Confronted with spiking construction costs and unexpected foundation problems, developers of the Arterra apartment high-rise in the Crossroads asked for a little extra help Wednesday.
And they got it.
The Land Clearance for Redevelopment Authority on Wednesday approved a request by a joint venture by Copaken Brooks and St. Louis-based Altus Properties for a sales tax exemption on construction-related materials for its 12-story apartment project at 2100 Wyandotte St.
By Wednesday, Arterra had become a 126-unit apartment proposal, this time with Altus Properties at Copaken Brooks’ side, except now it has a $40 million price tag.
Part of the increase is because the building itself is somewhat larger, with more apartments and ground-level retail space to offer. Another reason is the developers brought in a new general contractor in JE Dunn, which calculated a bigger construction budget than Arterra’s previous general contractor.
Those factors, coupled with an undiscovered massive concrete block underneath the undeveloped block at 21st and Wyandotte streets and increases in construction and labor costs, put the future of Arterra at risk.
But the developers now say they can proceed.
Jon Copaken, a principal at Copaken Brooks, said the financial returns on the latest Arterra proposal won’t be as high as the original concept.
“The project returns are down,” Copaken said. “It’s still a project we’re ready to do, we’re going to do.”
In the latest proposal, the developers have nearly $8 million in equity in the project with a $31.8 million construction loan covering the rest. The value of Wednesday’s sales tax break on construction materials saves the developers about $900,000 in the budget, according to documents filed with the LCRA.
Construction is expected to start early next year.