Ridgehouse Wanted to pay Kirkwood $2M, Kirkwood Said No

Last summer and fall, I covered four of the development proposals Kirkwood received—and ultimately rejected—in response to its RFP for two city-owned parking lots along Jefferson Avenue. With the city poised to decide on a new RFP for the vacated public works site, it’s time to revisit the final two rejected proposals. First up: Ridgehouse Companies’ $31 million plan, which may have been the most compelling pitch the city has seen yet.

If you missed any of the four rejected projects we previously covered, you can catch up on them here:

• Part 1 and part 2 of IPG’s boutique hotel and multifamily mixed-use proposal
• PJ’s multifamily mixed-use proposal
• NOVUS’ multifamily mixed-use proposal; and
• HDA’s boutique hotel and multifamily mixed-use proposal

Next time, we’ll round things out with Savoy’s submission. Today, let’s unpack Ridgehouse’s bold vision and the equally significant impact it would’ve had on the city.

The Ridgehouse Proposal

Ridgehouse’s plan was straightforward but ambitious:

• Two four-story buildings with 78 apartments (18 studios, 26 1-bedrooms, 34 2-bedrooms)
• 267 parking spots (a net gain of 120 spaces)
• 9,000 sqft of ground-floor retail woven into both sites

West Jefferson: Build a Better Mousetrap Parking Garage

The West Jefferson portion of the Rideghouse proposal was primarily conceived of as a 207-spot garage—but Ridgehouse seems to have given special care towards ensuring the structure contributed to the urban landscape and did not detract from Downtown Kirkwood’s quaint aesthetic. The ground floor of the building was to be fully wrapped in retail, except for the garage entrance tucked discreetly next to PJ’s. The plans even called for the ground floor retail to front the new alley the structure would’ve created between Jefferson and Ice & Fuel’s back patio, creating a newly activated pedestrian-scale corridor in Downtown. On floors 2-4, the building would’ve been fronted by 15 apartments (5 one-bedrooms and 10 two-bedrooms) that would’ve helped to further activate the streetscape.

East Jefferson: The Height of Moderation

The plans for the East Jefferson site called for a more conventional U-shaped apartment building featuring an additional 63 total apartments (18 studios, 21 one-bedrooms, and 24 two-bedrooms and 60 parking spaces, again fronted by ground-floor retail. Perhaps in a nod to the common refrain from residents that recent developments in Downtown Kirkwood have been out of scale with our historic built environment, Ridgehouse kept both structures to four stories, a full story below the roof line of Kirkwood Presbyterian Church that abuts the the East Jefferson site at the rear and the five-story James that sits a block away.

The $2 Million Elephant in the Room

While the overall design of Ridgehouse’s two-part project checks a lot of boxes —tons of new parking hidden from view, new retail, and 78 new homes with a variety of layouts, all at a very modest four stories— the feature that sets this proposal apart from any other is the fact Ridgehouse was willing to pay the city $2 million for the right to build the thing.

While every other respondent to the RFP stipulated that their projects would only be financially feasible if the city gave them the land (still not a bad deal for the city since they’d bring in upwards of $300k in new tax revenue and also a tremendous amount of new parking out of the deal), Ridgehouse was willing to pay close to the fair market rate to acquire the land.

The $2 million value is based on the “over $30 per sqft” that Ridgehouse says the Trammel Crow Team paid to acquire the land The James was eventually built on. Savoy, the only respondent whose proposal I have yet to write up, used a more expansive list of their own recent transactions on smaller lots in Downtown Kirkwood to arrive at a slightly higher estimated value of $2,683,000 ($41.40 per sqft x 65,280sqft) for the land. The true figure is probably something in between the two. At $2 million, Ridgehouse may have been asking for a slight discount but it was hardly a giveaway.

The Parking Pivot: “Let Us Charge Fees”

Now, in their submission, Ridgehouse also stipulated that the garage portion of the project would not be able to pencil at this price without the help of financial incentives (a distinction that was made by most of the proposals and which I explored more in-depth with the HDA proposal here). But even on something as mundane as how to fund a parking garage, Ridgehouse offered a forward-looking solution than most of the other proposals: Let them charge folks to park in the garage (emphasis my own).

Regarding the funding gap for the parking garage, we are open to exploring various options in partnership with the City of Kirkwood, including hourly fees

As I’ve mentioned on numerous occasions, charging for parking is a win-win solution. On the one hand, by charging a fee, you incentivize people to be more efficient in the parking they consume. Some people would rather walk or bike or carpool than paying for an additional parking spot, while others will be incentivized to be more efficient with their time in Downtown Kirkwood: spending money at local businesses and then clearing the way for more customers to do the same.

Further, the incentive structure created by paid parking (and the dynamic pricing facilitated by our Fybr sensors) would help ensure that there are always spots available for anyone who need them. No more circling the block and backing up traffic. Pay a nominal fee and use that time for more productive uses.

But best yet, charging for parking achieves all of this while raising revenue. Instead of asking for tax incentives to fund the garage (and cannibalizing desperately needed tax revenue from the city and Kirkwood School District in the process), Ridgehouse proposed letting the people who end up using the garage pay for its construction, like a toll bridge. It’s not a brand new idea, but it would be a massive step forward for Downtown Kirkwood.

The Bottom Line

What would the full economic impact of this project have been on the city’s bottom line? Well, I plugged in the numbers from Ridgehouse’s proposal into the same formula I used to calculate the HDA tax impact and arrived at a figure of $76,013 in additional annual sales tax revenue to the city of Kirkwood and $28,351 worth of additional annual property tax revenue to the city. Added together, that’s a total of $104,364 in tax revenue the city forewent in denying the project.

Then, if we add in the $2 million Ridgehouse offered for the land itself, Kirkwood is looking at somewhere in the ballpark of $3million in foregone revenue over the project’s first ten years. To put that in perspective, that’s enough to fund the entirety of the City’s local match obligations for both phases of the Grant’s Trail extension ($1.7m), the overhaul of Argonne ($522,400), and Clay Ave ($384,620) and still have money left over.

That’s before you even factor in the second-order effects of such a project:

• Presumably alleviating Downtown Kirkwood’s parking crunch would lead to more sales at local businesses (which, in turn would mean more sales tax revenue to the city)
• Adding residents to Downtown Kirkwood would mean more potential patrons and employees for those local businesses without necessitating more parking or traffic
• More housing in Kirkwood would help make the city more affordable for young adults establishing roots in the community and elderly residents looking to downsize

A Clear Winner

So how does a project that addresses Downtown Kirkwood’s parking shortage, injects much-needed revenue into city coffers, and helps alleviate the housing crunch get rejected—especially when it accomplishes all this at a reasonable four stories?

Perhaps the answer lies in a single image Ridgehouse included in their submission: a rendering of how the building’s massing would appear from a neighboring property—specifically, from Council Member Rheinnecker’s backyard.

Rheinnecker built a beautiful home in Downtown Kirkwood, then ran for Council on a platform of ensuring others couldn’t do the same. He won and has followed through, making sure that while Kirkwood desperately needs more housing (a fact he acknowledges), none of it will be built near him—even on some of the city’s most economically valuable land. The rest of the Council apparently agreed. The result? Less revenue for city services, fewer parking options, and a less vibrant Kirkwood. That was their choice—but it’s the community that will pay the price. All $3 million of it.