News

Wrecking Crew

Slay and his Old Post Office plan allies knock down two rivals with hardball and humiliation

By Elizabeth Vega 

It's hard to miss the telltale signs that things are getting much uglier in downtown St. Louis.

There are the bigger-than-life posters, plastered on the front of the Century Building, that feature the face of Steve Stogel, the flinty president of DFC Group Inc. and a major player in series of big-ticket projects that are supposed to rescue the city's hollow core.

This is the in-your-face work of a loose-knit group known in some quarters as the 10th Street Loft Taliban, a hardcore faction of downtown residents fighting Mayor Francis Slay's plan to revitalize the Old Post Office and raze the Century, a 103-year-old marble edifice, to clear space for a parking garage.

Stogel is the target of their guerrilla banner campaign because the mayor's plan relies on his financial wizardry at putting together complicated deals that mix public and private money. And that makes him a prime target of increasingly rancorous rhetoric from downtown loft dwellers and others who want the Century saved and fear that the city's high-dollar blueprint for the Old Post Office may hurt the smaller-scale residential and retail development they see as the true salvation for a dead downtown.

A massive dose of heavy-handed retaliation from Slay's aides and his development allies has added a nasty tone to the conflict. This show of force was directed against two rival downtown developers, Craig Heller and Kevin McGowan, who went public about three weeks ago with an alternative plan for rehabilitating the Old Post Office area that gave heart to the loft-dwellers and caused state legislators who are being asked to help fund the mayor's renovation plan to sharply question the city's proposal.

The multifront assault against Heller and McGowan, featuring an ominous warning that they'd be out of business in a year unless they knuckled under, won their silence, got them to pull their proposal less than two weeks after they aired it and forced them to sign a press release of support for Slay's plan that is startling in its degree of public humiliation.

Clearly Slay's answer for a blighted city core -- a $73 million deal that features Stogel's outfit and DFC Group -- has turned into a Scud war. A lot is at stake -- a big-money deal, the future of downtown and the image of decisive action the mayor wants to portray on this project and the proposed new stadium for the Cardinals.

So it shouldn't be too surprising that the city used all its weapons of permits, persuasion and raw power against Heller and McGowan. This is what a big-city mayor is supposed to do when a pet project is challenged.

What is surprising, sources say, is the breadth and scope of the retaliation and the fact that its target is Heller, the poster boy for downtown residential development and a darling of a key component of the coalition of voters who put Slay in office.

Jeff Rainford, Slay's chief of staff, says his boss didn't order a strong-arm campaign against the two maverick developers. He also blasts Heller and his allies for starting a "whispering campaign" against City Hall to cover up the shaky financials of their own plan and save face with their vocal loft-dwelling supporters.

"Neither city government nor the mayor threatened or coerced Craig Heller -- either directly or indirectly," says Rainford. "Did not happen -- just flat-out did not happen.... Craig Heller ought to take it like a man instead of blaming the big bad wolf or saying the sun got in his eyes or the dog ate his homework."

But sources familiar with the conflict tell a different story.

Before the two developers even unveiled their plan at a legislative hearing in Jefferson City, permit applications and hearings for other Heller and McGowan projects were pulled from the agendas of several city agencies and placed on indefinite hold, sources say.

This includes a Feb. 27 hearing before the St. Louis Development Corp. on a routine request for an extension of Heller and McGowan's claim on the city-owned abandoned property nominally sold to them for their Mississippi Loft project in Lafayette Square.

Deals such as this one contain what are know as "reverter clauses," which automatically transfer a property back to city ownership if a developer fails to move forward by a certain deadline. Extensions are routinely granted, but Heller and McGowan's application was abruptly pulled from the agenda under the orders of deputy mayor Barb Geisman, sources say.

When first asked about the postponement, Gee Stuart, SLDC's director of real estate, says: "I obviously report to Barb Geisman, but the entire staff was in agreement."

This action placed Heller and McGowan's project in financial jeopardy and scared their partners and financial backers on other projects in the city, sources say, causing them to put pressure on the two developers to withdraw their rival plan on the Century.

Geisman also labeled Heller an 11th-hour opportunist more interested in playing to the crowd that wants to save the Century Building than putting forward a comprehensive plan that will bring revive one of the biggest hunks of abandoned office and retail space in the city.

Heller says he first approached Geisman in January with his alternative, which focuses only on the Century and Syndicate buildings, not the Old Post Office itself. He says his plan is an attempt to address at least one neighborhood concern -- a bus-transfer station in the proposed garage for the Century site that some believed would kill foot traffic in the area and discourage the development of stores and shops.

But Geisman says Heller was making both a power play and a pitch to bypass the city's normal channels, including the request-for-proposal process: "They [Heller and McGowan] promised to make the opposition go away if we would let them develop the Syndicate. Their proposal clearly showed them taking advantage of the benefits of the Century garage. To me, it appeared they wanted the Syndicate without going through an RFP process, and at a bargain price."

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