Community Renewal Good Stories - St. Louis/East St. Louis

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Dual-State EZ Launches Hotel Development With Facility Bonds

St. Louis, Missouri/East St. Louis, Illinois, EZ

Looking to strengthen its central business district, the city of St. Louis, Missouri, expanded its convention center in the 1990s. Without sufficient hotel capacity, however, the city was unable to attract top conventions. A 1999 Round II EZ designation of the two-state metropolitan area provided new options for St. Louis and resulted in the largest EZ bond transaction in the Nation.

The city wanted to increase the number of conventions from about 30 each year to 50 or more, and to increase the number of hotel room bookings by two-thirds to 500,000 nights annually. A proposed renovation of two historic buildings, the Lennox and Statler Hotels, and construction of one new tower would advance the city's goal by adding 1,071 rooms and 70,000 square feet of function space.

To help leverage $265 million in convention center hotel development, the EZ provided $95 million in tax-exempt bonds. Historic Restoration, Inc., the hotel developer, signed Texas-based Kimberly Clark as an equity partner and later brought in Solomon Smith Barney as the lead underwriter on the EZ bonds. Other major financial participants included the Missouri Department of Economic Development, the city of St. Louis, and local banks.

Marriott International will operate the hotels under its Renaissance Grand brand. Approximately 800 permanent full- and part time jobs will be created, with 35 percent filled by EZ residents. With additional EZ funding, Marriott will replicate its successful Career Advancement Training program for entry-level workers, targeting EZ residents. This training focuses on promotional opportunities and career development within the hospitality industry.

The project has served as a catalyst for development throughout the downtown. Other hotel operators have added an additional 1,500 hotel rooms to downtown St. Louis since the convention hotel construction began. The Renaissance Grand has proven to be an anchor for successful commercial and residential development efforts throughout the Washington Avenue Loft District.

For more information on this successful tax incentives transaction and the programs of the St. Louis/East St. Louis EZ, contact Executive Director Tara Buckner at (314) 241-2083.