Lipton’s vacant Clayton corner under contract
by Lisa R. Brown
The vacant former Schnucks property on the prime corner of Clayton and Hanley roads in Clayton is under contract to an out-of-town developer after sitting dormant for nearly five years.
Owner Lipton Realty Inc. has a deal to sell it to Cullinan Properties Ltd., a real estate development firm based in Peoria, Ill. Cullinan put the 3.3-acre site under contract within the past 30 days.
Cullinan is not new to the St. Louis market. The developer broke ground in November on a $385 million mixed-use project in St. Charles on the site of the former Noah's Ark restaurant at I-70 and Fifth Street. The first phase, which is expected to open in mid-2010, includes a movie theater, 65,000 square feet of retail space and 240 apartments. Later phases include plans for additional office, retail and residential space.
Cullinan is not disclosing its tenants for the Clayton site. Ryan Woods of the Clayton office of commercial real estate firm Lee & Associates also is a partner on the development group and is handling leasing for the project. Woods said the development could range between $70 million and $100 million. "The size and scope of the project is largely dependent on the users that we're talking to right now," Woods said. Woods said the uses that are being considered for the site include a hotel, office and retail. The development group is in the final stages of negotiations with an office tenant and a retail tenant totaling more than 100,000 square feet of space for the site, he said.
Donn Lipton, chairman of Lipton Realty, has owned the property for a quarter century. His family-owned Lipton Realty leased the property to Schnuck Markets Inc. until mid-2003, when the grocery store on the site closed.
Lipton's son, Randy Lipton, is handling the transaction for Lipton Realty and confirmed the property is under contract. The younger Lipton is president of The Lipton Group, a St. Louis-based real estate investment firm, an affiliated company.
"This corner has always demanded a mixed-use, dense development," Randy Lipton said. "We want to see it developed in a manner that will be an asset to the community."
Developers have eyed the site for years, but a proposal never moved forward. The asking price is $12.5 million, a price some developers, including THF Realty, said in past years was too high to develop the property.
The Clayton site is deemed a major entryway into the city of Clayton from I-64/Highway 40 via Hanley Road. The site also is located on the Clayton Road corridor, which links Clayton to the city of St. Louis and surrounding inner-ring suburbs.
"It's the front door to Clayton from the south and we're looking for a showcase for entering Clayton," said Clayton Mayor Linda Goldstein.
Goldstein said the property would be an ideal setting for a mix of retail, residential or commercial space. A variety of subsidies could be made available for a development that creates new jobs in Clayton.
"Our policy has been that we will consider (subsidies for) something that brings jobs to Clayton, but typically, we do not do incentives for residential because of the direct impact on the school district," Goldstein said. Cullinan has not yet submitted any plans for review or requests for subsidies.
The deal is good news for Clayton, which has seen its share of development setbacks in recent weeks, in part due to the slumping economy. In November, Brown Shoe Co. pulled back on its plans to build a new headquarters in a $568 million development on the site of its existing operations in the 8000 block of Maryland Ave. Earlier this month, St. Louis County officials delayed issuing a request for proposals for a new office tower to be co-developed with Sikeston-based Montgomery Bank, which owns a portion of a two acre-site at Forsyth and Central in the heart of Clayton's Central Business District. The county and Montgomery Bank are still trying to sign tenants for the development and will issue a request for proposals based on market demand, according to Denny Coleman, executive director of the St. Louis County Economic Council.