ST. LOUIS — A Memphis developer has purchased the historic Butler Brothers building on Olive Street, betting that momentum around Union Station and a new Major League Soccer stadium will finally make feasible a rehab of one of the largest empty buildings in the Downtown West neighborhood.
A company affiliated with closed on the building at 1717 Olive Street last month. The company focuses on “adaptive reuse of historic buildings in urban communities around the U.S.,†said Gary Prosterman, the firm’s president and CEO.
Development Services Group is still making plans for the building, Prosterman said.
“What we can say is we were attracted to it because we do believe in the momentum in the Downtown West area, but we’ve got to get much more immersed in the community,†he said. “These are big, long, hard projects.â€
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At over 700,000 square feet, the 1906 structure built for the Butler Brothers wholesale firm of Chicago covers a whole city block between 17th and 18th Streets. When it was constructed, it was said to be the “largest structure in America occupied by a single wholesale concern,†according to the Washington Avenue Historic District’s nomination to the National Register of Historic Places. It has sat mostly unused for over a decade under the ownership of a New York real estate investment firm, . Efforts by the company to market the Butler Brothers building as a structure with space for as many as 350 apartments drew little serious interest.
Prosterman said “the most logical component†would be to rehab the structure mostly as apartments, with ground floor restaurants and bars that could cater to soccer fans in the area for games at the stadium under construction near Olive and 20th streets.
“Think soccer,†he said. “Think 2023 when the pandemic is behind us.â€
Providing an assist in the deal was a real estate investment entity affiliated with the new Greater St. Louis Inc. — the private business group created by the merger of the St. Louis Regional Chamber, Civic Progress and Downtown STL Inc. The group has maintained a “patient capital†fund that assists with what leaders view as catalytic projects. It helped Kevin Bryant of Kingsway Development acquire property near Delmar Boulevard and Euclid Avenue for an ambitious redevelopment plan. It also recently provided some financing for developer Green Street’s plan for 160 apartments near The Grove, about half of which will have below-market rents for the popular area.
Greater St. Louis officials say the Butler Brothers building is one of the major real estate projects that need to be finished downtown, along with the empty AT&T office skyscraper and the equally massive Railway Exchange building. The group’s Catalytic Holdings LLC provided a $1.5 million loan for the transaction, on top of financing from FirstBank of Tennessee.
“We are pleased to play a supportive role in financing the acquisition of the historic Butler Brothers building, helping an experienced national developer acquire this asset for development,†said Dustin Allison, Greater St. Louis Inc. senior vice president and chief real estate investment officer. “This acquisition supports our efforts to revitalize the urban core, as it better positions this long-vacant building for redevelopment.â€
Prosterman has a successful track record around the country and in his home city of Memphis. He pointed to Development Services Group’s 2016 rehab of the historic Chisca Hotel, which turned an empty building on a prominent corner near Beale Street into apartments. More recently, the developer helped turn a former Wonder Bread factory and 11 adjacent acres of former industrial uses into apartments and offices.
Prosterman said his firm usually isn’t the “pioneer,†or the first developer into a neighborhood. But it does like to follow and take on the “bigger, dirtier project.â€
“We’ve done similar projects in similar markets where the area was turning like this area appears to be,†Prosterman said. “And they’ve turned out very well.â€
