Companies find profitable to move to stay in downtown By Riddhi Trivedi-St. Clair ST. LOUIS POST-DISPATCH Friday, May. 25 2007 Downtown St. Louis has been good to Asynchrony Solutions, and city leaders
point to it as a model for other businesses.
Since moving to the King Bee Hat building from Earth City in 2001, the software
development company has grown to 85 employees from 18.
Asynchrony started with 9,000 square feet on the second floor of the
century-old building at 1709 Washington Avenue, not to be confused with the Bee
Hat building farther east. It now has 19,000 square feet and occupies the
entire first floor, which had been vacant for more than a decade, and a portion
of the third and fifth floors.
Asynchrony moved downtown in part because it receives tax benefits not
available elsewhere in the area. Local, state and federal officials say tax
breaks increase the tax base and revitalize historic buildings.
And it appears to be helping to slow down, if not reverse, the tide of
companies moving out of downtown to new office buildings in the suburbs.
Having a good concentration of office tenants downtown, like Asynchrony, is
often overlooked in favor of efforts to attract residential and retail
development, said Jim Cloar, executive director of Downtown St. Louis
Partnership.
A robust office market helps attract other businesses like restaurants and
retail outlets. Those, in turn, draw residents downtown and provide an employee
base that can bring in more businesses, Cloar said.
Downtown advocates and city officials have an uphill battle. One often-cited
concern is the city's income tax, said Lisa Curran, director of leasing and
management for the Lawrence Group, based in St. Louis.
However, low-interest loans, tax abatements and tax credit programs are helping
owners mitigate the impact of the income tax.
Such programs help lower the cost of developing an office building, and
landlords are able to offer lower lease rates, said Chris Desloge, of Maryland
Heights-based Tenant Rep Agency, which represents office tenants in lease
negotiations.
"Historically, rents downtown have been very favorable compared to office
buildings (elsewhere) that would meet our needs," said Al Hennebohle, a partner
in St. Louis-based Greensfelder Hemker & Gale.
Over the last five years, the downtown law firm has grown by 50 percent. It now
occupies six floors in the Equitable Building on Broadway. When the company's
lease was up for renewal recently, the executive board chose to stay downtown
and even expanded its space.
The Lawrence Group recently was able to attract the St. Louis offices of
Minneapolis-based accounting firm LarsonAllen from Town and Country to the Park
Pacific building at 13th and Olive streets downtown.
Curran said she helps prospective tenants navigate through the process and find
tax incentives.
Asynchrony found government-sponsored incentives, including a venture capital
investment by the state and contracting preferences for federal government
projects.
The company also offers subsidies to employees who live downtown. It receives a
tax break if a portion of its work force lives downtown, Curran said.
Downtown offers more than tax benefits.
The convergence of interstate highways there provides easy accessibility,
Hennebohle said.
"Being downtown has really helped us attract and retain employees, which is
critical," said Robert Elfanbaum, chief executive of Asynchrony.
The company plans to grow by 50 percent this year and already has added 10 new
employees.
Often, the buildings are a big attraction, Curran said.
"They offer a lot of personality to creative-type and professional firms that
are seeking something unique," Curran said. "These buildings have beautiful,
unique architecture and offer a status symbol and branding opportunities."
Elfanbaum found that out when his company was hunting for space.
"The new office buildings don't seem as amenable an environment for a high-tech
company," he said. "Here, we have lofty ceilings, lots of windows and open
floor space versus lots of walls and cubicles."
Those amenities are not available in standard office buildings unless companies
are willing to spend a lot of money customizing their space, Desloge said.
Downtown offers companies a chance to network and build business relationships
with other organizations located there, in part because people can easily walk
about it.
"There has been a sea change (in the downtown atmosphere) and combined with the
groundswell of residential development creating a population base, it is the
genesis of something long-term," Desloge said.
rtstclair@post-dispatch.com | 314-340-8206