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Another Highrise Proposed for the Central West End

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It will replace the Doctors Building built in 1953.

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Bruce Mills to add $50 million apartment development to real estate empire

Heather Cole

Bruce Mills is turning his attention and end-of-career energy to the Central West End with a proposed $50 million apartment project.

Mills Properties has the 11-story medical office building on the northeast corner of North Euclid and West Pine in the Central West End under contract and plans to demolish it to make way for a two-building apartment complex. The project would be the first apartment development for Mills in the neighborhood, though the company has owned the West End Terraces on Lindell for 17 years.

Mills Properties is trying to make sure "the numbers work" for the project, which would have a five-story building and a 12-story building along Euclid, said Mills, chairman and chief executive of the company. Financing is not yet in place, and Mills is talking with several architects, but hasn't made a final selection yet. If the project moves forward, the 200- to 240-unit development would start sometime next year, he said. The office tenants eventually have to move if the project goes forward.

Mills Properties works with several major local banks, including Bank of America, Union Planters and LaSalle, but it's too early to have them involved, he said.

Apartments would rent from $650 to $2,000 a month and be a mix of one-floor, garden-style units with an internal layout similar to a suburban apartment; lofts; and 10 penthouses. Rooftop penthouses would have patios with room for planters and trees.

Mills hopes the project will attract people from the county to the city. "That would be our objective -- to provide something that would appeal to not only the city dwellers, but people used to living in the suburbs." The buildings also would fit into the community and not be something "modern and futuristic."

Mills Properties, which prefers to work on in-fill projects, tries to make its developments unique, and has spent about $1 million on landscaping for some suburban projects, using various landscaping companies from around the United States, he said.

For example, one of Mills' more recent projects, the $23 million Boulders at Katy Trail in St. Charles, had 3,600 tons of boulders included in the landscaping. For urban projects, such as the Central West End, the standout will hopefully be the uniqueness of the design and quality of the project, Mills said.

Mills, 64, said he likes to think he's "kind of at the end" of his career. His son, Kirk, runs the day-to-day operations of Mills Properties, leaving Bruce free to work on projects like the one planned for the Central West End. "I like to do things I think are going to be important. (Also), obviously we believe there's an opportunity there."

While the cost of the project is high, there should be high demand for the apartments, said Keith Kramer, real estate consultant with Keith M. Kramer Associates in St. Louis. The building to be torn down, at 100 N. Euclid, has been available for some time, and several groups have looked at buying it, Kramer said."From what I gather, it's not a cheap investment in terms of a purchase price."

Kramer said he didn't know what the asking price was, but real estate sources said owner Kugler Properties was seeking about $5 million.

The Central West End is possibly the hottest market in St. Louis, with investment in redevelopment of Maryland Plaza and the former Saks 5th Avenue building, as well as the $300 million in development by Washington University in the area, said Matt Harvey, regional asset manager for real estate investment trust Sterling American Properties. That's driving up real estate prices. Even so, the development must make sense, or Mills wouldn't consider it. "They must know they'd get a return on their investment by building something there."

The Central West End is a very strong market for apartments, because of its proximity to MetroLink, shops and restaurants, and major employers, such as Barnes-Jewish and St. Louis Children's hospitals and the Washington University Medical Center, Kramer said. The focus on building a life sciences industry in the area also will add jobs. The rents for the proposed complex also are "on the low side," he said. "They'll be standing in line to rent at those prices."

Rental prices under $900 qualify those apartments as "affordable," said Wendy Timm, chief financial officer and chief operating officer for Conrad Properties, which is developing the Metro Lofts project, a three-building, 213-unit new construction apartment project at 4545 Forest Park Parkway set to be finished late this year or early next year. If an apartment complex has a mix of at least 20 percent affordable apartments, the development can qualify for tax-exempt financing through Fannie Mae, said Bob Saur, chairman of Conrad. Affordable is defined by the median income in the area, with the units costing 50 percent to 60 percent of ordinary rents. Some developments with affordable housing also qualify for Missouri Housing Development Commission tax credits, Kramer said.

Even if tax credits make up only 4 percent to 6 percent of a deal, it can make the difference as to whether it makes sense or not, Sterling's Harvey said. Demolishing the building for apartments probably is the "highest and best" use for the site, he said. "(Mills Properties) certainly would have the financial wherewithal to do it and certainly would have the debt sources to do it, I would suspect. They're very capable."

Conrad Properties is using the Fannie Mae tax-exempt financing on its Metro Lofts project.

Four months after leasing started at Metro Lofts, 65 apartments have been rented. Rents are $900 up to $2,300, with a few in the high $800s as part of a set-aside of affordable apartments, Timm said. "A big distinction is the new construction, versus 50-plus-year-old property," Timm said. What's also helping sell the apartments are their proximity to the Barnes-Jewish medical campus, she said.

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