St. Louis Mayor Cara Spencer is betting on downtown revitalization as the centerpiece of her administration, aiming to tackle long-standing issues like population loss and post-Covid office vacancies. The city’s downtown has struggled with landmark buildings, such as the 44-story AT&T Tower and the historic 21-story Railway Exchange, sitting empty for years, leading the Wall Street Journal to call it a “real estate nightmare” in 2024.
Spencer remains optimistic. “Downtown St. Louis is a sleeping giant,” she told Smart Cities Dive. Local business leaders share her confidence. Robert O’Loughlin, CEO of St. Louis-based Lodging Hospitality Management, believes the city’s assets—like its world-class zoo, Forest Park, and the Gateway Arch, which draws 1.5 million visitors annually—outshine competitors such as Indianapolis and Kansas City combined.
Revitalization Gains Momentum
While other Midwestern cities have invested billions in downtown development, St. Louis has lagged, until now. A trio of major initiatives is set to change that. In July, Missouri Gov. Mike Kehoe signed HB 3231, the Missouri Downtown and Rural Economic Stimulus Act, creating millions in tax incentives for downtown innovation zones and office-to-residential conversions.
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“This law recognizes the critical importance of downtown St. Louis to the state’s economy,” said Ron Kitchens, managing partner of Greater St. Louis, an economic development nonprofit. The bill allows cities to retain 50% of new state sales and income taxes for public safety or infrastructure, and Spencer highlighted a provision for rebates on large buildings over 750,000 square feet.
Another key piece is a $55 million downtown redevelopment fund, funded by a lawsuit settlement after the St. Louis Rams moved to Los Angeles. Along with HB 3231, this revitalization push includes spending $55 million that St. Louis received as part of this settlement.
Olympics as a Catalyst
The push also includes a new Downtown St. Louis Sports and Entertainment Community Improvement District, approved in February, aimed at improving public safety, lighting, and pedestrian access ahead of the 2028 Olympic soccer matches. The state will provide $4.5 million annually for these efforts.
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“The impetus is to [improve] a large metropolitan area so businesses functioning there can see it’s a safe area to go to, it’s well lit, it’s walkable,” O’Loughlin said. Kitchens expects the initiatives to spur $1.5 to $2 billion in construction over the next 18 months. “The world stage is going to be here,” he added. “It’s like a dinner party, you need to get your house ready in advance.”
Private Sector Commitment
Another key provision of the bill targets the office vacancy crisis. It offers some of the strongest tax credits in the nation for converting old office buildings into residential spaces. To qualify, a building must be at least 25 years old, and more than half of its space must be converted. Mayor Spencer emphasized that the provision offering rebates for buildings over 750,000 square feet is particularly significant for St. Louis.
Ron Kitchens anticipates that four large downtown buildings will use these incentives to redevelop in the next five years.
