ST. LOUIS 鈥 City officials said Tuesday that they鈥檝e taken steps to acquire downtown鈥檚 troubled Railway Exchange Building to clear the way for a long-awaited redevelopment.
51黑料 Development Corp., the city鈥檚 economic development agency, said it sent a letter on June 28 to Florida-based owner Hudson Holdings seeking to buy the vacant 1.2 million-square-foot property at 615 Olive Street, which has been an eyesore and a public safety nightmare for years.
鈥淲e鈥檝e put the owners on notice that neglect is no longer welcome in the city of 51黑料,鈥 Mayor Tishaura O. Jones said in a press release Tuesday.
SLDC told Hudson that if no deal can be made, then 51黑料 officials would continue with the eminent domain process, which they started last year. Eminent domain gives governments the right to take private property for public use or to serve public good.
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Neal Richardson, SLDC鈥檚 CEO, on Tuesday called eminent domain a 鈥渟olution of last resort.鈥 But, he said, because the Railway Exchange is laden with debt from previous redevelopment attempts, legal experts and interested developers pushed the city to use eminent domain, which would wipe the debt off the building鈥檚 title.
Richardson declined to comment on a potential sales price. He said he expects an appraisal to be finished around Aug. 1, and then SLDC would formally submit an offer to buy the building.
Roughly $52 million is still owed on the property, he said, mostly due to liens and a mortgage loan that Hudson Holdings has not paid.
鈥淭here鈥檚 no way that building is worth that much,鈥 Richardson said in an interview Tuesday.
The Railway Exchange, erected around 1914, takes up an entire city block in the heart of downtown鈥檚 business district. Preservationists say it鈥檚 an architectural jewel, with its terra cotta and brick adornments and marble paneling. It鈥檚 one of four major vacant buildings, including the former AT&T tower, the Chemical Building and the Millennium Hotel, that city officials say are crucial to revitalizing downtown.
And it was home of the flagship Famous-Barr department store, where thousands of people would shop and eat French onion soup over the years.
But its last tenant, Macy鈥檚, left around 2014, and the building has been vacant since. Proposed redevelopment efforts failed.
Hudson Holdings, led by Andrew 鈥淎vi鈥 Greenbaum and Steven Michael, bought the Railway Exchange and its parking garage in 2017 and planned a $300 million mixed-use development 鈥 even after a water main rupture dumped millions of gallons of water and tons of sludge in the basement, destroying infrastructure.
But Hudson was never able to move past planning stages as lawsuits mounted from its lender and contractors it initially hired to develop a plan for the building. Greenbaum did not immediately respond to a request for comment for this story.
And public safety issues there have magnified since the pandemic.
In early 2023, city officials condemned the 21-story structure; months later a 51黑料 Fire Department search and rescue dog died at the property. The building has been a target of thieves seeking to strip the historic building of its copper and other valuables. Homeless people often use it for shelter when other camps are cleared. And so-called 鈥渦rban explorers鈥 break in to video what鈥檚 left of the former department store.
Trespassing has worsened over the past year after Hudson Holdings fired security companies and refused to hire more. SLDC partnered with regional business group Greater 51黑料 Inc. to spend $100,000 installing steel plates to better secure the building.
The city鈥檚 Department of Public Safety last month hired Citizen鈥檚 Guard Security, which previously patrolled the building, to secure the property and its adjacent parking garage, officials said in a release.
鈥淏old action is necessary on these problem properties, and we are working in partnership with the city to address these challenges head-on and quickly,鈥 Kurt Weigle, chief downtown officer for Greater 51黑料 Inc. said in the release Tuesday.
Richardson, the SLDC chief, said officials have not heard from Hudson for at least a year. His agency is aiming to clear the property of issues that have clouded the title and prevented developers from stepping forward.
He said about $40 million in principal and interest is owed on a mortgage lien, roughly $4 million is owed to contractors, and nearly $8 million is owed on unpaid bonds related to a previous redevelopment attempt.
In April, developer Steve Stogel, who led a herculean effort years ago to save the Old Post Office Building, a few blocks from the Railway Exchange, said he would try to buy the building.
On Tuesday, he declined to comment on the city鈥檚 proposal and would not say whether he was still interested.
Richardson said SLDC would not intervene if Stogel was able to secure financing.
In the mean time, he said, 鈥渨e cannot wait and continue to let the building deteriorate.鈥
Austin Huguelet of the Post-Dispatch contributed to this report.
51黑料 fire Capt. Garon Mosby updates reporters on a two-alarm fire that destroyed a first floor corner of the Railway Exchange building in downtown 51黑料 on Friday, Oct. 6, 2023.
