ST. LOUIS — Amid the dust caking downtown’s vacant Chemical Building, John Campo Jr. felt inspiration spark.
The unique architectural details of the 127-year-old property at Eighth and Olive streets captured Campo’s attention as a potential redevelopment. Data highlighting ºüÀêÊÓƵ as a competitive hotel market — coupled with nearby blockbuster real estate developments — made it a done deal, he said.
Steph Kukuljan and other business reporters bring you insights into ºüÀêÊÓƵ-area real estate and development.
Campo, of New Orleans-based Campo Architecture & Interior Design, and partners Beechwood Pinnacle Hotels and InterMountain Management plan to invest $82 million to transform the historic property into a 240-room, dual-branded Marriott hotel. With historic tax credits and other incentives lined up, Campo hopes to begin work late this year with an anticipated opening in 2025.
People are also reading…
The chief of the city’s economic development agency hailed the project as another win for downtown.
“Downtown is having a resurgence and we are encouraged by the interest and investment from experienced national developers,†Neal Richardson, CEO of ºüÀêÊÓƵ Development Corp., said in a statement. “Reactivating vacant buildings in the heart of our city will help attract more visitors and provide additional amenities for residents.â€
The Chemical Building, built for the Chemical National Bank, is the last property on its corner and one of the few remaining prominent sites in downtown’s central business district that have yet to be redeveloped. But it’s not for a lack of trying.
The bay windows and undulant red brick adorning the Chemical Building, at 777 Olive Street, have frequently attracted hopeful developers with plans of luxury condominiums, “micro†apartments and hotels. But all, at least so far, have failed, underscoring the precarious financial sources that back these projects.
Historic restorations are expensive. At the Chemical Building, Campo and his team found that much of the property’s aesthetics weren’t well taken care of. There was evidence of moisture in the basement. Windows were missing, and the brick will have to be repointed, he said.
Campo Architecture, whose is nearly all adaptive reuse projects, has spent seven years working in Missouri on other developments and is well-versed in the the state’s historic tax credit program. Those credits, along with the local incentives his group received that are worth about $5 million, made the Chemical Building project possible, he said.
“States that don’t have a robust matching historic tax credit program, particularly now with the increase in interest rates,†Campo said, “(projects) just die on the vine.â€
His team had two financial sources underwrite the project and have had to raise more equity to deal with high interest rates. They had also had an appraisal done and contracted with two hotel management companies to look into market data. Both, Campo said, showed key metrics that the ºüÀêÊÓƵ hotel market is gaining momentum and is among the top markets in the country.
Occupancy in the downtown hotel market reached 67% in July — a 11% increase from the year before — and 70% in June this year, the latter of which was highest it had been since October 2019, according to data from commercial real estate firm CBRE and Kalibri Labs. Demand for downtown hotels also grew 12.5% in July, compared to the same period last year.
More so, Campo said he was impressed with the billions of dollars of new development that’s stacked up near the Chemical Building that his team expects will help fill hotel rooms: Cardinals baseball, Major League Soccer, the convention center, renovated Arch grounds and the National Geospatial-Intelligence Agency’s new facility in North City.
It’s enough momentum, he said, that’ll make him look for other projects in town. He’s bullish, he said, on the future of the city.
“This is not carpetbaggers coming to ºüÀêÊÓƵ, doing a project, flipping it and getting out of town,†Campo said. “We are part of your community now.â€
Steph Kukuljan and other business reporters bring you insights into ºüÀêÊÓƵ-area real estate and development.