The developer behind the latest redevelopment plan for the former Crestwood Plaza mall site backed out of the deal last week due to the economic impact of COVID-19.
Creve Coeur-based Walpert Properties had planned the most ambitious proposal for Crestwood mall yet, a $300 million high-density mixed-use development called “Crestwood City Center.”
The decision is a “punch in the gut” to the city, said City Administrator Kris Simpson, especially since Walpert seemed to be so close to construction. Just months ago, city officials hoped for shovels in the ground this summer.
As recently as January, Walpert had told the city that the plan was “economically viable and moving forward,” with all the tenants signed up and only financing to go. But in March, the bottom fell out of the commercial real-estate market due to COVID-19, and many of the tenants lined up in the deal, restaurants and retail, were some of those hit hardest by coronavirus-related shutdowns.
Walpert told the city the afternoon of June 2 that the plan would not move forward. The timing was another blow, with such bad news coming the same day voters extended a key city sales tax.
It also came the same day Mayor Grant Mabie was unopposed for re-election for a three-year term.
Mabie said he has a list of priorities for his upcoming term, and the mall is obviously near the top.
“It’s a shame they weren’t able to pull it off, because people were by and large pretty happy with what they were proposing to do,” Mabie said.
The Walpert plan for “Crestwood City Center” was the third development proposal in seven years. Centrum Partners proposed “The District at Crestwood” and UrbanStreet Group proposed “The Crest.”
The Crestwood TIF Commission granted UrbanStreet $25 million in tax incentives, which carry over to future developers.
Walpert’s preliminary plans outlined a possible 161,000 square feet of retail space with 60,700 square feet of mixed-use retail at the street level, with residential above.
Simpson said he is confident the 47-acre site will be developed at some point.
“I remain firm in the belief that it’s a developable piece of land, something will go there in time,” Simpson said. “There’s no flaw with it, it’s just a big piece and that makes things complicated…. It stinks to be back to square one, but I remain optimistic about the potential for the site. We’re moving aggressively to try and shake something up.”
UrbanStreet, based in Chicago, is still the owner. A representative of the company is going to come to Crestwood in the next week or two to meet with the city and talk about its plans for the site, which seem to mean selling it. It is listed with a broker, who reported to Simpson that potential buyers had already reached out.
Walpert said the project would be a $300 million redevelopment, tripling projections for its size from when it originally announced the deal in October 2018. It would have been one of the largest developments in St. Louis County in decades.
Unlike past proposals, the plan seemed well-received by most of the public.
Asked what his perfect development for the site would be, Simpson said Walpert’s.
“What Walpert proposed, I thought was a great plan in a perfect world,” the city administrator said. “Everybody seems to have a memory or an experience of going to Crestwood mall, whether you were a kid in the ‘90s or a mall rat in the ‘80s or whether you met your husband while you were working at the department store in the ‘60s and ‘70s, I’ve heard so many stories like that. It was clear that the mall site was the heart of the Crestwood community and I think the surrounding communities — it was a place for people to go and have experiences and make memories. And whatever winds up going in there, I would hope that we could get something that offers the region the opportunity to go there and make those memories again.”
But Walpert’s recent optimism was before COVID-19 decimated the entertainment and retail industries, bringing them to some of their worst months ever. In St. Louis County, businesses are just now reopening with limited capacities.
Walpert developer Kent Evans, who returned a request for comment after press time, told St. Louis Public Radio last fall that the deal was close to the finish line, but “certain things are dependent on the overall health of the macroeconomy. We have no control over that, so we just have to keep our heads down and keep pushing ahead.”
Walpert had the property under contract but had not yet bought the site from owner UrbanStreet. Evans had always said a deal would be contingent on signing up enough anchor tenants.
Although the city was not privy to all of the deal between Walpert and UrbanStreet, Simpson said his understanding is that UrbanStreet was requiring earnest money on a regular basis from Walpert. Walpert asked for flexibility on a recent payment due to COVID-19, but UrbanStreet declined to budge and Walpert backed out of the deal.
UrbanStreet bought the mall site at auction from Centrum, which saw its potential deal for a redevelopment and tax-increment financing fall flat at the city level.
UrbanStreet got subsidy approval and spent at least $10 million demolishing the buildings and leveling the site, Mabie said.