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Microdevelopers are bringing back neighborhoods

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Microdevelopers are bringing back neighborhoods one rehab at a time

By Tavia Evans

Of the Post-Dispatch

06/15/2004

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When George Brown bought a four-family flat in 1999, it had been an eyesore for years in the Hyde Park neighborhood.

He paid $12,000 for the house, in the 1400 block of North Park Place, at a sale of tax-delinquent property. Inside the house, plumbing and electrical systems had been stripped, and cabinets had been torn off the walls.

Still, Brown, the owner of Bottom Line Development, saw potential.

This neighborhood could become the next Soulard," he said. "It's conveniently located near downtown, close to the highway and (with) easy access to the airport. I plan to be here when this neighborhood comes back."

Microdevelopers like Brown are becoming part of the city's bigger plan to restore ailing neighborhoods one rehab at a time. Many operate with a handful of employees and single parcels of property.

Many work closely with city agencies, such as the St. Louis Development Corp., which allows them to acquire tax-delinquent and abandoned properties through its Land Reutilization Authority.

Rodney Crim, the SLDC's executive director, said the empty lots and boarded-up houses, especially on the city's north side, represent the opportunity to revive many neighborhoods.

"Small developers have been the key to taking (Land Reutilization Authority) parcels and turning them into productive reuse, or (they) rehab the property and agree to demolish and build new homes throughout the city," Crim said. "In every neighborhood across the city, you see some new development or rehab development going on now."

At Bottom Line Development, Brown handles much of the renovation but hires contractors to do carpentry and electrical rewiring. It has taken four years to convert the North Park Place property back into a single-family house with six bedrooms and three bathrooms. It recently appraised for $130,000, about 10 times the going price for row houses just a block away.

Ward 3 Alderman Freeman Bosley Sr. said he dissuades large developers from acquiring the tracts of vacant lots and abandoned property in his ward, which includes Hyde Park.

"The big developers took these big historic homes and turned them into multiple-family dwellings and received tax credits for it," he said. "They didn't bother with homeowners and only used rental units. The only way to sell this neighborhood is to bring families back."

Bosley has sent letters of recommendation to the Land Reutilization Authority on behalf of small developers who want to obtain property in his ward.

That enabled Ned Amos, who owns North Park Place Development, to buy two four-family houses for $5,000 each and convert them into two-family houses.

The gut rehabs cost $85,000 for each family unit. He hopes to target buyers who must live in the city, such as firefighters and police officers.

Microdevelopers face other hurdles, including obtaining funding from banks that are wary about rehabbing houses in these neighborhoods. Small-scale developers also must ensure that they have the know-how to take on the more-challenging aspects of such projects.

"Some of this is common sense. A developer has to know what's behind the walls, and it's hard to know what you're going to encounter, especially in a gut rehab," said Jerry King, president of RJK Inc., which is part of the Gaslight Square redevelopment.

Microdevelopers and their larger brethren throughout the city have been able to take advantage of historic tax credits.

Mark Benckendorf quit his job at Anheuser-Busch Cos. after 17 years to restore houses on the city's historic registry. He owns Historic Home Renovators LLC, which uses a dozen contractors to complete the work.

Most houses he rehabs are in the Benton Park neighborhood. Benckendorf said the only way he can make a profit is through the historic tax credits.

"We might put $200,000 of qualifying expenditures into property that will translate into a $50,000 tax credit to the developer," he said. "The intent there is to put all of the equity back into the property to improve the neighborhood and the house as much as we can."

In the 3100 block of Lemp Avenue, Benckendorf bought a dilapidated house from a private owner for $35,000 - "the worst house on the block," he said.

The 118-year-old structure was a gut rehab, and Benckendorf added touches such as cherry-wood floors and marble mantles in the living room and dining room.

He said it sold in December for $287,000. "That home had been inhabited by pigeons for 10 years, and we turned it into the best house on the block. We raised the profile of that section of Benton Park to one of the better neighborhoods around."

Tim Vogt, vice president of Millennium Restoration & Development Inc., said microdevelopers invest "a lot of sweat equity" in their projects. At 25, he used a loan from his mother, Claire Vogt, to buy his first property, a boarded-up three-story house in the 2900 block of South Compton Avenue in the Tower Grove East neighborhood.

Vogt and a carpenter stripped much of the woodwork by hand and replastered the walls. He used contractors to complete the electrical rewiring and sewer work.

Vogt said he broke even by selling the house for $195,000. The first house jump-started his company. Six years later, Millennium has 13 employees, and he hopes to average 20 rehabs a year, starting this year.

"Our homes have stabilized neighborhoods in some areas," Vogt said. "You see the neighbors doing more landscaping and improving their homes. It's encouraged more rehabs and development in areas that other developers looked over."

Local microdevelopers

Bottom Line Development

Founder: George Brown

Employees: Brown and contractors

Current projects: Four-family flat in the 3900 block of 21st Street

Phone: 314-359-2666

North Park Place Development

Founder: Ned Amos

Employees: 14

Current projects: Two-family flat at 1423-1425 North Park Place; old Shady Oak movie theater, Clayton

Phone: 314-220-8793

Millennium Restoration & Development Inc.

Founders: Claire Vogt and Tim Vogt

Employees: 16

Current projects: Fleur-de-Lis at Benton Park, mixed commercial and residential buildings at the southwest corner of Jefferson Avenue and Arsenal Street

Phone: 314-772-9200

Historic Home Renovators LLC

Founder: Mark Benckendorf

Employees: Contractors

Current projects: Renovations of 2408-2412 McNair Avenue, 2417 Arsenal Street, 3415-3417 Lemp Avenue

Phone: 314-413-0182

Reporter: Tavia Evans

E-mail: [email protected]

Phone: 314-340-8159

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