American Milling; McGowan Brothers Development
Commercial, Loft Apartments
198,000 total square feet
The redevelopment of the historic Fashion Square building resulted in the transformation of a once fashionable garment shop into a mixed-use property. The finished project offers 96 loft-style apartments, two floors of commercial space, and one floor of retail space, with parking located on the basement level and a surface lot directly behind the property.
The 96 residential units will average 1,250 square feet and are located on floors four through 11. All units are characterized by the contemporary/industrial look of loft apartments in St. Louis, and throughout the loft districts of other major markets. Apartments will include hardwood floors, exposed brick, newly replaced warehouse style windows, sand-blasted concrete ceilings, solid core birch doors, and contemporary hardware and fixtures. Each apartment has washer/dryer hookups, disposals, dishwashers, refrigerators/icemakers, microwaves with hood and oven/range. Entry to the residential portion of the building is with key card access; guests use an intercom.
Floors one through three will contain 47,000 square feet of retail and office space.
The building features a gothic design by renowned 20th century architect David R. Harrison. The brick and terra cotta, concrete-constructed building is one of the most ornamental and architecturally notable buildings in the city. When it was built in 1926, it was considered one of America 's most modern building structures. Fashion Square is just seven blocks from the Old Post Office Building – another historic renovation project funded in part by New Markets Tax Credits provided by Enterprise.
Funding for the Fashion Square project included senior debt, subordinate debt, federal and state historic tax credit equity, and New Markets Tax Credit equity. The investment generated $9.7 million in New Markets Tax Credits for U.S. Bank.
Having emerged from decades of steady disinvestment, downtown St. Louis is experiencing substantial rebirth. Most of the development has taken place during a recessionary period, resulting in a sluggish office market. As the economy rebounds, it is anticipated that new business and business expansions will benefit a downtown St. Louis that is notably different and improved from the one that existed in 1999.
The residential component for Fashion Square is targeted to various demographics: young professionals who are among the 95,000+ employees who work downtown, and for whom quality and contemporary residential options downtown have not existed until very recently; transplants from other urban markets, many of which are interested in living downtown permanently; undergraduate and graduate students of four major universities: St. Louis University, Washington University, University of Missouri – St. Louis, and Webster University; and “empty nesters,” who are moving downtown after selling their larger suburban homes. As street level activities increase and improve in quality—evolving from the nightclubs of the past, for example, to restaurants and shops today—more empty nesters will consider downtown as a viable option.
McGowan Brothers Development (MB Development) has created a joint venture with American Milling to redevelop Fashion Square. McGowan Brothers Development Corp. began as a family-owned business. With a pioneering spirit, determination and little more than a dream, the organization has established itself as one of the premier developers of the Washington Avenue Loft District.
MB Development realized in order for the loft district to truly mature it was necessary to acquire a significant number of properties. It was also necessary to bring other developers to the area to join in the renovation. Over the past seven years the company has committed to the refurbishment of more than 10 turn-of-the-century warehouse buildings in downtown St. Louis. MB Development has also grown and expanded company development interests to include property management.
Owning almost one million square feet of space, MB Development projects include lofts, both for sale and lease, for residential and/or commercial use.
U.S. Bancorp Community Development Corporation provided the capital for the transaction through an investment partnership with Enterprise, which allocated New Markets Tax Credits to the transaction. U.S. Bancorp Community Development Corporation, with assets of nearly $1.4 billion, is one of the largest New Markets Tax Credit investors in the country. It also makes equity investments in low-income housing and historic tax credits in exchange for tax benefits and CRA investment credits usable by U.S. Bank. Both are subsidiaries of U.S. Bancorp (NYSE: USB), with assets of $195 billion, it is the sixth largest financial services holding company in the United States. The company provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. U.S. Bancorp is the parent company of U.S. Bank.