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Two local projects buck the condo bust

"Location, location, location" has long been the mantra in real estate. Even with condo sales virtually dead in the water, when the mantra fits, sales happen.

Take the Ball Park Lofts at Cupples Station, within steps of Busch Stadium. A few weeks ago, well into the housing bust, developer Blue Urban staged what company President Kevin McGowan likes to call an "NFL-style draft" for sale of condos on the fifth and sixth floors of Building 9, one of three the company is renovating there.

All 36 units sold in 40 minutes. "That's about $9 million worth of condos," McGowan said.

Prospective buyers sent in checks of $2,500 apiece for a place in line, he said. "We assigned you a draft number in the order your check was received. If your check was the first we received, you were first on the list."

Then, on a Saturday in May, in numerical order, prospective buyers could pick their units and plunk down earnest money for them.

McGowan said he had no doubt the unusual sales approach would work.

Why?

"We did it a year ago with a couple of floors in Building 8 (at Cupples Station)," he said. "More than half of those units were sold."

McGowan knows location drove sales at Building 9. "If this wasn't across from the ballpark, we wouldn't even propose a condo project there right now," he said. "We'd do apartments."

As for the rest of the condo market, forget it.

"I think condo development and condo sales nationally as well as in St. Louis are just dead, and they're going to be dead for some time," he said. "But it's not all bad. I would point out that there are still projects that can do very well depending on location and a couple of special nuances but, in general, the market is gone - it's not with us anymore."

McGowan acknowledged Ball Park Lofts doesn't attract a typical buyer. They came from "all over the country," with at least one from overseas.

"It's a special project in a special location," he said. "They're basically Cardinals fans. A lot of people will just be coming in for weekend ballgames."

Blue Urban specializes in renovating historic properties. It got approximately $40 million in tax incentives to renovate the three Cupples buildings, a $100 million project.

The $30 million Building 8 project, with 68 one-, two- and three-bedroom condos and two floors of commercial space, is nearing completion. Work on the $35 million Cupples No. 9 began recently. It will have 54 one-, two- and three-bedroom units with a Mike Shannon group restaurant on the first floor. Osborn and Barr Communications will rent the second and third floors, and Adamson Advertising will rent the fourth floor. Both firms will relocate from Clayton.

Construction will start next spring on Building 7, a $47 million project with 120 units. "They're likely to be all apartments," McGowan said.

In projects other than Ball Park Lofts, downtown condo sales are virtually frozen. "This year in particular people that put down a deposit a year or so ago are not buying," McGowan said.

"Banks don't feel these reservations will stick," McGowan said. "Nobody is going to get a condo project financed anymore ... at least until the banking industry sorts itself out."

Cupples Building No. 9, however, is more than 86 percent preleased and presold.

Another condo project that has escaped the sales slump is Hanley Station, a mixed-use project by MLP Investments LLC at Hanley near Eager Road.

MLP has built 150 condos, 11,000 square feet of retail space, an extended-stay hotel, a restaurant and two parking garages where small warehouse buildings used to be.

The developer also extended Strassner Drive from Hanley to Brentwood roads, including a stretch it built under MetroLink.

Project Manager Andrew Checkley said 105 condos were sold in the first 18 months of sales.

"For a condo project, that's fantastic," he said. "We've been able to avoid a lot of the downfalls of the real estate market because it's such a smart decision for people to live there. It's a Class A location."

Less than a mile from Clayton, the one- and two-bedroom condos, priced from the $180s to the $280s, have a lower price tag than Clayton units, he said.

The development also fills a niche by bringing people close to where they work, shop and spend their social time, Checkley said. "People are pressed for time. This project is in an area that typically has been harder for people to live in."

Buyers include empty-nesters, medical students and young professionals, Checkley said.

"Our demographic is quite