More Financing Arranged for Failed Mall

ST. LOUIS-The $35 million redevelopment of the four-level mall at the One City Centre complex recently received another boost, with Chicago-based Aries Capital providing $17.5 million in New Market Tax credits for the project. The 540,000-square-foot mall at Sixth and Washington downtown, also known as St. Louis Centre, has been vacant since 2006, alongside a similarly struggling 25-story office building.

Simon Property Group developed the $95 million mall in 1985, with 120 stores and 20 restaurants, the largest urban shopping mall at the time. However, financial troubles caused the close soon after it was purchased by the former Pyramid Co, which had planned a condo development but collapsed itself in 2008. Environmental Operations Inc. reportedly bought the mall after foreclosure by Bank of America for almost $13 million, and has teamed with Clayco on the redevelopment of the entire office and retail complex.

In April, the Missouri Development Finance Board closed a $14 million loan for the mall project, enabling construction to begin on a new parking garage at the site. The 750-car garage will take up two of the floors, with about 100,000 square feet left on the first and second floors for retail stores, a movie theater and a banquet hall.

Neil Freeman, president of Aries, tells GlobeSt.com that the mall qualifies for the tax credits because the local population has a 17% poverty rate and high unemployment. “We’ve received about $257 million under this program to invest in low-income communities to create a positive economic impact. Downtown St. Louis has struggled a bit, but the downtown needs to be revitalized, and this is the perfect place for such a plan,” he says. The mall project should be complete by late 2011, Freeman says, but there has not been any specific retail tenants named for the site.