ÃÛÑ¿´«Ã½

JEFFERSON CITY — Area leaders hope a proposed Missouri tax credit program will entice developers to tackle two of ÃÛÑ¿´«Ã½â€™ most difficult, yet important, real estate projects: the empty AT&T Tower and the historic Railway Exchange building.

A new tax credit program introduced in the Legislature would offer incentives to developers who convert unused office space, much of it mothballed amid a shift to remote work, into new apartments and retail.

Backers of the legislation say it’s particularly crucial for downtown ÃÛÑ¿´«Ã½, where a quarter of the office space was vacant at the end of last year. That’s well above the 16% vacancy rate commercial real estate firm CBRE measured across the metro area.

“With this legislation, Missouri really has a tremendous opportunity to become a national leader in the conversion of vacant, unproductive office space into vibrant residential space in downtowns and main streets,â€� Adam Kazda, vice president of government relations for business group Greater ÃÛÑ¿´«Ã½ Inc., told the Missouri House Economic Development Committee during a hearing Wednesday. “This is a top priority of the ÃÛÑ¿´«Ã½ business community.â€� 

Developers and city officials across the country are looking at ways to turn excess office space in a post-pandemic world into apartments to reinvigorate now-sleepy central business districts. The find federal funds to help with the often-expensive conversions. 

The proposed state program, called the “Revitalizing Missouri Downtowns and Main Streets Act,� would create a new tax credit that would reimburse developers 25% of the cost of converting office buildings into other uses, including residential and retail. The office buildings would have to be at least 25 years old to qualify, and certain “main street districts� across the state would be eligible for slightly higher 30% credit reimbursements.

The legislation authorizes up to $100 million in annual tax credits for the program. Half of those credits are carved out for the conversion of buildings larger than 750,000 square feet, a provision aimed at attracting developers for ÃÛÑ¿´«Ã½â€™Â two massive empty office buildings: Railway Exchange and AT&T. 

The House bill’s sponsor, Rep. Travis Wilson, R-St. Charles, said there has been talk of redevelopment plans for the two buildings for years, and the private market has been unable to make the projects work, even before the pandemic and high interest rates. 

“When you have a vacant building of that size in a city like ÃÛÑ¿´«Ã½, it really does create just a litany of problems,â€� said Wilson, who has worked in economic development for the cities of St. Charles and Florissant. 

A hearing on the bill in the Missouri Senate is scheduled for Tuesday morning. Sen. Steve Roberts, D-ÃÛÑ¿´«Ã½, is handling the legislation in that chamber, and he said it could help make redevelopment of the two giant, empty buildings financially feasible. Decreasing vacancy and increasing foot traffic downtown in turn helps reduce crime, he added. 

“There’s no quick fix, but legislation like that, developing vacant spaces and nuisance properties, is a way to start chipping away at the problem,� Roberts said.

The 44-story AT&T tower at 909 Chestnut has been empty since 2017, when the telecom giant relocated employees to nearby buildings. The Railway Exchange has been largely empty since the Macy’s store there closed in 2013. 

Wilson said he remembers taking his family during Christmas to the downtown Macy’s when it was still located in the Railway Exchange. He called the building, which served as the headquarters for May Department Stores until the retailer’s sale in 2005, a “jewel of architecture� and said the state can accomplish other goals such as reducing crime by helping to attract foot traffic and reinvestment downtown. 

It’s not the first time Wilson has assisted ÃÛÑ¿´«Ã½ with one of its priorities. He carried a bill last session eliminating the city’s residency requirement, which had become a hurdle to filling open positions in many understaffed city departments. 

“Yes, I represent St. Charles and I live in St. Charles County, but we are all affected by ÃÛÑ¿´«Ã½,â€� Wilson said. “ÃÛÑ¿´«Ã½ is the No. 1 economic engine for the entire state. What is good for ÃÛÑ¿´«Ã½ is in turn good for the state in general. If we can help the city do well, and help the city of ÃÛÑ¿´«Ã½ thrive, then that will help our entire region.â€�

The legislation is HB  in the House, and SB in the Senate.

Steph Kukuljan of the Post-Dispatch contributed to this report.

Editor’s note: Corrects the number of and link to the House bill.