This article first appeared in the St. Louis Beacon: T-REx has its own building on Washington Avenue downtown, a move that could help the fast-growing business incubator raise more money and further its mission.
T-REx – which is jointly sponsored by St. Louis, the Partnership for Downtown St. Louis, and the St. Louis Regional Chamber – announced today that it has purchased the Lammert Building, located at 911 Washington Ave. According to a press release, the business incubator plans to begin renovations soon with the goal of moving in early next year.
“Our move to the Lammert Building will provide us with 160,000 square feet of space, which we need to continue fostering St. Louis’ entrepreneurial activity and bring more startups to the area,” said Jay DeLong, the chamber's vice president and T-REX board member, in a statement. “A more permanent home will also give us a focal point for new activities that were described in the recent regional entrepreneur Initiative.”
Formed in September 2011, T-REx currently houses over 70 startup companies and five funding and mentoring groups at the Railway Exchange Building downtown. It’s often showcased as an example on how St. Louis is attracting and nurturing start-up companies.
Kevin Farrell, the partnership's senior director of economic housing and development, said in an interview that giving T-REx “a permanent home” allows for a chance “to plan and operate strategically and continue to support the mission to provide support for entrepreneurs downtown.”
He went on to say that the Lammert Building is “a great building in a great location.” Among other things, he noted that the building “has magnificent wood beam ceilings” that “creates the kind of physical environment where you can support the entrepreneurs.”
“It will allow us the room to grow physically. It will allow us to provide a more compelling physical environment,” Farrell said. “And it will allow us to really deepen our mission in support of start-ups – and not only on the tech side but on the design side. And that’s something we’ve talked about all along but haven’t been able to get to. And now we’ll be able to focus more on that effort.”
Farrell said that T-REx will take up the sixth, seventh and eighth floors of the Lammert Building that were occupied by the Stolar Partnership, a law firm that went out of business earlier this year. He also said there could be a complete renovation of the vacant fifth floor, as well as cosmetic changes to other three floors and potentially refurbishing some vacant space on the fourth floor.
One key aspect to getting the deal done was new "market tax credits," an incentive to foster commercial activity in economically disadvantaged areas. A press release from U.S. Bank stated that $1.7 million of new markets tax credit equity was used to support T-REx’s purchase and move to the Lammert Building.
“With access to new markets tax credit financing and a permanent home, T-REx will continue to attract talent, companies and capital and create a lasting legacy for St. Louis,” Zack Boyers, chairman and CEO of U.S. Bancorp Community Development Corporation, in a statement.
Farrell said the tax credit allows T-REx “the opportunity to not only buy the building but also get some additional funding renovation and help us to raise the additional money we want.”
“With the ownership, we’re also in a position where we’re ready to go out and start raising money to further expand that funding,” Farrell said. “And we’re excited to have some great bones of the building to start with.”
What’s next for the Railway Exchange Building?
T-REx’s impending move will effectively empty out the Railway Exchange Building, one of the largest structures downtown.
Earlier this year, Macy’s announced that it would close its store in the Railway Exchange Building. At one point, Macy’s occupied over seven floors of the building.
Farrell said some of the things T-REx wanted to do in terms of fundraising for capital improvements – including securing state and federal grants – require either a 10-year lease or ownership of a building.
“The Railway Exchange Building is just not in a position right now,” Farrell said. “They were very willing to have us stay. And we love the building. But there’s still a lot of uncertainty in the near term of what would happen to that building. This just gives us the opportunity to have the certainty that we couldn’t have had there.”
Macy's departure sparked plenty of speculation about what could fill the void. The St. Louis Business Journal broached the possibility of the massive building housing a data center, while others suggested a city Target or other major retailer.
As Farrell told the Beacon earlier this year, one of the biggest challenges to redeveloping the Railway Exchange Building is its size. The building has 1.2 million square feet of interior space, which Farrell said means that “it’s going to take multiple uses to fill that space.”
He went on to say that the next step is sitting down with the Railway Exchange Building’s owners “and trying to figure out how we can develop that building.”
“We’d all like to see retail at least on the first floor and maybe the first couple of floors,” Farrell said. “But beyond that, I think that the days of the seven-story departments stores, other than in the major markets, are just not there. So I think it will be a mixed use. I think residential has a lot of appeal. But it’s going to be a mix of commercial, retail, residential – it’s going to take a bunch of different uses."