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Saturday, November 29, 2008

"The Junction" and Old North's Housing Balance

The massive Meier and Pohlmann Furniture Company factory stands on the south side of Palm Street between 14th and Blair in Old North St. Louis. Built between 1891 and 1901, the factory has always been a formidable mass whose form and use are at odds with the surrounding patchwork of homes, corner stores and flats. Now a proposed development might accentuate that separation.

Developer George Kruntchev proposes to rehabilitate the factory into 54 income-restricted apartments called "The Junction." Old North residents have risen against the development, and with good reason. For one thing, the 54 units include many three-bedroom units that might push the building's occupancy to well over 150 residents. That is quite a social shift in a neighborhood that to date has been absorbing new residents one small building at a time. Another reason for the opposition is the concentration of type of housing unit, again an unprecedented shift in a neighborhood known for its amazing economic diversity. Old North has always been an antidote to cookie-cutter, stack 'em high housing development, be it condominiums or subsidized housing.

The most troubling aspect of the project may be the last-minute nature of community awareness. The Missouri Housing Development Commission (MHDC) will consider issuance of 9% tax credits for the project on December 12. The first neighborhood meeting on the project was last Saturday, November 22. At the meeting, residents learned that Mayor Francis Slay and Alderwoman April Ford-Griffin (D-5th) support the project, apparently without the benefit of neighborhood consultation. Not a single resident spoke in favor of The Junction project as it stands. The range of residents at the meeting went from middle-class rehabbers to renters to long-time residents. I've never seen Old North reach such a solid consensus on any development issue.

The news of the project shocked many because residents knew of a very different project called The Junction. Kathy Sorkin, Vice President of E.M. Harris Construction, had purchased the Meier & Pohlmann factory a few years ago for a multi-unit residential project that would have mixed market-rate and "affordable" (i.e., MHDC-financed) units. That project was appropriate to Old North, with a creative mix of units styles and prices. Unfortunately, MHDC did not approve and the project faded away. At some point, Sorkin sold the building to another party who sold it to Kruntchev.

Kruntchev has a range of impressive development accomplishments to his credit, including the rehabilitation of Grant School in Tower Grove East. Kruntchev even attended the November 22 meeting in Old North, directly facing community opposition. Much of the developer's work consists of MHDC-financed projects that involves historic preservation. Had Kruntchev and the community engaged each other long ahead of the scheduled MHDC meeting, I doubt that the situation would be polarized. Alas, somehow there was a communication breakdown as those who should have brought the community to the table failed to do so.

Of course, as Kruntchev pointed out to residents, one might assume that The Junction would sit well with a neighborhood whose neighborhood organization has been co-developer on some fairly sizable MHDC-backed projects. That's a good point, although neither North Market Place nor the 154th Street project has concentrated as many as 54 units in one building.

Still, Old North residents have grown weary of the arrival of more MHDC income-restricted housing. That housing serves a purpose, but when it overwhelms the owner-occupied and market-rate development of a neighborhood, real trouble begins. The harsh neighborhood opposition to The Junction shows a palpable fear that Old North could very well lose the balance needed to attract homeowners to the neighborhood.

When I gave a tour fo the near north side for listeners of the Charlie Brennan show in May, people were very excited by the development progress that they saw in Old North and St. Louis Place. Yet one question that came up was when will homeownership catch up with the newly-built or rehabbed rentals all around. People noticed the imbalance, not with fear but with genuine curiosity. Anyone who has visited successful urban places see diversity -- in people, in housing, in uses. When you don't see it, you wonder why it's missing.

After all, the quality of a neighborhood is not measured in dollars invested, units created or ribbons cut. Awhile ago, perhaps the Junction would not have thrown Old North off balance. Now, it very well could. It's time to adjust and figure out a different path for that project so it does not disrupt Old North. Now is a tough time to spur new development, but it's also a tough time to risk the future of an entire neighborhood.


Anonymous said...

How about 1/3 condos, 1/3 market rate rentals, and 1/3 low income rentals? This seems like a reasonable and acceptable mix. Consult with stakeholders and homeowners about the design and planning and this project should go forward. Nice that the whole project changed hands and nobody was told about it. Not like all of us haven't become pros at digging for hidden and covered up information about the goings on around St. Louis? Get real people, inform the homeowners or get nowhere with your project.

Anonymous said...

Your comments are all well and good but what is your vision as the best possible use for the structure?

Michael R. Allen said...

The factory was actually in use when Sorkin purchased it; it housed a pallet factory. I never saw a pressing need to buy that operation out, as it was fairly quiet and created a few jobs in the neighborhood. Not the optimal use for the building, but realistic for where Old North is at right now.

Yet what's done is done. Residential development will be happening there now that the price of the building has been driven up. I think that residential is fine, but with mixed types of units (ideally no more than 1/3 restricted income) and a number of units closer to 30 than 50. I'd love to see commercial use on the first floor -- not necessarily retail, which wouldn't be great for the location, but offices would mix up the use.

6:56 PM, November 29, 2008

GMichaud said...

The only motive for the developer is money. It's a way to make money. MHDC credits are desirable because if you are a relatively competent builder it is sure money. (rental and ongoing maintenance is another issue)

A governing urban plan needs to adopted with input from the people. With an urban plan such a large scale building could be considered for other uses, a St. Louis Bauhaus for instance: a major use that could anchor the new 14th street mall.
However thinking like that cannot occur without broad planning involvement, if everything is behind closed doors then alternatives cannot be explored (all parts of the city connect, whether the site should be residential or somehow related to the 14th street mall or other uses should be considered).
MHDC has been sensitive to public criticism of projects in the past. Although with the passage of the multimillion dollar tax credit for Paul McKee indicates clearly that local governments are owned by corporate types, so rational, ethical behavior may be impossible.

When I was at Beyond Housing we found scattered site housing worked well giving tenants a chance to be part of the neighborhood.
It was successful in many ways.
In any case I thought warehousing tenants blew up with pruit-igoe.

This is a project of convenience, not only for the developer, but also the city and state. It is easier for them than actually redeveloping neighborhoods. In fact they prefer to tear down and build new housing, that is their general policy.
People in neighborhoods don't matter, what matters is that the same mentality that ruined wall street and is alive and well with this project.

Anonymous said...

The phrase "low income housing" is an unfortunate one. Many people automatically translate the term to "Section 8" housing and then within zero to sixty seconds, the conversation devolves into a nimby-toned, anti poor, anti-black, anti-hoosier, all sorts of anti-comment discussion. It is almost always one of homeowner vs. unknown renter.

The fact is "low income" housing is really affordable, workforce housing. People eligible to rent these apartments are health care workers, school district workers and public employees. Households up to 60 percent of area median income qualify, so incomes in the mid to upper thirty thousand range are typical.

Everybody wants more owner occupied housing. It's a chicken and egg thing. Most owner occupants won't move to a neighborhood with lots of vacant buildings, and Old North still has lots of vacant buildings. As a result, in rehabbing neighborhoods, owner occupied housing often follows rental.

GMichaud said...

While I agree low income housing is not a good term. MHDC has strict rules, including reporting rules yearly about who you can rent to. In any case it is probably not the best strategy to fill a large building with people who are all subsidized, even if it is working poor and stay at home moms.
As I have said scattered site housing seemed to be effective. Beyond Housing has used this method for years, it is not perfect, but much better than warehousing tenants.
Common sense should be enough for anyone to realize scattered site housing is a better method than creating a factory for housing people (to supplant the factory for pallets). The developers and the bean counters do well with this arrangement, but but not the renters and surrounding community.
Beyond the suitability of warehousing tenants in old factory, the whole question of uses for this factory should be public discussion. The best solution is to have a city plan that addresses options, with Hyde Park, Old North, a large Catholic Church are in the area it seems connections and impacts should be considered. As Michael suggests commercial is also a factor, perhaps not in this building, but what about the future of commercial in the immediate area? There is so many questions not answered with a large development such as this.
Old North has an overall plan, it helps create a direction and shape. It makes an attempt answer questions and hence do a better job with the money available.
This project is another case of throwing tax money away. The impact of a major project should be understood.
On the other hand if 45 scattered site units were rehabbed over a large area there would be no major questions and generally such a project would have a positive impact for renters, neighborhoods and the community.
The project as now proposed is simply a convenient, easy way to make money for the developer. It has nothing to the community or individual renters and their families.
The real problem is the government continues to partner with these developers. This project would not be possible without the government.
Yet, as the lack of advance information about this project proves once again, government officials work for wealthly insiders and not for the interests of the citizens they are supposed to serve.

Anonymous said...

When it comes to affordable housing, Old North enjoys an incredible reputation. The various projects the ONSLRG has partnered in include both affordable rental and ownership projects and home repair programs for exisiting low income homeowners. The ONSLRG has also been a strong advocate in fighting problem properties, in particular, affordable rental properties so poorly managed that tenants lived in both fear and terrible physical conditions. So when it comes to knowledge, the understanding of what makes affordable housing successful is there - key qualities such as site planning units to foster the highest possible interaction with neighbors, exceptionally effective and present management, and making affordable units visually indistinguishable from market rate units go along way towards the succcess of what has been realized in Old North. The Junction, as currently conceived, does not build on these successes - the fact the developer indicated at the last community meeting, that he had no idea the community was so engaged and that he clearly had a lot of work to do on his proposal further indicates the level of thought that has gone into this proposal. One can only hope that the letter writing going on right now so late in the process can create enough time and motivation to reshape this into something that does build on what we and many others have worked so hard to achieve here.

John B

Chris said...

Concentrated poverty is not a good thing, and now that I think about it, concentrated wealth isn't either.

Anonymous said...

Last night on KDHX, developer Kevin McGowan said the only projects we'd be seeing for some time will be rental.

Affordable housing doesn't translate to "warehousing the poor" or "concentrating poverty". If readers understood the quality level of this planned rehab, they wouldn't call it "poverty".

The tenants will be working people paying their own money in rent. The way this economy is going, a lot more of us may soon be seeking affordable rental housing.

Visit any neighborhood with two and four family or larger apartment houses and flats, and you will find much the same household income range as set for The Junction.

The existing structure is a boarded up vacant and blighted building facing the highway. Tens of thousands of people pass it every day. How would the image of the neighborhood be changed if the building were historically rehabbed and filled with residents?

People talk about rooftops driving commercial growth. What would having another 50 households in the neighborhood do for the commercial development goals of the neighborhood?

Anonymous said...

And if the Junction drives out owner-occupans on Hebert Street will that help "commercial development goals"?

Whose goals are those, if residents are vehemently opposed to The Junction?

As for the rehab quality, that doesn't matter when you are cramming people in Pruitt-Igoe style.

Three bedrooms means families. There is no lawn at the Junction! No place to play! The playground across the street is tied up by Confluence Academy week days.

I pity the children that will have shitty lives so that this developer can make another million dollars.

Chris said...

"The tenants will be working people paying their own money in rent."

Oh, so you've met all of the future tenants already? Amazing!

Anonymous said...

Ask MHDC who is served with the affordable housing they assist.

Anonymous said...

The issue here seem to be that ONSL feels left out of the decision making process. I thought you knew. You live in North St Louis. Your suceess is remarkable. However the City of St. Louis has never regarded North St Louis with any respect. How are you planning to fight thiis any chance of scrapping the plan?

Anonymous said...

all is moot now, but:

The rents were scheduled to be $640+/- for a 2 bedroom and $800+/- for a 3 bedroom. NO subsidy to the tenants. The project would have created a beautiful building with wage earner residents instead of a hulking eyeseore.

It's frustrating to see the anger at something many people do not understand. I agree the developer should have engaged the neighborhood better to preempt such negative feelings.

As for the 1/3 condo/market/low income idea, you would never sell the tax credits because the tax credit investors won't take a risk on the condo/market investment. And, I know of no lenders who will loan money for condos right now...they are overbuilt in St. Louis as it is. The junction was orginally proposed as a 60% low income, 40% market deal, but MHDC would not fund (and most investors would not buy) the deal. The investor market is even weaker now.

Heck yes the developer wants to make money. He wants to make lots of it too. But he will risk losing more than he could ever make to make this project work.

And Old North is GREAT at building and maintaining community relations.

Anonymous said...

No subsidy? Kruntchev told our group that he would accept Section 8 vouchers.

Think they do that in Clayton, Compton Heights or Lindenwood Park?

Didn't think so. That's where the investors live. they dump their tax credit projects on us poor folk. We DON'T want your government cheez!

Anonymous said...

Gotta take the Section 8 vouchers if you intend to get approved by MHDC anywhere. So, of course Kruntchev would take them. But, no private developer wants them as the entire tenant base. That's why investors require market studies to show demand from wage earners before they will invest in a property. There was such a market study done here and it showed the demand for non-section 8tenants.

Tax credits have done wonders for property values in areas like forest park southeast and will make a difference along 14th st. Many cities/neighborhoods fight for these things. It's much easier to stop a tax credit deal from coming to your neighborhood than it is to get them to come to your neighborhood because of the demand.

But, to each his own. It's your hood, and you've made a decision to turn this away for now. I just wanted to provide some facts that might help inform the discussion a bit.

Catherine Underhill Fitzpatrick said...

I am a descendant of Arthur John Meier, the third and last Meier who owned and operated the Meier & Pohlmann Furniture Company, founded near the Riverfront and later moved to Palm. I have a good deal of Meier family history and photographs from the A.J. Meier era, and earlier. I would like to see the building preserved in some format that befits its ties with St. Louis history and industry. A conversion to residential use need not be scaled to appeal only to people of wealth for it to be attractive, fuctional, and a catalyst for positive change in the area. Catherine Underhill Fitzpatrick