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Monday, September 18, 2006

LRA's Problem With Marketing: It Needs to Start

Check out the featured properties list of the city's real estate agency, the Land Reutilization Authority.

Maybe it looks fine on first glance, if a little short on the number of properties. That number, though, gets even shorter when you look at the little red tags added next to each address. Two of the properties have already sold. One has an offer made on it, although the tag "OFFER" may not be as self-explanatory to a first-time visitor to the website. Another reads "Available," leading one to question whether or not the other addresses listed are available as well.

Further investigation shows that of the buildings that sold, the sale of 3463 Potomac was recorded December 16, 2005 and the sale of 1919 Agnes was recorded August 1, 2006. The website proclaims its last update as being August 23, 2006, making the presence of the August 1 sale somewhat understandable. Yet there is no good reason why the sale from late last year should still be listed on the Featured Properties pages.

Further investigation reveals that almost all of the current addresses have been on the Featured Properties page since 2004, and that only one or two have been added since that year. In the past, even more "sold" properties cluttered this page.

Are we to believe that the city has no more worthwhile LRA-owned buildings to sell when it gets through with this list?

Of course not; there are thousands more and many of them would sell quickly if one didn't have to deal with the city to purchase them. The LRA should be constantly rolling in new properties to the Featured Properties page. As soon as one sells, another should replace it. If a sold house needs to remain on the site to show people what kind of properties LRA has sold, it should be moved to an archive page.

Yet even an enhanced Featured Properties page only reaches anyone who can find the page, which isn't easy to find. What LRA really needs to do is actual marketing.

Here are some suggestions for an LRA marketing plan:

1. Publish the entire LRA property list on the LRA website, complete with a photograph of each building in the inventory and the asking price (which should be $1.00 in every instance).

2. Form partnerships with neighborhood organizations that have proven development ability, such as the partnership being forged between LRA and the Old North St. Louis Restoration Group. The neighborhood groups will create marketing strategies and materials.

3. Eliminate the requirement of an alderman's letter of support for a sale. Why this is even part of LRA policy is beyond comprehension. (For instance, the Third Ward has the highest concentration of LRA buildings in the city. Good luck getting that letter of support there!)

4. Create an attractive for-sale sign to be placed on each LRA building.

5. Explore the possibility of public-private partnerships that would utilize LRA buildings for Habitat for Humanity and other housing efforts.

6. Create a dedicated staff position for the purpose of sales and marketing. Of course, funding is tight at present but I would argue that selling LRA buildings should be a huge priority of city government and worthy of the expenditure. After all, the St. Louis Development Corporation already spends a lot of city money every year contracting to outside parties for appraisal and consulting work. Why not figure out ways to save money on those contracts to fund a position at LRA?

With some effort, LRA could sell much of its inventory in a few years. Of course, aldermen would lose their ability to give favored developers property, and land banking for large projects might become difficult, but rarely is that approach conducive to smart urban planning. Aldermanic control of development has been nothing but a downfall for the city.

I am not suggesting that LRA drop its proof of financial responsibility requirement. However, the agency needs to stop using that requirement as a threat. LRA needs to conduct itself to ultimately completely divest its property. LRA properties have a bad reputation as eyesores that are difficult to purchase. In fact, they could be the raw material of urban homesteading and returned to use.

7 comments:

Doug Duckworth said...

It’s nice to see dialogue on this issue. This is probably one of the most important issues in St. Louis as these historical buildings are rotting and no one seems to be doing anything. St. Louis is its own worst enemy and your proposed changes are definitely common-sense approaches which seem to escape the LRA. Who would have ever though that "For Sale" signs are a good way to sell property? Who would have though that having a picture online would also help sell property? One could say that not having these basic marketing tools is either a complete failure due to rampant stupidity or the indication of an unwillingness to sell. Either way something needs to be done, now. These properties could create a huge turnaround for St. Louis in terms of tax revenue and economic development.

www.tobyweiss.com said...

Who was the alderman that introduced an LRA reform in February of 2005? Follow-up on that would be a start.

Also, in 2003, me and a friend gathered the LRA available-properties list, and had to physically drive to each of the addresses to see what was being offered. And some of the addresses were WRONG (surprised?).

The ideas you suggest are logical. That the city doesn't pursue this does suggest some kind of "conspiracy" to not sell these properties to private individuals.

Also, I personally know of a couple who DID purchase an LRA property on the North Side, and began the arduous process of rehabbing it, at their own expense. But they fell short of the year deadline per LRA guidelines. These guidelines are unrealistic for private individuals, as anyone who's ever rehabbed knows a year is NOTHING in the life of re-birthing a neglected building.

Which, again, suggests an official "conspiracy" against private individuals buying these properties.

Weren't these LRA guidelines put in place in the early 1970s? If so, they are loooong overdue for an overhaul. It comes down to the LRA coming clean about their intent for these properties. And if they only want development businesses to utilize these properties, then SAY SO. Re-work the guidelines, be clear what you want.

It's definitely worth stirring up some dirt to see what "they" say, when backed into a corner.

Anonymous said...

The Missouri Legislature enacted Ch. 92 in 1971, followed by the passage of City Ordinance 56054 by the board of aldermen, to establish the Land Reutilization Authority (LRA). The authorizing legislation applied just to Kansas City and the City of St. Louis. The LRA has the authority to receive and dispose of tax delinquent property, for which there are no buyers at the auction of foreclosed properties. Joseph Backers was the first director, followed by Robert Volt, former building commissioner.

Michael Allen said...

Toby,

That alderman was Charles Quincy Troupe (1st Ward). Certainly, people including myself should follow up with him.

Travis Reems said...

I've had this very conversation with a few Aldermen. My proposal to them was to model the LRA program after the very successful HUD sale program, which is to bring in a REALTOR that markets the properties for a small flat fee to other REALTORs as a competitive commission rate. 50% of prospective home-buyers find their prospective home through their real estate agent, and the best way to get in front of real estate agents is to list the property in the MLS. Also, listing the LRA properties takes the marketing burden off of the LRA employees and places it on the REALTOR, who is then responsible for signs, lock-boxes, and other forms of advertising. Finally, with a portfolio like the LRA holds, REALTORs would be climbing over eachother to win that contract and the LRA could get a very good listing rate. Actively marketing these properties for redevelopment would be a win-win for the communities, the City as a whole, and the developer population.

Michael Allen said...

Very good ideas, Travis.

Joe said...

The sale list of Class A available LRA properties is searchable at:
http://stlcin.missouri.org/forsale/

or check the full sale list of 4,914 parcels.

Most do not have a picture. There's limited staff time and resources to go out taking pictures of properties. I think a lot of that time get focused on pictures of properties on which offers have already been made, for the commission meetings. You can't really expect the volunteer LRA commission members to go and personally visit every single property being sold.

Mostly, the featured properties are those in slightly better condition, that can fetch a slightly better price than most of the inventory.

Actually, the site is much more extensive and detailed than it was a couple years back. And, the policy of re-entry is after 18 months, not 12 months.

I have occasionally seen For Sale signs on LRA properties, but not often. Of course, if it's not "Class A Available" it's not really for sale to the general public. Yes, that's a decision made largely by the alderman.