With gasoline prices averaging close to $3 per gallon nationally and not likely to drop substantially in the near future, more people are searching for places to live that will allow them to avoid driving their automobiles.
MLP Investments LLC is answering that demand in the St. Louis, Mo., area with Hanley Station, a mixed-use project just south of Highway 40 and within two blocks of a new MetroLink commuter light-rail station that opened this year in the Brentwood submarket.
By focusing growth around transportation centers rather than continuing outward sprawl, transit-oriented development helps to mitigate the problems of increasing traffic congestion, oil dependence, air pollution and, if you are a believer in the theory, global warming. Reducing the amount of time and stress that comes with having to inch one’s way along in a line of cars each day during the work week is another big benefit.
MLP Investments project manager Andrew Checkley says it’s the convenience factor that brings people to a location. “The urban infill projects we develop are convenient, particularly with commuter rail riders. And, Brentwood is conveniently located just 1.5 miles west of St. Louis, just a half mile south of Clayton and adjacent to the cities of Richmond Heights and Maplewood, all within close proximity to most major highways in the area,” he said.
The Frontenac, Mo.-based development company that was formed in 1990 by Stan McCurdy, Joe Leibold and John Porta has carved out a niche in St. Louis creating affordable, well-located market-rate housing by rezoning commercial sites to make way for town-center developments like Station Plaza, which consists of condos, apartments and retail built on the seven-acre former site of a Target store in Kirkwood, just south of Brentwood and right across the street from the city’s train station, and the $28 million Kings Landing on 3.1 acres in Creve Coeur that includes 152 apartments and 10,000 sq. ft. of restaurant, retail and office space. Kings Landing opened in May 2006. “Hanley Station is a modification of those vertical town-center mixed-use products that have residential on the upper levels and commercial on the lower. Hanley Station contains all use types on their own parcel. We call it horizontal mixed-use,” said Checkley.
Hanley Station’s 150 condos are housed in three four-story wood-frame buildings adjacent to two five-story garages that contain a total of 835 parking spaces. Those structures provide direct access, via covered walkway, to each level of the condo buildings. Built on the site of two former industrial warehouses, Hanley Station also includes a 123-room Marriott Spring Hill Suites hotel, a 6,800 sq.ft. Houlihan’s Restaurant and Pub that opened in January, two buildings with standard in-line retail, including Intaglia Home Collection, a contemporary furniture store that came online this summer and a third building that will open in August with a Jimmy John’s Sandwich Shop and a Camille’s Sidewalk Cafe.
The project is surrounded by a bevy of other retail venues, including the upscale St. Louis Galleria mall and Maplewood Commons, a big-box center with a Wal-Mart, Sam’s Warehouse and Lowe’s.
Since MLP was chosen by the city to develop the Hanley Station site, the project changed from a rental community that was scheduled to start in spring 2004 to a for sale development. The original plans called for approximately 300 apartments above 40,000 sq. ft. of ground-floor retail. “The project took on a different shape from the original design and we went from an all for-rent to an all for-sale product because its location in the market was particularly prime and very sought-after,” said Checkley.
The nearly $100 million revamped project, which received construction financing from locally based National City Bank, finally got under way at the end of 2005 and is on target for a July 2008 completion. The $50 million residential and parking components are being built by MLP’s in-house construction arm, Pioneer Construction. Altman Charter is building the project’s retail portion. First residential occupancy is scheduled for January 2008 with project completion in July.
Buying a condo is a lifestyle choice, and the two demographics that are redefining urban living are the baby boomers, many of whom are empty nesters, and the echo boomers, born between 1976 and 2000. Both groups tend to favor a lock-and-leave environment that allows them to work or attend school and play, dine and shop within walking distance of their homes, while leaving the maintenance to someone else. Living close to mass transit is high on wish lists of area home buyers and renters.
Larry Wilson and Ryan Wachter are among the 85 buyers who already have purchased condos at Hanley Station. Although neither has immediate plans to rely daily on the light-rail system to get to and from work, they like having the option, especially since the March start of the massive $535 million reconstruction of the Highway 40/I-170 interchange that will tie up traffic alternately in both directions over the next 30 months, making life more difficult for commuters west of Downtown St. Louis. While area residents will gain a wider road and a better commute at the end of the process, they will feel the pain in the shorter term. Meanwhile, MetroLink ridership in St. Louis is expected to increase this year to 21.9 million riders, a 32 percent increase from nearly 16.6 million last year.
Wachter, a 27-year-old consultant for KPMG, is moving to Hanley Station from a rental in Clayton. He occasionally uses MetroLink to commute to work and thinks once he takes possession of his Hanley Station condo, he will use the light-rail line more often for both work and play. He especially looks forward to riding MetroLink when he attends baseball games at Busch Stadium downtown.
Wilson is a real estate professional with the new home division of Coldwell Banker Gundaker who, if he doesn’t actually move into and occupy his Hanley Station condo, sees the purchase as an excellent income-producing investment.
Hanley Station provides an affordable alternative to the higher priced condos and historic conversions in Downtown St. Louis and newly built luxury high-rise units, some with price tags averaging $900,000, that are under construction in nearby Clayton, where the median price of a single-family home is $425,000.
Mixed-use projects rising in Clayton include Mark S. Mehlman Realty’s Crescent that will deliver 73 condos this fall and add a parking garage, 100-room hotel, retail and office space in a subsequent phase, and the 150-unit first phase of Orchard Development Group’s $150 million Trianon, which is being built in close proximity to a Ritz-Carlton hotel and across the street from the Forsyth MetroLink station, where condos are priced from $375,000 to $1 million.
“We were able to tweak the Hanley Station development to generate a price point that was very attractive and marketable for that location,” said Checkley. Ones and twos are selling from $180,000 to around $290,000. Community amenities include an outdoor swimming pool and cabana-style bar area, a pet park and a fitness center. “Our location offers a solution and an alternative to long commutes or finding new routes,” said Checkly.
Just because MLP swapped out apartments for condos at Hanley Station doesn’t mean the company is out of the rental game. “Garden apartments are really our sweet spot and we have multiple developments underway. We just finished the 224-unit Adobe Ridge Apartments in the Phoenix metro and we’re under construction on the 250-unit Aventura at Providence, our second apartment project in Nashville, and the 216-unit Plantation crossing Apartments in Lafayette, La. We would consider doing more apartments in St. Louis, but we just haven’t found the right location,” said
Checkley, who is looking for opportunities in those markets, as well as in Denver. Checkley thinks the St. Louis metro is poised to experience a fair amount of growth over the next 10 years. At the close of Q1, the market recorded an overall apartment vacancy rate of eight percent, down from 8.6 percent the previous year. Rents increased 2.4 percent and steady job growth is expected to continue into the second quarter as Walton Construction and the Lawrence Group expand operations in the region.
“St. Louis has many draws, including a major airport, renowned hospitals and universities and a professional sports team. And, we are a transportation hub as far as river systems. Plus, the cost of living is significantly less here than on the coasts. MLP really has a niche in St. Louis for finding mixed-use projects. The three we’ve developed are located in the top sub-markets of the St. Louis metro area,” said Checkley.
