$7M TIF for Laclede HQ moves forward

ST. LOUIS • A plan to provide city financing for Laclede Corp.’s new downtown headquarters advanced Wednesday, but not without a fight.

A subcommittee of the ��Ӱ�ԭ�� Board of Aldermen gave its blessing to $7 million in tax-increment financing for developers the Koman Group to renovate the long-empty General American Building at 700 Market Street into a new home for Laclede. The measure now goes to the full board.

After negotiations with aldermen and other city officials, Koman cut its initial TIF request down from $8.1 million. If the package is passed by the full board, the developers will pair it with private money and state and federal historic tax credits to fund the $46.4 million project. They hope to complete the renovation in early 2015.

Laclede has been looking around the region for a new headquarters for about 18 months. Keeping the utility, and its 550 employees, downtown is a good move for the city, said Alderman Phyllis Young. Laclede has been in an acquisition mode lately and plans to keep growing, and could add jobs here, she said.

“We will have a great opportunity for increasing employment downtown if this company is successful,” she said.

The deal also will turn the lights back on in one of downtown’s most distinctive buildings.

The GenAmerica Building was designed in the 1970s by architect Philip Johnson as a headquarters for the insurer, but it has been empty since the company moved in 2004. Its unique floorplan and interior glass walls make it expensive to renovate and hard to break up for multiple tenants. A company that wants the whole building doesn’t come along very often, Young said.

“If this TIF doesn’t pass, the project will be dropped,” she said. “And that building will sit there again for a very long time.”

Still, critics point out that Laclede is already located downtown, and will simply leave its rented space a few blocks away at 720 Olive Street. Given the many needs in other parts of the city, said Cheyenne Thomas, one of about 15 opponents who spoke at the hearing, paying to shuffle companies around downtown doesn’t make much sense.

“How does this help city taxpayers?” she said. “We are really hitting the bottom of the bucket when we’re giving tax breaks for a three-block move.”

There was also debate about whether the incentives were going to Koman, which will own the building, or Laclede, which will rent it. Koman applied for the TIF and has presented the plans throughout — Laclede didn’t have anyone at Wednesday’s meeting — but Josh Udelhofen, chief investment officer for Koman, confirmed that his company has worked closely with Laclede since the start of its headquarters search, first as a consultant and now as likely landlord. And upon questioning from Alderman Sharon Tyus, he acknowledged that Koman had not sought any other tenants for the building other than Laclede.

Still, Udelhofen said, Laclede will be paying standard rates for downtown office space. The TIF is needed to cover the difference between what relatively-low downtown rents can generate and the cost of renovation. Without it, the project won’t work.

“They have agreed to pay a market rate,” he said. “We have to bridge the gap between what a market rate is and what the redevelopment cost is.”

These arguments appeared to sway most doubters, at least among the aldermen. The committee voted 6-1, with one abstention, to recommend the full board OK the deal. Tyus cast the lone no vote.