18 Feb Ep. 63 Amrit and Amy Gill of Restoration St. Louis

TRANSCRIPTION

Hey this is Adam Kruse owner broker of the Hermann London real estate group and host of the St. Louis REALTOR® podcast and this is Shannon St. Pierre a realtor at Hermann London and co-host of the St. Louis REALTOR® podcasts before we begin we just want to say that we are a realtors which is different from someone who is simply an agent the term realtor identifies a real estate professional who is a member of the National Association of REALTORS® and subscribes to its strict code of ethics and even though it’s called the St. Louis REALTOR® podcast this show is for everyone who’s interested in real estate buyers sellers REALTORS® HGTV Watchers everyone so if this specific episode isn’t exactly what you’re looking for go through our past episodes and I guarantee you’ll find a topic that interests you if there’s a topic you want us to cover email us at podcast@HermannLondon.com that’s Hermann H E R M A N N London dot com and we’ll talk about it on an upcoming episode thanks for listening and enjoy LIVE from the rooftop of the Hermann London real estate group in beautiful downtown Maplewood it’s the St. Louis REALTOR® podcast with Adam Kruse and Shannon St. Pierre welcome everybody to the St. Louis REALTOR® podcast I’m your host Adam Kruse here with my co-host Shannon St. Pierre we are super excited today because we have Amy and Amrit Gill in here famous local developers with major major projects under their belt a lot of them in the grove and all around St. Louis and beyond one of their latest projects that you’ve probably heard of as hotel St. Louis you guys are awesome you’re everywhere I was looking on your website and I kind of noticed that your why is to improve neighborhoods and it seems like your passion is kind of doing that through restoration but as we’ve been chatting here I’ve been more impressed about how you talk a lot about your why and your core purpose I’m reading a book now called start with Why by Simon Sinek and it’s like all the successful businesses focus on their why and that’s what you’ve been doing even in this meeting with us and it seems like that’s what drives your business yes and it’s very important to to make sure that everyone within your company also understands the why absolutely just just the two of us knowing the why isn’t enough so as we’re starting here do you mind sharing it with us again sure so the our mission is to strengthen and enhance the communities that we operate in by redeveloping neglected neighborhoods and making them great places to live work and play pretty simple but endless because no matter how much is strengthen and enhance the community you operate in there’s always more that you can do to strengthen it or to enhance it some more right and so we’ve been chatting a little bit here today and it sounds like your business started way before this but I remember seeing your are the Eagles yes double-headed Eagles I remember seeing your Eagles spray-painted on buildings in the grove it’s literally been 14 years of that back that I can so tell me why the Eagles how did you choose the Grove okay can you kind of go sure so the first neighborhood involved in was the loop oh you were not yes Oh 80s and early 90s is that pre Joe with Joe with Joe but really more with some of other friends Dennis Lutsky and Danny okay so but from there we worked in Skinker Debaliviere uh-huh we renovated almost 85 buildings and Skinker DeBaliviere and then from there we migrated to the Slough area the stretch of Lindell that was then abandoned with the big Coronado building the Coronado was the most significant but I mean both the Lindell towers were rundown they weren’t vacant but they were really run down and then mula was real I would say not a parking lot behind there there was actually a hotel there really weird the Shriners built it yeah there was there was a lot of it was just it was knocked open like it was urban blight exactly and so a neglected neighborhood yeah just like I said to him I can’t make you however many million of dollar loan for the Coronado because nobody believes that you’re legitimate right you don’t have a logo you don’t have a company name right and working out of a truck and we had a na contracting that’s we called ourselves right you know we were just you know we’re gonna said you want to logo I’ll get you a logo and I looked around the Coronado Lobby and that was the two-headed Eagle economy to pay for God it somehow to make look like a logo and sure called it restoration St. Louis and there we are lovely we want a logo I’ll give you a logo here you go 2001 okay Wow and then how did you choose to grow grow was was a project that I envisioned as a defensive project originally but the more Amy and I talked about it the more we realized we had an opportunity here to basically experiment with how far as a neighborhood gone before it’s so far gone that you can’t bring it back to life mm-hmm and the and the Grove had 38 percent of the of the structures in the Grove that was remaining remember there were a lot of empty lots to write but 38 percent of the remaining structures out of the 816 that were in the Grove at the time were vacant more than half of those was so derelict that they really should have been torn down years prior to that right we saved a lot of them we save structures were all we had was the front wall and sometimes maybe a side wall but the roof was in the basement and the back had collapsed and the sided collapsed and we still saved them because we wanted to keep as much of the historic look on Manchester as possible that’s where your passion comes in right the the the why is to improve the neighborhoods and the passion is kind of doing that through restoration instead of just rebuilding it would have been so much easier to tear it down and rebuild right then so not just that the history building buildings are I mean as Daniel Burnham put it or you know they’re single and unrepeatable just like a human being especially in the city of St. Louis I mean we have these amazing structures and I think that it that St. Louis in the structures don’t get the attention that they deserve but I mean if you go to another city they don’t have this kind of beauty so in 2005 we mounted our 2003 I think it was we mounted a pretty aggressive almost frenetic effort to try and save the old Harris Teachers College on Theresa we call it the Theresa school okay and it was gonna be torn down to make a parking lot for a Walgreens and if you think about a school like that it was its first William Vietnam design school and it’s in potentially right next door right now to the collegiate school which is the old style school and if you look the two schools sit side-by-side now ours now is lost but if you look at the two schools side-by-side the the old school that St. Louis kept has little tiny windows and narrow narrow hallways that it’s very cool has 30-foot wide hallways it was a place where the students congregated with these really big windows and all this light in the classroom which the old-style schools didn’t have they were like prisons and so it can revolutionize school design the whole current world for the warming we’re gonna tear down just no consideration for the for the number of stories that you’d be silencing its time from the fact that that was the first act it was the white Teachers College and teachers like then like now we’re liberal and they were the first integrated black and white teachers college and it was Harris-Stowe Teachers College and that was that first school and now then it became harris-stowe and then it moved to the University and became the official Harris-Stowe school but it started there right so it has a lot of history about St. Louis though is a historical black college it’s one of the people though was the was the historically black Teachers College and Harris was the white T 20 colleges I’m engaged I think and there is Stowe in what is now our Teresa so and so that all those stories would be silenced because somebody thought it would make a better parking lot then keep it keep the building sure and the schools in particular are repositories of the stories of our people and to lose those I feel is very detrimental for a community so tied right into our mission and we fought a pretty good battle there then you won we won I think it’s amazing but we were incredibly lucky because Jim Komen actually had a contract on the building and he stepped away and he’s Danny walked away once he heard like kind of everything that we had to say Bob Duffy worked for the post back then and he wrote a big article about why it was so important to save this school and Jim coming actually was very kind and he walked away from the contract which was you know I don’t know that this school does it allow dude it was an enforceable real estate contract right and the school and I mean public border public education or whatever it was at the time that had control of it said okay well now you’ve caused the contract to be withdrawn so by it yeah because the block had a lot of drug issues and SLUs at the time a way to do that because there it’s Park Avenue and then Vista and then the college has there med campus was between Compton and grand SLUs remedy for that was just to buy up everything that became available and tear it down and we have a say I was a director oh right so we started buying up everything that you know all the drug houses and everything that became vacant we would buy it and Rehab it now Slough is paying developers to come in and and build stuff on those very Lots with a tour down pretty viable buildings back in the day well okay which I mean you know more power to Slough that they were talking about it should still be a neighborhood yeah and you talk to you guys talked about bandwidth and stuff like that maybe that’s all they had the bandwidth to do at that time I guess right all right so you said okay we’re gonna do the growth and kind of tell us again the world was kind of started out as a defensive project what is it I mean what do you mean by defensive because I sensed that it wasn’t sustainable way property was appreciating everybody was a depreciating lee they had to be a recession coming was my feeling I call it in this was 2000 five I called it a little too early and it turned out because things didn’t really tank till 2007 but we started the project we started gathering property in 2004 and in August of 2005 the post-dispatch one of the post-dispatch reporters kind of sniffed it out so we got ahead of it and went ahead and told him what we were doing nothing at the time we owned about 47 buildings in the grove of 57 buildings in the grove was something like that so we hadn’t quite reached a 10% mark that we wanted to hit and the minute of course he broke the news prices jumped and made it harder for us to because the speculators of course all immediately jump in and buy buildings to speculate on and that that’s that’s something we’ve kind of dealt with for the last 20 years even in Davenport once they found out the gills are coming property values jump and all the speculators come in and grab property and then that’s really have that kind of power we use a lot of shellfish are corporations to buy property and in community and there are two come with like who follow us in the neighborhoods I mean very good developed Solex Austin at Grove properties was dating a girl that worked for me and came over to our office and said hey I want to advise or should I invest and I said hey you know we’re working in the grill he couldn’t have been 25 right young guy any advice you know he’s buying his first house he was like all right so he’s done tons of stuff in the grove like he’s done fabulously well because you know he was like okay I’ll go where you go right look um there are several real estate developers who kind of just they’ll call us and say okay where are you going next great which just goes along with your mission cuz your mission doesn’t say anything about profits it’s all about making the neighborhoods better so if you can go somewhere and other people help you essentially with your mission it’s that good as long as they’re doing it so we do not buy occupied properties will only buy an occupied property if it’s a nuisance property and there’s a drug dealer who lives there or you know other people who break the law like one building we bought was it well there was a prostitution ring that was being run out of there so we we buy vacant property 99% of the time so and then how do you find the properties are you just going up and down and you look going to tax sales are you just driving the neighborhood so well everything everything all the when you focus on an area like that I guess it makes it easier because you know every building you can almost learned every little doors we literally map out the entire neighborhood block by block who owns which property and condition each single property is in is there any signs that any investment is occurring in that property because if the person is investing in the property oh we have no interest we want to help them because they are doing what we’re doing which is strengthening and enhancing that community but if there’s a vacant property and the owner isn’t spending any any money to even you know make an effort to redevelop the property make it habitable again that’s a prime target that’s who we want remember we’re trying to buy the worst ten percent right and then are you reaching out to the owners directly to the owners okay and sometimes we’ll overpay for a property if it’s significant enough like do you know the property the sauce and beside is in now yes so we weigh over good investment thank you I mean they’re great they’re fantastic they’re me I so so we way overpaid for the property knowing a building knowing that it had catastrophic structural failure all the steel was soft as butter only thing holding that entire building up was inertia we had to take that building down brick by brick like a Lego set put a new steel starting with the curbs at the sidewalk and above the storefronts that’s all brand-new steel and then put the brick back like a Lego set again brick by brick number feel soft I press it just completely glad you could poke a finger you could put your hand through it in a lot of places it was our engineer went in there once he goes I’m never going in there again I just want you to know that like it’s surprising that this building isn’t sitting in the middle of the street because it should just call part of it was part of it did well part of it did the corner did collapse before we know so your goal was to buy the bottom 10% we told us your goal is the worst 10% in the grove and then you were gonna make it the best 10% and it worked and it worked and that was the started the branch in the neighborhood were around 50 cents a square foot okay and so we come in and we’re redeveloping properties and we’re spending $200 a square foot and putting in real hardwood floors real granite card key access cameras for security because security is very important bet Marvin windows on the front of the buildings you know really nice quicker windows on the rest of the building high-end finishes with great appliances etc and the rent was 50 cents a square foot so I we were writing a check every month to cover the deficit rents today are close to $2 a square foot Wow anybody here well no so again we couldn’t have done it without the state historic tax rate program which was amazing at the time it’s a broken program today but back then it was an amazing program that worked for a project like this the federal historic tax rate program which again is slightly broken today because of the 20% per year as opposed to 100% of you know of the credits in the year that you actually place in service and then city of St. Louis incentives which were very simple back then I mean they all we used was tax abatement ten years of tax abatement the tax abatement ran out on most of these properties a long time ago appraised values on the city of St. Louis website for the Grove that you know now roughly 900 bill that we’re talking about have risen by over 800 million dollars well so me think about it the city did not invest anything in this because most he’s probably all is there a handout some tax abatement that’s it and they they weren’t getting any money I mean five hundred dollars that we’re still getting five hundred dollars for that ten years but now property taxes have risen over eight hundred million dollars not property to value but if you think about and therefore property test yeah seventeen so you started in 2004 2005 and then you took the ten percent how long did it take you to kind of really redevelop that time that ten percent so the recession intervened yeah I had banks especially and we work a lot with community banks yeah tend to share some of the same philosophies about community mm-hmm that’s what they’re community banks but we worked a lot with those kind of community banks and some of them were failing during the recession and we had construction loans and with a couple of them you know they hadn’t paid the drawers you know construction drawers for three months of four months and we’ve racked up two or three million dollars in construction costs and then they called us and said you know what we don’t have any money we can’t fund these drawers so you’ve got all these people that we have all these people that need to be paid the loans have been basically withdrawn mm-hmm and so we went to all the people that we owed money to and explained I just told him what this what happened here’s what’s happened and I’m gonna pay you back luckily we had very successful properties like the Coronado and so forth that were cash flowing really really well and I said I’m gonna pay you back but it’s gonna take me a little while and 95% of them said you know what we’ll work with you mom we know you’re good for the money and yeah they were five percent that went and put liens on the property or whatever we don’t do business with people never did again but with a lot of our regular supplies we still have wonderful relationships with and we still do business with them well you will be in every one of them bags every single dime the only people who didn’t get paid back a hundred percent of what they were owed were the ones who went out and put liens on the property there since they wanted to be combative about it I left my attorneys work our deals with them which were typically 70 80 60 70 % of what was owed and we wrote him the check it’s interesting yeah but the recession was really hard on real estate developers I don’t think people I think most regular people believe that you know real estate developers who had properties that were taken by banks were people that were not paying their loans but we had cash flowing properties that we were paying the note on where the bank said well now it’s appraised for like 2 million more 3 million more I mean less and so you either have to give me that three million dollars or we’re gonna take your property but there was there was a lot of mark-to-market that that the banks were scrambling to try and meet where the regulator’s was saying you have to mark this property to market value every year so without our knowledge they were going out and getting an appraisal appraisers had been beat up big-time for having inflated values because value that risen so sharply in the years preceding that a that regulators were saying those values weren’t real the appraisers you guys are culpable as well so appraisals were being very conservative and so those values were dropping really fast so even on let’s say alone that we’d had for three years we still have two years left to run the five year term right we’ve always paid on time the property’s cash flowing beautifully no distress no sign of the prosper and then they the appraiser bank would get a secret appraisal basically because we would hear nothing about it then the bank would show up with an appraisal that said hey that property’s less than half the value it was when when we made the loan then you need to bring us back in balance back to 80 percent or 75 percent loan to value so you need to write us a check for X what was their goal they wanted to foreclose on these properties like yeah well why in some cases but in a lot of the banks in town that decided that a lot of our properties were pretty bad attractive and valuable and they could get all of them cuz we don’t sit around on millions and millions of dollars right and and they were trying to get their hands on him it was it was a very interesting time and I think a lot of people don’t don’t understand what happened to a lot of real estate people that they think that it was something that real estate people did to themselves but a lot of the banks where it was done to them and by the banks and happened with those dude were you able to keep him oh yeah we did not we did not default on a single loan but how did you did you have to come to the table with you know X amount yes Lord you get the money for that well luckily we had built wonderful relationships with other financial institutions we had banks that came to the rescue and took out the PNC’s of the world you know should never set a name but there it is and we were able to pay him off and fall and stay in business we did there was only times in our careers where we weren’t growing we were actually shrinking we laid off a grand total of 78 people in the construction side of the business at the time and hired back about 10 Oh from immediately into the property management side and mainly Bosnians that we had been with us for a long time I remember a lot of this happening and I kind of consider myself to be what I’m calling a child of the recession where now I’m I like I only do buying holds because I’m so afraid of the development side because of all the people that I met who lost it all you know like you guys sounds like you could have done and I’ve been like afraid of it and that’s sort of held me back this being a in real estate during that time versus people I know that it get into real estate now and they’re like things right yes amazing you know they don’t know how bad it can get now quickly because it all happened in the blink of an eye mm-hmm we went from just I mean basically the conditions are very similar right and out of the way they were in 2006 then you think about it right everything was going really well unemployment was very low we had different challenges I felt like it wasn’t sustainable and the Grove was actually in response to my feeling that wasn’t sustainable and we needed a defensive project and the whole talk was that we’re gonna do 80 buildings well it’s technically 80 small projects mm-hmm and so I exposures a lot less than it would be on a Coronado 300 thousand square-foot single major twenty-eight million dollar development right and really that was true as well the mistake we made was and preparing for what we thought was a big recession that was coming we paid down a lot of debt we made up we did bounce sheet management and made a balance sheet look really really strong but in the process we got rid of a lot of cash because we were paying down debt whereas we should have really held on to the cash and kept the debt and not done all that balance sheet management that we did always 20/20 I thought a real estate recession was coming not a financial recession it so was a gun wrong in the end what is that done for your approach now or how you guys kind of handle things like that oh we’re we’re handling things back we were planning for a very different company today we never had any non-recourse debt we never went to Fannie Mae because we we just figured you know we’ll we never we had to wait long anyway so what do we be non recourse for because we’re never gonna walk away from anything we’re always gonna pay back every cent we borrow well now we do a lot of non recourse because the non recourse people really kind of come at after you in a recession mm-hm and so that makes us much stronger company and they become your team right there helping you during the recession right in the whatever they want you to be okay you know whereas these some of the banks they don’t care if you’re okay or not and then some of them I mean I have to say you know like Pulaski which is now Busey and Great Southern and you know there were so many bankers who bacons Bank and Trust they came to our rescue they were like oh yeah we know you we know you’re good you know like the Eagle Bank they were one of our close you know very strong it pays to have relationships right oh yeah thank you so many ways I knew that we weren’t like it’s not we’re not high rollers you know we’re like regular and as I always say like regular working people like well are trying to make a difference when we started our company and this goes back probably to a socialist it’s a little bit but we decided that we would never pay ourselves more than eight times the lowest paid employee so today we have employees who have paid more than us because we’re now the last couple of years have been really nice because a lowest paid lowest paid employee pay rate has actually gone up pretty dramatically uh so we can give ourselves pay raises – I love but since if you read about all these CEOs getting paid you know million times what the lowest paid employee is getting paid or whatever and it’s like it makes absolutely no sense but again it’s probably part of our socialist roots that we started the company with you know when you when you had all these properties you rehabbed 80 properties in the grove to start for example something like 80 are you selling them are you flipping them are you keeping them as reno’s we’ve sold a number of um one-off – owner operators people like ruyan with’s and the guys who were who were operating sanctuary are back in the day grandma fossil stone yeah so so they were operating the commercial we sold them the whole building including the residential that is in the okay so the apartments Asit about on the second and so that they would have a deeper investment in the neighborhood and that we hoped would lead to a much stronger commercial strip mm-hmm I believe we are actually right now currently taking a small package to market just probably sixty units or so but we’re replacing it almost immediately with sixty new units that we’re putting in in the new building across from urban chestnut and then we also have another planning stages for that one block of arc oh yeah the 4200 block of our code mm-hmm right where it kind of goes off an angle from Manchester that’ll be a mixed-use project okay hospitality as well as residential probably around 65 or 70 units and about 80 room hotel I found it so interesting I was looking through your social media looking through your website I was I was kind of preparing for today and you know I saw a lot of the huge projects that you guys are doing that I hope we can talk about but I the one of the things I thought was really interesting was that you’re still doing you know houses right or like there’s a couple on Swann I think that you’re doing that is incorrect you know from Hotel Saint Louis that your next phone call could be like we need a new water heater over here at this one house we have a wonderful team though there’s been with us for 20-25 years that runs that maintenance division for us and the building a building division so you have so tell us kind of about the makeup of the company if you don’t mind you have shares of the CEO and the chair the president right your this so we have a restoration St. Louis which is the development company okay we have checked made design which is where the architects and interior designers work and that’s that’s our design company the to restoration and hires to design right and I compare one tiny typically they really don’t do work for anyone else I really just work for restorations okay under that we have a net contracting and that’s where the people who swing the hammers and that’s where they got it that’s where they are and then we have front door which is a property management company okay okay we have innkeeper hospitality services which is our hospitality management company hotels we manage our own restaurants in it and each one of those companies do they all have their own sort of presidents and they know they each one of them well check mid design does because Amy is because I’ve run all the design and architecture I’m very particular and very and I had to have something where he couldn’t like pee in my pool okay well you guys are married and you know yeah yeah so 30 years so but we have executive staff but we own it all so we’re always the president or I’m the president so we have you brought investors and aside from you know federal tax credit investors just to monetize the federal credits or something but in terms of equity investors it’s just Amy and I because how do you ask someone to come in and make an equity investment given our mission and the fact that we may act like a not-for-profit right for years women never make a profit for five years before the tide turns and we start to make a profit in a particular neighborhood because that’s our mission so we’re more focused on the mission and would be very hard to have a fiduciary duty to a to a equity investor that says hey we’re gonna maximize your profit the two missions are not compatible okay so that’s why we’ve never take a necklace but what about on the commercial side how do you create the funding for those large developments like hotels St. Louis it’s our money it’s fill your mind like the checks okay we go over budget there’s no other says why did you ever spend that’s my job I’m the wife I just love to know like about kind of that sort of organizational structure about you know who who can call you and it’s like the chef doesn’t call you and say we’re out of lettuce right they all have yeah they cost more ideas they’ll call us for I mean if you have an frustrated chef so yeah trust me I’ve gone and given my chef’s cooking classes and I don’t know if they’re laughing but very often they do end up learning you have me just as I learned from them I saw you know I you know I was looking on your social media and I saw where you were like making breakfast or something for a bunch of your chefs that came in and yeah that’s kind of a part of your culture too I guess and yes it’s nice for them to be able to hear from you and I’m sure instilling the vision and the why and all that stuff into them but you know if you have a problem I’ll give you a funny example so several years ago we we did the Holiday Inn so Bank banker turnabout is fair play right so they rescued us and then they had a problem and they needed to sell this property the Holiday Inn at Lindbergh and 44 oh yes yeah we’re still doing it um and there was it was failing there was no money that we’re not gonna loan anybody any money it was it was a Madison we took over as the receiver of that property initially to help the bank let me back the bed no the receiver is like the bankruptcy at North straighter a court-appointed receiver and then the bank begged us to to buy the property they needed it off the books and so so we ended up buying and renovating that property and you as twist is a twisted twisted tree resin that’s the Syberg’s they’re awesome good and if you haven’t eaten there you really should you know um anyways just good to walk into restaurants all over town go though lunch here thank you very much now they still we self to pay that’s another rule that we have we pay even in our own restaurant want anybody thinking that you know like we’re not paying that’s not right so so here’s the funny thing so we had an issue where the housekeeping staff wasn’t working out and we had to terminate several people we didn’t have enough people in housekeeping so I said I know how to do laundry I’ll go downstairs and do laundry so I’m downstairs doing laundry and I’m folding sheets right and at the Holiday Inn Holiday and I’m folding sheets right and it’s 5 o’clock and there’s a shift change and this elderly gentleman who worked for us came in and I didn’t know him dad hired him like a couple of weeks before and he sees me and we start chatting and we’re folding sheets right and we’re talking we’re pulling laundry out of the washing machine and we’re folding and you know and finally he says he goes well so what do you do here right he goes he goes I’m not you know like are you like the salesperson do you get a day today cuz you weren’t in the uniform I guess right I was just in jeans and a t-shirt because it’s hot down there you know it’s hot in the laundry room even in the winter and so anyway and the GM had walked in and she looks at him and she goes well she owns the place and he almost had a heart attack like he looks at me his eyes get like 5 feet around and he goes you on this hotel and I said yeah and he goes lady I’ve been working in hotels for 30 years in laundry rooms and he said I have never once in 30 years met or seen an owner of the hotels I’ve worked in and I said Wow you know I said don’t call me lady you’re fired I said I’m ami right and he just couldn’t get over it it’s awesome to this day still works for us to this day every time I see him he’s like Amy how are you that’s a no-no and we just talked and um but it’s funny to me because there’s not a job in these places we’ve done every clean up you can toilets and changes needed to help the housekeeper’s if I’m in Devon or whatever of course I do more audits now than I do actual cleaning but you know I mean we still we still well we’ve done every single job secret to success in some businesses where the owners get in and are willing to do any job and that makes the employees feel more valued though you’re willing to do it you’re not asking it was part of the culture of a place right right so given our core values of passion sizzle and melody and perseverance right humility means none of us is too good is above good to do anything if the best if the best thing I can do at any given moment is to just pick up trash then that’s what I’ll do because if that’s the best way I can further the goals of my company at that particular moment then fine I’ll do that woohoo and and that’s what’s wonderful about this country too I mean I don’t think as Americans we really realize that the dignity of Labor is not something you find everywhere around the world I could not do this in India for example why because so my father’s retired lieutenant general he was like the Colin Powell of of India the Statesmen household name war hero you know all those things right mm-hmm my mother if she if she had seen some of the things I did when I came here and what I do for a living she’d have a heart attack because it’s considered beneath you to do those things to pick up you have people who do that okay and in a lot of cultures that’s the way it is what is unique about this country is the dignity of Labor you can do anything and it doesn’t demean you it doesn’t make you less than anyone else it’s true I came to this country I washed windows on Del Mar I cleaned houses I cleaned a mother’s house it was great money that’s so interest you know I’m cute I’ve heard stories before of people that have come to our we’re totally off topic but I you know it’s interesting I’ve heard stories of people that have come to the country to work at MasterCard or whatever get some of these jobs but they don’t know how to do our guest during may be not willing to do the things like you’re saying are kind of beneath them right but so they’re now they’re showing up to work with dirty clothes on because they don’t they don’t know how or they don’t want it’s beneath them to do laundry but they don’t realize yeah but it’s also beneath me to show up to work and dirty clothes I know it’s kind of an interesting thing that happens when you switch clothes like that I guess and it’s funny and it’s I’ll cook yeah cooking is considered beneath you you have a cook that shows up and does the cooking really and you know what they go out I think the fun thing about the two of us is we both done a lot of this work right we’ve both swung a hammer we’ve both I was a carpenter for years I mean I I framed up walls and I taught a lot of the guys who work for me today they still laugh about the fact of the best trainer they ever had was me yeah so what are your core values again passion humility and perseverance first of you never give up okay because you never gave up humility kind of has a few different meanings right and so you said that it means that you guys don’t talk about it yourselves a lot that’s that’s the way we that’s just one of the one of the ways that we stayed humble was a lot of other people took credit for a lot of the work we did but also humility in terms of that you’re willing to do things that anything needs to be done right and passion just you just can’t help that one I guess your honor but if you don’t have passion for what you do you should go out and find what you’re passionate and go get that job because ultimately you can’t make a difference in the world we live in unless you have true passion so how’d you get started in the redevelopment and development residential commercial oh wow we’re gonna go back department and the loop in the loop and we had an amazing landlord Dennis Lutsky loved him still landlord nice little sack and he the building that I had lived in the previous year went up for sale in foreclosure in 1990 and June 6th of 1990 we knew the building because we had lived in it so we knew what it was like and so we went to him and we said well you know like what do you think should we should we try to buy that building and Danny was great and he said yeah you you kids can do that you can do this you know you’ll you’ll be great we’re I think where we 27 years ago 24 right yeah so we asked him how you do it and he said well it’s in a foreclosure sale so you called this lady at Bank of America – she had it Kim not can really not never forget her name and anyway so we called her and she was really nice and she said ok so we’re the bank’s opening bid it’s gonna be fifty thousand dollars and so you need to if but you have to have the cash how big was the building but it was a three family apartment building in the loop a big one though it was the ninth I’ve three three family um and so we call my grandma we need $50,000 and we borrow $50,000 for like four months my grandmother loaned us $50,000 at 12% interest yes she was she was a loan sharks really I you know we were like okay so so we had this $50,000 that we borrowed from my grandma and we went to the to the courthouse Dennis went with us and stood around and there were all these old at the time you said he was basically old Jewish landlords right and they were all standing around and little like new people coming in well but he went to each one each one of them and said this property it’s off-limits it’s theirs he said we’re giving these kids a chance we’re gonna give these kids a chance everybody right Wow so a lot of people have helped us over the years you know we like stood there right and so it shared a diary blah blah this piece of property and she goes the bank bids fifty thousand dollars psycho okay what do we do do we bid like fifty one and she goes no no no no fifty thousand and one dollars and we were like okay so we go fifty thousand and one dollars and she was like does anybody else bid and she goes sold out story not even know any of them right oh you didn’t know any of them and still don’t know any of them and but it was just like the nice thing that he was like okay we’re gonna give these kids a chance right and so that was our first building so I’m working on it ninth of weekends we both we both had jobs back then one night we decided to do vinyl floors and we put all the vinyl on the kaabah glued down on the kitchen floor we realize that’s painted with all the Nek and the vinyl for old vinyl floors is so sticky that he made like two steps and then he couldn’t move me ended up ripping his shoes like this all of his shoes the floor and the tops and well so we had to get it off with the roofing spay the next day like that was the only way we could get it out of there was unbelievable I never learned we yeah building I don’t own it anymore I sold it back in 2015 or something like that but four or five years ago but I renovated that building four times well because I learned a little bit each time and went oh wow we did a terrible job all right guys we’re getting it again it’s how I taught a lot of the Bosnians and you know the guy who was the chief operating officer of my construction company 25 years but he’s from Belarus so we have a lot of immigrants that there are lots of things that can cover up but but it was it was there funny and to give a little shout out so you know we started over there we did 30 buildings in the loop yeah and there were guys like Dennis let’s get Mike Geiger who Danny wall Danny wall deformed a lot of our opinions on how to create a neighborhood because these guys really wanted thought to be neighborhood so they funded this Park View Gardens association and the way these guys did the they so the gardens association was to provide summer camps for kids that lived in the neighborhood so three so alone in the neighborhood they did beautification they did flowers they had a guy who cleaned up they did alley lighting so they would pay to put alley lights up on that just that they they would provide free lights to landlords if they’ll just put them up at the porch lights rear so that because the whole talk was that a well MIT neighborhood has less crime sure these guys they’re the ones who brought the the loop back to life originally unsung heroes people take credit for it and and Joe who’s a neighbor of mine and he did a lot as well I mean he gets most of the credit but there were a lot of other people who did a lot of work but to tell you guys were all guys who worked out of their basements and every Friday night as long as I can remember we had to volunteer everybody’s bought you had to volunteer twice a month and go to this bingo hall at the VFW hall down on Ashley yeah and work the bingo and that was our how we made money that’s holy basil honey there’s before illegal gambling came in to Missouri yeah on a nice night we would make seven or eight thousand dollar profit right what there’d be three or four hundred blooming in there mostly women playing bingo smokin like a chimney yeah I think if I died of lung cancer as bad and I I would have to do the bingo like the little thing cell pull-tabs because I was pretty cute back then things the money out from under their bra cute and it was just so funny and they are serious about their bingo yeah but input that’s how these guys raise money for the neighborhood so when we started developing neighborhood like planning ideas and we have a lot of them instead of bingo we thought CID what’s the purpose of the CID the same stuff that they were doing animation alley lighting security you know helping kids have something to do in the summer so they’re not I mean we have to clean up it’s all the same it’s the same like theories when when the loop started really developing this is an interesting story the loop started really developing all of a sudden we started getting the bad apples on the east side of the loop pawnshops payday loan places all these places liquor stores all of a sudden that on the other side of skincare started with really getting Dara really started going downhill on the city side because they didn’t have as many customers well they wanted to be in a transitional neighborhood where there was enough wealth that they could make money off people but not you know like in West County I guess where people didn’t need them right and a transitional neighborhood is what those stores look for in their Walters they literally feed off poor relatively poor people check cashing places the interest rate I don’t know if you knew this but the interest rate per day is like 10 percent or something like that I think that’s on the low end but yeah okay but it’s really businesses I don’t get so a lot of our philosophies they have been shaped by that so for example we have a loan program within our company so if you have a hardship and you’re an employee we give you an interest-free loan you can stay in your home or buy that car so you can get to work and we have a whole peer and manager review process so that people who have true hardship are the ones getting the loans but we’re trying to get people off the payday loan stuff right that’s why we do it so we can’t say anything and give them debit cards so if there is some because people don’t real don’t think anybody realizes in the real estate business how hard it is for people for example you know if you have bad credit you can’t get a checking account well if you can’t get a checking account then you’re spending all your money on money orders pay your bills and on payday loan places to cash your checks right versus people like guys and that’s we worked with the Pulaski bank at the time to create this program where they would bring their paychecks into Pulaski and Pulaski would give them a debit card that could not be overdrawn love it that’s it so it lost some $0 to basically cash their check and then we turn they go – Schnucks and pay their utilities and pay off you know with that debit out all the big fees without any fees right and then we started a thing where they they we’d get him an account but they couldn’t over draw the account it was just exactly how much their paycheck went went directly into their account and then they could learn how to do online banking and paying their bills online because even if you go to Schnucks, Schnucks charges you with fee right so then we did online banking where they weren’t charged a fee so then all of a sudden you know five dollars to you doesn’t seem like a lot of money if you’re making $10 an hour right it’s a half an hour of your life that you that you spent working right yeah just give them out so I know this is Charley off topic but it it wasn’t interesting but back to the real estate thing so what happened in the loop was we got with Lyda Krewson and we said okay this loop is getting really bad she was the alderman of the 20 okay she was it was Dan Maguire damn is an idea it was Dan and I’m put it in and that’s why we hired him for a growth to write police the beauty of husband and wife pressing trust me in this but anyway so we did this thing called a special business district where we said okay there’s not gonna be any we’re gonna say no to all these predatory businesses in advance mmm-hmm so that when we go into a neighborhood like The Grove we have an SBD in the grove and it says you can’t have a you can have a check cashing place you can have a payday loan place you can’t have a pawn shop you can’t have a liquor store you can’t have a drive-up drive-through right did you know that you can’t have that in the grove without special permission we just buy through retro anything without getting a variance so which means that your neighborhood can weigh in and say you know what this business is a it’s a worthy business we’re gonna give them a variance but at least the community has a chance to weigh in yeah on what they want interesting that was the whole point of the special use ordinance yeah so no you know if you’re there and you’re operating your grandfather but if you move and someone else wants to come in and operate the same non-conforming business well now you need a variance the neighborhood has a chance to weigh in and the Neighborhood Development Committee has a chance to you know allow public comment you can decide as a community whether it’s a good idea or not that’s the whole point is not to just stop you from doing something it’s just to make it so that it’s a very transparent process that you have to follow so they just issue you a apartment and you do it whether the community wants you there or not so it gives them both a voice it gives a voice to the so like for example our thing says no tattoo parlors but there’s two of them now in the Grove right thinking has changed about it wasn’t mainstream before it’s a lot more mainstream today but they had to get a variance because it was in the special use ordinance that’s not allow the community said yes there you go you have them let’s see we have so you guys are so interesting where’s Mike can we extend this podcast a couple of hours podcast is it’s you know we came into it with that real estate aspect but it’s anything but really really rebuilding and you know everything that’s involved in that so here the employees and making them a better part of the community and correct correct it has going back to the why if that dishwasher who’s working at Hotel Saint Louis doesn’t understand what our mission is then we’re less likely to succeed in our mission it has to go all the way down love it that’s exactly what Simon sénèque would say to probably yeah so as a new Gill fanboy over here that’s what I’m using the term wrap what would you guys say is and you said you get calls about this a lot what’s kind of an area that’s what’s the next area so we avoided downtown St. Louis for 25 years we felt there were lots number one we felt it was very politicized and we’re not political animals we don’t do politics well just speaking now we do basically we’re just not we’re not politically and that’s a big way to take on to downtown so we had avoided it because there are lots of people who are working there and we felt like they were doing fine within 25 years we renovated over 400 buildings in the city of St. Louis mm-hmm we brought back by my calculation somewhere close to 4,000 residents back into the city into abandoned buildings that we renovated okay and during that time the city of St. Louis lost 150,000 people in population so obviously he you know we kind of felt like the little Dutch kid in the fable with his younger and the older like yeah so it wasn’t working and the more we thought about it the more we realized how important downtown is not just for the economic of the region but also for the psyche of a community like St. Louis I think part of the reason that St. Louisans are so down on on St. Louis is because the decline of Downtown and so we needed to give St. Louis something to feel better about themselves about the region and about downtown and so taking the only privately owned a Louis Sullivan building in the world buying it we took a leap of faith and paid cash for it and bought it right and then renovating it into an autograph collection hotel which Kansas City is – our graph collection hotels we had none zero and the tagline for autograph collection is exactly like nothing else and it’s a wonderful wonderful experience brand is an experiential the iSeries collection that they’re truly unique correct and both Amy and I sit on the advisory board mm-hmm so so we gave downtown St. Louis that but my feeling is it that’s not enough obviously we’re gonna be redeveloping the chemical god-willing the creek don’t the chemical building next door we’ll be expanding the hotel in there are you just expanding the spa an indoor pool an apartment par-72 apartments 91 hotel rooms another rooftop restaurant and bar outdoor another ballroom another outdoor event space etc but the if community is thrived in the shape of a donut then we design every new community as a donut with big dead hole in the middle but that’s not how we design thriving or redesign communities period we design them with a vibrant beating heart at the center of it all the the towns that are doing the best the Midwestern towns the towns in the US that are doing really really well the regions that are doing really really well and becoming more relevant regionally named Nashville Indianapolis Omaha Omaha they have a thriving beating heart at the center of their community downtown downtown we don’t they do so we decided to go downtown and we’re gonna continue to develop there and we’re gonna continue to help the developers that are there the owners that are there and hopefully someday in my lifetime we’ll see downtown as the thriving you know vibrant beating heart of a very vibrant region that’s relevant not just on the regional level but on the national scene like we used to be until yours what do you see that it would take what do you think it needs to create that beating heart so what it needs is for young people to embrace it and we need exciting things to do downtown so that that that generation my kids his generation want to be downtown for the record he was pouring pointing at Joey the producer and you’re talking not just because they wanna be downtown they want to live downtown and that’s why we’re creating 72 one-bedroom apartments there the effective rent will be about a buck 60 a buck fifty per unit weight per square foot all inclusive oh no it’ll be effective right okay when you include valet parking etc you’ll be about a buck 80 a buck ninety right all utilities will be included valet parking you have of course you have access to you know room service and housekeeping service and I mean you’re living in a hotel right but if they if they find downtown exciting and they move downtown guess what every major corporation in the world wants to hire that generation right now that’s who they’re recruiting and if they want to be downtown those companies have to come downtown that’s my theory so that’s what we’re building and they will come Theory yes we are we’re aiming our residential units directly at that age group the 22 to 36 year olds and that’s kind of what you’re doing on the residential side you’re gonna do things on the like do things with office buildings and or anything like that we make offices to be seen but there’s lots of other developers who are doing lots of exciting things in the office space they don’t need us to do that if we can bring enough of the workers that need to that that fill those office spaces up if we can bring enough of them downtown mm-hmm those office spaces will fill up because companies will be forced to move down there because this is a generation that doesn’t like to drive they like public transportation they like their bikes they like to walk yeah and by the way you said fun things I would like to see a zipline downtown we’re gonna have all kinds of fun stuff we’re gonna have a movie theater in the chemical yeah good I don’t love that little one just like sort of four seats but for our residents yeah they can have a party down there prevent and watch a movie or whatever I may even have a golf simulator down there so they can play games Wow but I mean we have lots of a bowling alley a block away this is the National Museum of light all right a half a block away there’s lots of roaming is a block away there’s plenty of things downtown to do there we just want to make it more exciting more things to do downtown if we can get another building down there after we do the chemical and you know we but the thing is the funny thing is I have small developers friends who’ll say well you know downtown but there’s lots of small buildings downtown that are vacant right lots of them so you know there’s lots of room for every there’s there’s lots of opportunity and as a region if we care about St. Louis as a region and its place in this nation then we have got to make downtown a lot more vibrant that’s a great note to end on by the way I know you guys have another meeting to go to we have a whole list of questions we wanted to ask but a lot of it people can go to your website and they can see about the projects that you’re doing people can follow you guys on Facebook and they can learn more of the fun things that you guys have going on Joey will end up adding you know links to your website and your social media and stuff like that but do you mind just telling us your website for anybody who’s listening sure it’s WWW.restorationSTL.com perfect okay well we really appreciate you guys being here this is a super interesting yeah I’m honored to have you in here you know I was really excited when I heard that it was going to be the two of you coming in from your to you know to represent your company so that’s amazing thank you very much to anyone who’s listening I make sense for coming in so I guess that’s it take care