. "Yes, I could have fixed it," Finney says. "You can fix anything. You could wrap it up in the space shuttle, shoot it up into orbit and save it forever. Most anything is possible, but that doesn't make it economically feasible."
Claybour says Finney made a crucial mistake by having the wooden floor ripped up over concerns about waterproofing. Tearing up the floor made it more difficult for the load to be distributed evenly throughout the building. Claybour also says Finney greatly exaggerated the extent of the structural flaws so he could justify tearing the building down. "What really happened is that the owner lost interest in the project, although he would never say that," Claybour says. "One wheel of the Bobcat sank 6 inches in a spot we knew was weak -- a spot that was going to be torn down for a ramp. When we worked on the building, we went through a whole series of investigations and lengthy structural analyses. All the information we kept getting just made the feasibility of the project stronger."
Finney and Claybour are both tight-lipped about the three-year court battle, which still has both seething. Claybour sued Finney for $17,000, money he says he was owed for his work. Finney countersued for $1.7 million, charging that Claybour was negligent and ruined his building. On Nov. 20, 1997, the case was settled out of court, and Finney was paid $158,022.
In any case, after the Bobcat incident, Finney stopped the renovation, triggering a murky saga of legal battles, this time with the city.
On the heels of the failed garage project, Finney tried to auction the building with its first six floors gutted. Not surprisingly, there were no bidders. Finney decided to demolish the building to build a surface lot. But demolishing an architecturally significant century-old building in a key part of downtown isn't easy. Finney needed the approval of the city's Heritage and Urban Design Commission. He was denied a demolition permit -- twice. "We had all the tests done," he says "We flew in structural engineers who testified before the commission that the building was unsound. They just didn't get it. They denied us, then they denied us again. I don't know what they expected us to do -- we couldn't get an occupancy permit because the building has no live load, and we couldn't get a demolition permit. We basically had a building we could not use."
Finney didn't give up. Assisted by his brother Dan Finney, a lawyer, he took the fight to court -- and away from St. Louis. A quirk in Missouri law allows anyone fighting the city to file an appeal in Cole County, the county seat of state capital Jefferson City. In March 1995, Cole County Circuit Judge Byron Kinder ordered St. Louis to issue the demolition permit. The city appealed to the Missouri Court of Appeals in Kansas City. It wouldn't be the last time Finney scrapped with the city in court. At one point, Finney was fighting three different city entities in separate cases involving the Syndicate Trust in two counties.
While the city's appeal of Kinder's decision was pending, Finney sued the city for inverse condemnation, arguing that the city's refusal to issue a demolition permit was inhibiting his right to use his property. "I believe the highest and best use for this property is a parking garage," Finney says pointedly. "I don't believe in all that save-the-old-buildings crap, and I don't believe people are clamoring to come downtown to see old buildings. Now, maybe I'm wrong, but you know what? I own it, so I should get to do what I want with my property. If the city says, 'We don't want you to do that,' then you eminent-domain me and pay me the market rate."
On Dec. 12, 1997, St. Louis Circuit Court Judge Margaret Neil agreed with Finney and ordered the city to pay him $4.2 million for the Syndicate Trust and Century buildings. Finney wasn't exactly pleased with the price but says he would have taken it. "Buy it or get the hell out of the way -- I've been saying that since August of 1994." he says. "The city could have bought this property for $625,000 when I did. So could any of these people who wanted to save it."
It wasn't the first time the city didn't put its money where its mouth was. And it wouldn't be the last.
"It is easy to see that it was a bargain now," says Stephen Kovac, the city attorney. "But then the city didn't have $4.2 million to buy it. I think they always understood it was a crucial part of development, but that doesn't mean it is worth that price."
"A commercial building that generates no income has no value," says Mike Jones, deputy mayor for development under then-Mayor Clarence Harmon at the time of Neil's ruling. "It may have sentimental value, it may have historical value, but it doesn't have commercial value. In retrospect, it turned out to be a good deal, but that wasn't the case in July of 1997. Back then, Finney was asking for $9 million -- now, that was insane for a raggedy old building. Four million wasn't crazy, but it wasn't reasonable, either."
While the court battles raged, the Syndicate grew more ragged. And Finney was hell-bent on demolishing it. After some cornice and a letter from a Walgreens sign fell off the building, Finney got approval from the city to erect a hideous fence, ostensibly to protect pedestrians from the fallout. The chain-link-and-plastic fence blocked sidewalks and two of four lanes of traffic all around the building, causing traffic jams and forcing pedestrians to step out on the street. Opponents saw it as the city helping solidify Finney's case that the building was structurally unsound.
The fence itself spurred yet another court fight.
"The Syndicate already had a blighting influence on the city," Claybour says. "When people think of downtown, they think of that building, and that huge fence hasn't helped. It was a small piece of masonry and the letters off a Walgreens sign that fell. It was a Chicken Little reaction. Instead of the fence, you could put scaffolding or, better yet, force him to fix the building."
In June 1997, St. Louis Circuit Court Judge Joan M. Burger ordered the fence taken down. Harmon promised to remove the fence as soon as possible -- only he didn't. He had it moved a few feet in from the street. Then it was adorned with urban art -- loud, garish images in bold yellow, green and black. The fence still stands, having outlasted the mayor who promised to take it down.
On Sept. 1, 1998, the Missouri appellate court overturned Judge Kinder's ruling ordering the city to issue a demolition permit and also negated the $4.2 million price that Judge Neil set for the building. The decision was based on the fact that Finney had voluntarily signed an agreement with the Land Clearance for Redevelopment Authority and had received tax abatement on the property as part of that agreement. Demolition of the building would be a breach of the redevelopment contract. It was a hollow win for everybody, effectively sending the city and Finney back to square one.
In 1999, the city changed its strategy. Weary of fighting in court, the city, with Finney's approval, decided to exercise its power of eminent domain and buy the building. The only issue to be hashed out was the price. The Harmon administration went for broke and hired one of the top condemnation attorneys in St. Louis, Gerald Carmody of the Bryan Cave law firm, to argue the case before St. Louis Circuit Judge Michael Calvin.
"It was supposed to be a way to put all the bad feelings aside and try to work within the system to get a solution," says Carmody. "There was a lot of hope going into it that this would bring it to closure. Unfortunately, it didn't happen."
Instead, it backfired. The city failed in its effort to have a jury hear the case, and Finney prevailed in getting a hearing before a three-person commission. Calvin appointed two real-estate attorneys and a real-estate agent to determine the price. It didn't take long for the acrimony that had tainted the process to resurface. "The condemnation hearing was a wild event," recalls Kovac, cringing. "There was lots of screaming and shouting about 'conspiracy' from Finney. Things got rather loud. It was kind of like a barroom brawl without the liquor."
"I'm not concerned if anybody likes me or not," Finney counters. "This is a business proposition -- it is not a personality contest. The problem with the city is that they want to make me out to be the bad guy. Hell, I'm the good guy, no doubt about that. I'm just the guy who wants to do what I want with my property. If you don't want me to do that, then pay me what it's worth. It is no different than if I came to your home and said, 'I know you only paid $60,000 for it, but we're putting Highway 40 next to it and now it's worth $400,000, but we're only going to pay you $60,000 because that is what you paid for it.' You would be mad, and so am I. I wanted to make my position very clear at that commissioners' hearing."
The commissioners split the difference. Finney wanted $9 million, and the city wanted to pay $2 million. The commissioners decided on a price of $6.2 million.
"I thought it was kind of funny," Finney says. "Mike Garvin [another city attorney] and Steve Kovac get a $4.2 million award from the judge, so the city brings in the big guns and hires Carmody from Bryan Cave, and they got their butt kicked and I got $2 million more."
Not really. The city walked away from the deal.
Jones says the building wasn't worth that much money, and even though he didn't appeal the decision, he doesn't agree with it. "They [the commissioners] were just like everyone else who has the mistaken notion that because people are talking about redevelopment downtown there is a pot of money to buy raggedy buildings you haven't done anything with," he says.
Finney's tenacious stance on the value of his property was solidified by the commissioners' ruling. Since then he has refused to budge from a minimum price of $6.5 million, 10 times what he paid in '93.
"He is a smart businessman, but he is irrational when it comes to that particular building," Jones says. "I had a couple of arrangements where developers would have purchased the Syndicate Trust for $3 million. They would have bought it three or four years ago. I had put together the financing that would have permitted that. Finney wouldn't even consider it. The more you pay for the building, the deeper hole you are digging for yourself. If someone gave the Syndicate Trust to a developer for free, there would still be no way to rehab it for reuse without a public subsidy."
Finney doesn't dispute this but adds: "We don't need tax dollars spent on preserving old buildings. I believe we can spend our money on much better things, like the schools. Other people believe we should spend money on old buildings. That's fine. You all get together and pony up the money, then you can do it."
Carmody says Finney is exaggerating the value of the building.
"If everything is as rosy as he says it is," Carmody counters, "we wouldn't be in this situation. If the property is worth what he is asking, why isn't someone in the private sector buying? I can say my house is worth a million dollars, but if I don't have anyone paying that price, it doesn't matter what I think it's worth. You just can't get mad at the city because no one is buying your overpriced property. It is not the kind of a situation were we have boom times in downtown St. Louis."
Finney says he doesn't really care whether anybody buys his property. He now has enough money to finance a parking garage and is more than willing to proceed. "Everybody is complaining about parking. We said we would put in a 2,000- to 3,000-car parking garage. We will develop it. We just won't develop it the way they want it developed. That is really what this is all about. People are upset because they are not getting their way. It just doesn't make sense. Go save another building or buy mine."
While the court battles continued, Finney let the Syndicate Trust deteriorate. He also stripped many of its architectural features -- the balcony railings, the granite in the lobby of the Century and the doors -- and sold them. "He has scavenged the building," Claybour says. "I can't believe all the beautiful features that have just been stripped away piece by piece."
Last year, Finney sued again to get a demolition permit. In September, Circuit Judge Robert H. Dierker called the Syndicate "a deteriorating, dangerous hulk squatting in the heart of the downtown St. Louis which constitutes a public nuisance as a whole." Dierker added that "repairing the building, only to have it continue to sit vacant and unused for years to come, leading inevitably to recrudescent deterioration, is not the answer -- especially as the probable cost of repair would be equal to the probable cost of demolition." Dierker then ordered the city to issue the demolition permit and for the building to be torn down as a public nuisance. But at the 11th hour, the building was granted a stay of execution.
John Steffen of Pyramid Construction was putting together a deal to convert the building into a residential and commercial space. Steffen recognized that the value of the building lay in securing the area around Old Post Office Square. To do this, he needed to lock down three buildings: the Paul Brown Building, at 818 Olive St.; the Frisco Building, at 900 Olive St.; and the Syndicate Trust. For two months, Steffen negotiated with the owners, including Finney.
"I respected the guy," says Finney. "He seemed to be the only one with sense that came to speak to me about the building in years." Nevertheless, Finney was firm in his price. He wanted $6.5 million, and not a penny less.
Steffen went to Downtown Now to solicit support but was met with skepticism. Many, including Jones, and even some of Steffen's own employees, believed he was in over his head. Steffen says Downtown Now steered him toward the Spinnaker Cos., a real-estate development and management company based in Stamford, Conn. Steffen put in millions of his own money, first buying the Paul Brown Building for $2.3 million, then putting in $300,000 in earnest money on the Syndicate. Spinnaker put in an additional $100,000.
In January, Spinnaker and Pyramid Construction announced plans to redevelop the buildings. "The intent was to redevelop the buildings for a mixture of residential, office and retail," says Amos Harris, head of Spinnaker St. Louis LLC. "But first we had to spend a couple of months understanding what's the best use for each building and working on an arrangement with the city to build a garage."
With the clock ticking toward a March 1 deadline, Steffen, already strapped from putting up the earnest money and buying the Paul Brown Building, waited while Spinnaker tried to put together the financing. Meanwhile, his business started to suffer; employees' paychecks started bouncing, their health insurance was canceled with no notification and there were layoffs.
Finney was getting impatient. "I was ready to sell." he says. "I was ready to be done with it." On Feb. 15, Finney received a letter that surprised him. Harris wrote: "Spinnaker, St. Louis would agree to an additional deposit of $400,000, non-refundable on terms acceptable to you for an extension of the closing date to April 24, 2001; a reduction in the purchase price to $5,000,000, all cash; and an assignment of the sales contract to a subsidiary of the Spinnaker Companies."
Finney was outraged: "I had been calling them for weeks, asking for the sales contract. Now, seven days before the closing deadline, I get this, a 'We are interested but we will only give you $5 million' on a piece of stationery. It is not a sales contract. It is a piece of stationery with no check attached to it. Now, in seven days I get to keep the $400,000. Why in God's name would I sell it for $5 million? It was a silly offer, and I didn't even consider it."
The seven days passed, and Spinnaker was out $100,000. Steffen, however, lost $300,000.
Sitting in his office, Steffen looks worn but resolved. "I went into contract and put up the earnest-money deposit. I always knew I was going to give Spinnaker the option, and time ran out," Steffen says. "It was up to Spinnaker to get the financing, and we allowed ourselves to cooperate. We had some faith they could make it happen. Unfortunately, they could not. It was a tough deal and a matter of timing. The timing just wasn't working."
But was it just timing? Finney believes Downtown Now sabotaged the deal. Sources concur that this may be the case. The theory goes something like this: Downtown Now, recognizing the importance of the Syndicate to the western corridor, had always wanted to buy it. In fact, says Finney, several developers told him that influential members of Downtown Now's board had discouraged them from looking at the building because they were working on a deal to buy it. Then Steffen, in less than two months, managed to pull it together. Moreover, Steffen didn't want to use the expensive lawyers or consultants connected with Downtown Now -- especially the people who made out on the convention-center-hotel deal. Egos were bruised. And so, the theory goes, Downtown Now and Spinnaker colluded. They got Steffen to assign Spinnaker the options to the Frisco and Syndicate buildings. Eventually Spinnaker bought the Frisco Building and Steffen lost his shirt on the Syndicate deal.
The notion may have been spurred in part by the fact that Tom Reeves, director of Downtown Now, and Harris are good friends and even purchased the United Missouri Bank Building, 312 N. Eighth St., together at the same time the Syndicate deal was being negotiated.
Both Reeves and Harris adamantly deny any collusion. Harris says there "is no formal affiliation between Spinnaker and Downtown Now. The only relationship is that Tom Reeves and I are personal friends. It is absolutely not true that we did anything to undermine that deal. The only thing that happened with that deal was that we offered the owner $5 million and he didn't accept it. We thought it was a fair price. Once we dug into everything involved, a $6.5 million purchase price didn't make any sense."
Reeves calls the allegations "outrageous and not worth commenting about." Asked who he thought was at fault for the Syndicate's current condition, Reeves says, "I'm not going there. I'm done with this."
Steffen says he hopes the theory isn't true, but he doesn't want to discuss it, either. "I really don't want to discuss it anymore," he says. "I am done with the Syndicate. I hope it can be developed, but I am focusing on my business."
On March 1, on the heels of the failed Spinnaker deal, St. Louis Circuit Court Judge Dierker reinstated his order allowing the demolition of the Syndicate. The same month, Francis Slay won the Democratic primary, effectively making him mayor, and Dierker had a change of heart. In an attempt at a last-hour deal, he appointed Shulamith Simon, a veteran real-estate and municipal lawyer, as special master with power to mediate between Finney and the city. His message was clear: If the city couldn't agree on a price to buy the Syndicate Trust, he would allow Finney to demolish it.
Simon, an attorney for well over 40 years, had never been assigned such a task. She was not familiar with the details of the case when she was appointed. "It was a case of 'Ignorance is bliss,'" she says. "Had I known what was involved, I probably would have declined." Simon describes the initial meeting between Finney and city officials as tense but won't elaborate. "Things are much calmer and very professional," she says. Dierker has basically placed a gag order on the parties. Barbara Geisman, deputy mayor for development, refuses to comment on what the city is seeking or to even say whether the city wants to preserve the building. Slay declines comment as well. And the mayor's spokesman refuses to comment on what sources say is the city's position: They'll buy it for $5 million or $6 million, demolish the Century for a parking garage and preserve the Syndicate.
Finney won't say much, either: "Let me put it to you this way. The Slay administration has been more responsive than the last two mayoral administrations combined." Simon was to report back to Dierker on May 22 but has been granted an extension.
At the heart of the negotiations is a recurring issue. It isn't whether the Syndicate can be rehabbed -- it clearly can. The question is whether the rehab makes financial sense for Finney or any other developer the city might find to buy it at Finney's asking price of $6.5 million. And that may depend on just how much cash or tax subsidies the city is willing to place on the table.
For the city, the task is to put a price on preservation -- not just of the Syndicate but of the surrounding blocks.
Preservationists believe the value of the property runs deeper than its price tag. "Buildings like the Syndicate Trust are a testament to the past and a statement of faith in the future," says Martha Frisch of the National Regional Trust. "The building has a lot to teach us in terms of how we look at our lives and how we can see things from the past and integrate them into our lives."
But in the world of real estate and condemnation hearings, the market price is what matters. "Most condemnations base a price on what a willing buyer would pay" says Carmody. "The system is based on the notion that a buyer is not forced to buy and the seller is not forced to sell. The dilemma of cases like the Syndicate Trust is that people are not beating down the door to buy the building. It is being bought to remove a problem. The value of the building is valuable only in terms of the area that needs to be improved."
The common method of appraisal -- surveying the value of surrounding buildings -- doesn't work for the Syndicate. "The dilemma in the law is that there is no guidance in regard to valuating a deteriorating property," Kovac says. "Basically you are trying to buy a property nobody really wants, to do something good for the city or downtown."
And the problem is compounded by the realities of downtown. "It is a microcosm of the difficulties facing downtown," says Carmody. "If we had developers and investors lined up to invest in downtown St. Louis, the Syndicate Trust would have worked itself out. The difficulty is trying to attract investors who will take a chance on a building like this. To accomplish that requires the cooperation of the owners of building, as well as the investors and the city. All the parties have to be on board and everybody has to give up more than they would like in order for it to be successful. Unless everybody gives up something, you are not going to get anywhere."
But banks and developers like Finney aren't about to give up profits. And the market value of the Syndicate will determine whether the numbers add up on a balance sheet.
Mike Goeke, vice president of McCormack Baron and Associates, appraised the property for the federal government 10 years ago, finding it to be worth $4 million, no more than the value of the underlying land. "It is a tough building to begin with," Goeke says. "All those buildings are hard to make work in today's marketplace. While there is some demand for residential along the Washington street corridor, there is a large supply of old buildings. It would be nice to be able to save them all, but we have to choose which buildings. There is a huge gap in what it costs, and the city has no money to provide to fill that gap."
"I don't know anybody who is certain about what the Syndicate is worth," says Zack Boyers, vice president of Firstar Community Development Corp. "What is known is that someone with the financial wherewithal to do the project hasn't been convinced the sales price is reasonable. Whether or not they have the right information to go on, I don't know. But it will take an experienced developer with an expertise in historic rehab that can make a lender or co-investor comfortable enough to step into the fray of the structural and political questions."
Craig Heller, president of Loftworks, has stepped into the fray of historic rehab and completed successful projects downtown. Heller believes the project can be completed but says it's too big a task for his small company. "It is going to take outside dollars," he says. "My feeling is, it can be redeveloped, but it needs a bigger developer to get it done, who can handle the initial expense of renovating it. I have bought buildings for $10 a foot, which is about what the Syndicate comes out to, but the Syndicate is a whole lot different than a smaller building." The sheer size -- 705,000 square feet -- of the Syndicate makes it a monumental rehab project. Even with big investors, the project can only be done with substantial public subsidies, including state historical tax credits, which are currently available.
Before any building is rehabbed, it must be bought, something the city failed to do with the Syndicate Trust, especially when the price was far lower. The Syndicate Trust could have been an occupied, functional catalyst for its region of downtown if the city had planned better.
"To me, this is a systemic part of St. Louis government," Jones says. "Because we never do any planning and we are not forward thinking, we have to pay more for redevelopment. If the city had put together a plan 15 years ago and dedicated funds to site assembly of real estate, we could have bought the building years ago when Finney did, and probably for a lot less."
Buying the building from Finney now, says Jones, might not be the best thing for downtown. "You cannot redevelop a building at the expense of downtown redevelopment over the long haul. Even if the city does have $6 million to pay for this, and I don't think they do, it is a knee-jerk reaction to public sentiment. In the short run it feels good, but it is stupid in the long run. It will become the new comparable for downtown and elevate the price of everything else."
Jones' advice to the city is to wait for the price of the Syndicate to drop. "My recommendation is to assemble as much cash as possible and wait for the market to collapse," he says. "Then shoot the wounded and push everyone off the cliff."
Carolyn Toft, executive director of the Landmarks Association of St. Louis, the area's primary preservation group, says, "It's far too late to indulge in hand-wringing about past mistakes.
"At least the buildings around the Old Post Office are still standing -- a singular resource for dense residential development," she says. "My concern is that an understandable desire to see something happen will result in an expedient solution with long-term ramifications. In other words, just do the deal rather than attempting to create the best possible environment. There's already plenty of history in this town demonstrating that approach."
As for pushing everyone off the cliff, Toft believes Finney will be the one left standing: "I would put my money on Finney."
And Finney doesn't anticipate seeing the edge of a cliff anytime soon. Sitting in the cluttered ruins of his first-floor office in the Century Building, he looks around and sees dollar signs, lots of them. "The city went and declared a $1.3 billion redevelopment plan right next to me," he says, referring to Downtown Now's announcement last year, which includes the $276 million convention-center hotel next door to the Syndicate. "According to the Downtown Now plan, they want to spend $500 million in this region, mostly in this three-block region. Now the Marriott is looking to buy the Paul Brown and Arcade." He shakes his head and smiles. "Better lucky than smart is all I can say. Any businessman knows that the key to any development is getting site control. You don't tell everybody you are doing all this, then bitch because the price went up. The city has said, 'We'll just develop around you.' I say, 'Go for it, Bubba.' That is great, because when everybody comes, they are going to need a place to park. You think the price of my property is going down? It's not."
He smiles, puts his hands comfortably behind his head and leans back in his chair: "If you ask me where this is going to be next year, I would have to tell you it is going to be a lot more expensive. I am positive of that. We will win, because we are not going to go away. We are the pigsty next to the palace."