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Economy & Business

Creating community by building, investing in tech district

This article first appeared in the St. Louis Beacon, Oct. 23, 2012 - Local entrepreneurial leaders have rolled out a major investment in St. Louis’ technology field. It's one they hope will spur the emergence of a full-scale innovation corridor and lay the groundwork for a uniquely revitalized area of the city with a complete slate of cultural, retail and residential opportunities.

“Simply throwing up a building in the middle of a parking lot is no longer going to be good enough if we are going to attract people from around the world,” Alderman Joe Roddy,D-17th Ward, told a standing room only crowd at the ultra-modern Forest Park Ave. offices of CORTEX, a decade-old nonprofit that promotes the city’s tech environment. “It’s not just great research but being able to create a real sense of place.”

A big piece of that vision snapped into focus Monday night with the announcement of a nine-figure commitment by Wexford Science and Technology, a noted research park developer, which will pour about $73 million into a revamp of the Heritage Building set to get underway as soon as December. Wexford will also purchase the present CORTEX facility for about $26 million. Meanwhile, health provider BJC is set to erect a five-story, 200,000-square-foot office building.

BJC, Washington University, MODOT and Wexford will all combine to chip in more than $40 million for a new Interstate 64 interchange and a “streetscaping” makeover for Duncan and Clayton avenues to create a new “CORTEX Commons” public park.

Under the deal, the university will provide certain lease guarantees to Wexford  to smooth the path for debt financing.

All told, this leg of the project, billed as Phase II of an ambitious 25-year blueprint, boasts more than $186 million in investment that leaders believe will bring in 1,400 more jobs while finally allowing the emerging tech district to crack the million square foot mark in lab and office space.

Over the life of the quarter-century master plan, Dennis Lower, president and CEO of CORTEX, said it could eventually create 10,000-12,000 jobs and bring in millions in tax revenue.

“We feel what we’ve designed is achievable,” he said, interviewed after the program. “But the market will have to determine what’s feasible.”

‘Communitywide project’

To hear Lower describe it, the concept sounds more like planning for an exurban residential municipality than an urban R & D park but that’s really a part of the idea. The purpose is to engender a true sense of community that embraces commercial opportunities not just in the tech sector but in terms of retail shopping anchors, dining establishments and housing. In short, it won’t be a place that goes dark at 5 p.m. when all the suburbanites flee to battle the evening commute.

It’s also designed to make use of existing neighborhood resources. That’s a task that Lower believes the midtown location over which CORTEX holds sway is well-placed to make happen. A gritty industrial swath of economically marginal real estate, the land tract is one that has seen more prosperous days, but it does have the blessing of location. Tucked comfortably near the Central West End, St. Louis and Washington universities, the amenities of Forest Park, the Tower Grove area, the Missouri Botanical Garden and the Barnes-Jewish hospital complex, the region is near to all the ingredients needed to build on cultural, scientific, residential and retail opportunities.

It would also provide a wide diversity of housing stock close by, something Lower said is necessary since 40 percent of a research park’s jobs come from those with a two-year degree or a high school education.

“This isn’t just a top-heavy economic development project but a communitywide project,” he told the crowd.

In the end, Lower doesn’t just want techies and their support staff to work in the CORTEX district. He wants them to live and play there as well. It’s all part of the “24/7” concept CORTEX has been building for some time, a paradigm to make the area a viable option for attracting talent from out of town, one of the biggest chronic struggles for an emerging center of innovation.

Professionals who are in demand have a wide variety of choices in cities all over the world and the newest hot spot isn’t always the most popular. Technology enterprises may be on the cutting edge but, latched to a heavy burden of specialized culture and pricey infrastructure, they don’t exactly turn on a dime.

“It’s very hard to get them to move once they are established,” Lower told the audience. “The employees often don’t want to just pick up and move to an emerging center where if they need to find another job, it’s not as easy as if they were in an established center.”

Nor is it only the research-rich coasts that present competition. In addition to traditional powerhouses in California and Boston, new upstarts are popping up in places like Austin, which is developing a decent IT scene and Colorado where life sciences are becoming a favorite.

Rivals can also come even closer to home -- St. Louis County, for instance.

“I’m competing with infrastructure in the suburbs that’s already established,” Lower said. “It’s perceived by the public as a safe environment to live in, where the streets are all new, there’s plenty of entertainment and recreation and restaurants to go to. Those are the things we have to build. Those are the things we have to invest in. This is fundamentally an urban redevelopment project.”

He said that could mean a significant continuing investment and the infusion of incentives and tax-increment financing until the region becomes viable and can compete on its own. He estimated St. Louis is about five to 10 years from a “tipping point.”

“Once that pump is primed, then we will be able to allow the private sector to take over,” he said.

If its architects have their way, Phase II, expected to be completed in early 2014, will have a briefer lifespan than its predecessor, which dates back a decade or more during which it birthed about 950 jobs through $155 million of investment. The next evolution is designed to more than double those numbers.

It also aims to provide a home for an increasing number of once-nascent startups that are now getting too big for the nest of incubators that have helped revitalize the area’s tech scene. St. Louis has the enterprises, Lower said. It just has no place to put them.

“Between BioGenerator and (Center for Emerging Techologies), we have more than 50 emerging companies that if we don’t find additional space for them, ... they are going to have to move out and we won’t capture that economic benefit,” he said.

It’s that concern which helps drive Phase II, particularly given the difficulty of attracting established enterprises from outside.

“A big part of it is to grow your own companies,” he said. “If I were to look into a crystal ball, 30 years from now, I would anticipate that probably 75 percent of our companies are going to be grown from what is here in St. Louis today, tomorrow and in the coming years.”

Lower said Wexford’s support lent validation to CORTEX’s vision. The Baltimore-based developer has about 2 million square feet under its belt in eight research parks.

“They are unlike any other developer of science and technology buildings in the country in that they build and they hold for their own portfolios,” he said. “They’re in for the long-term.”

‘A snowball effect’

Audience member Donn Rubin, president and CEO of BioSTL, called the move a tremendous step forward.

“The anchor institutions in the neighborhood,” he said, “share this vision of a St. Louis, and in particular this district, as a robust place where bright people are innovating. Businesspeople, finance people and students are all interacting to bring out the best in St. Louis and create a neighborhood that is a magnet for others like them.”

Lower’s presentation was also generally well-received by those who live in the surrounding area.

Deb Godwin, a Central West End resident since 1996, said she felt it was a great investment in the neighborhood’s future, even if the promised tax revenue needed to build over time.

“We’ve seen so little tax dollars in the area for all the years that we’ve been here that at least there’s a light at the end of the tunnel that will see more tax revenue and people working in the area,” she said. “I’m hoping that has a snowball effect.”

Christie Huck, executive director of a charter school in the area, said she felt CORTEX was taking a positive approach to bringing resources into the city.

“It’s exciting to see how far they’ve come in such a short time relatively speaking,” said the Shaw neighborhood resident. “Having been through a school start up over the last six or seven years, I appreciate the perspective of taking the long view and how long it takes to build something of this proportion.”

Ashok Agrawal, who moved to the Central West End two years ago from Chesterfield, believes that CORTEX has a good track record of achieving its goals. He also said the tax-increment financing plan, which would phase in piece-by-piece to support the effort, seemed well-structured.

“I like the fact that it is truly a public-private partnership,” said Agrawal, who is also vice president for academic affairs at St. Louis Community College at Florissant Valley. “I like how various entities from the community, hospitals, research organizations, educational facilities and the plan for retail and residential is all brought together.”

Sean O’Gorman, a Central West End resident on and off since the early 1980s, was supportive as well. He said that providing workers with a good environment in which to live nearby was part of what made the plan workable.

“Look at someone who makes $10 an hour. It’s tough to make ends meet,” he said, “But if you don’t have to drive, you can live in a two-bedroom house that has been rehabbed at a reasonable rate and walk to work.

He also said that with backing from Wash U, BJC and others, the idea was likely to succeed. He felt the old industrial district was a good spot to promote new development without negatively impacting existing residents.

“The thing that’s important is that this isn’t taking out any neighborhood,” he said. “Nobody lives here.”

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