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Three More Wash ave Buildings to get a new life

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Steffen invests $32 million more on Washington Avenue

Margaret Jackson

Developer John Steffen plans to invest about $32 million redeveloping three more Washington Avenue buildings he's buying from real estate investor Larry Deutsch.

Steffen, president of Pyramid Construction Co., is buying the 83,000-square-foot Curlee Building at 1001 Washington; the 52,000-square-foot Dorsa Building at 1007 Washington; and the 55,000-square-foot building at 1015 Washington. The deal is expected to close in June.

Pyramid plans to redevelop the downtown buildings into a mix of office, residential and retail space, said Matt O'Leary, vice president of commercial development at Pyramid. National City Bank, which recently acquired Allegiant Bank, is financing the acquisition of the buildings.

"This is our largest acquisition to date," O'Leary said. "These are good buildings that have a lot of inherent value in their shells and the improvements that have been made to them over the last 15 years. They occupy a crucial location on Washington Avenue. We think that by developing these buildings in conjunction with the 901 Washington building, we'll be finishing up the neighborhood and raising the value and desirability of all the buildings in the area."

The buildings' tenants include Phoenix Creative, which occupies the top floor of all three buildings, and William Ittner Architects and Veritas Advertising in the Curlee Building. The leases are in various stages, but all expire by the end of 2006, O'Leary said.

Pyramid already has had interest from a furniture store and an architectural firm for the 35,000 square feet of retail space it's planning to develop, O'Leary said.

"If we could get a critical mass of some type of retail activity it could become a retail hub, whether it be furniture or clothing," said Tom Reeves, executive director of Downtown Now! "It's really exciting because these deals are starting to happen quicker and quicker. The (Downtown St. Louis) Partnership is having discussions with two or three other restaurant operations. It feeds on itself. The pioneering stage is over, and people believe that this is a real place to do business."

The buildings are directly across the street from the Merchandise Mart, which HRI Properties redeveloped into 213 apartments and where Lee J's clothing recently opened and Kitchen K restaurant is located.

"Presuming that Steffen is going to move ahead in the relatively near future, we're certainly supportive," said Ron Silverman, vice president and regional manager of HRI's St. Louis office. "It's a very bleak view from our building to the north. I can't say that I'm not a little jealous, but we're otherwise tied up with our current commitments."

HRI plans to start work on redeveloping several buildings in the historic Cupples Station warehouse complex near Busch Stadium into 192 residential units this summer.

A number of Pyramid projects have been financed by Allegiant Bank, including the purchase last month of the 150,000-square-foot 901 Washington Ave. building from Deutsch, who many downtown boosters and developers say has blocked progress in the past. Steffen is renovating the building into 72 loft condos. The building, formerly Bank of St. Louis, sat in limbo since 1992, when Deutsch filed a lawsuit over its purchase. Deutsch could not be reached for comment.

"The other projects we've financed for Pyramid have been very successful," said Brian Davies, vice president of commercial lending at National City/Allegiant.

Two weeks ago, National City Chairman Dave Daberko visited St. Louis and toured the Sporting News Building at 2020 Washington Ave., which Pyramid is converting into 103 condominiums.

"The Cleveland real estate division gave its blessing to this deal," Davies said. "It says a lot for National City's confidence in Pyramid and what they're doing. We felt really good about that. They've been very supportive of our projects."

Over the years, Pyramid has made substantial investments downtown. It is redeveloping about 800,000 square feet in three buildings in the Old Post Office District, including the $52 million conversion of the Paul Brown Building into 222 apartments, 20,000 square feet of retail space and 130 parking spaces. The other buildings it owns in the district are the Arcade and Wright buildings. Steffen has said he expects to have a deal put together for those buildings by the end of the year.

Other Pyramid projects are the redevelopment of the Railway Building at 1619 Washington Ave. into 40 condominium and the Elder Shirt Lofts building at 703 N. 13th St. into 30 condominiums.

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