An Army of Teachers in the Jefferson Arms?

The Post Dispatch ran an article 11-27-11 in the business section about the Jefferson Arms apartment complex remake proposed by McGowan Brothers Development  (MBD).  A key tenant in this project will be Teach For America who would  initially take 5,000 square feet of office space in the building, eventually expanding to 11,000 square feet.  Of the proposed 500 apartments in Jefferson Arms, TFA would like to see approximately 125 of them rented to 250 TFA teachers at a reduced rate that comes out to about 25-30% savings compared to similar properties in the area.  A charter school is also on the wish list for the Jefferson Arms as well as a conference center.

The property was bought in 2010 by David Jump, who many know as the agriculture-river barge-speculator who went on a buying spree in the 90’s and purchased nine buildings along Washington Avenue.  Though it was hoped he would be part of the downtown revitalization effort, Kevin McGowan of MBD, who bought some buildings with Jump, soon discovered that his partner preferred to hold onto the properties and wait for them to appreciate as opposed to investing in them.  Jump considered real estate a hobby and preferred to flip his real estate holdings. His tendency was to let others do the improvements and wait for the neighborhood values to rise.  For instance he purchased a building in that area in 1990 for $900K and then sold it for $4.2 million a few years later having done nothing to the building. Jump may be a shrewd investor, but you’d be hard pressed to call him a philanthropist. He bought the Jefferson Arms last year on a foreclosure and has used the parking garage fees to pay the debt service and taxes on the property.  He has, as is the past, made no improvements to the property other than to drive out all the existing residents.

Don’t fault Jump however.  Without his initial investment in this part of downtown St Louis, other businesses who came in to actually improve the Washington Avenue area would not exist; businesses like Pyramid Construction who was the Jefferson Arms previous owner since 2006.  Hard economic times crushed their vision of turning the building into luxury condos for seniors and drove Pyramid out of business.   Jump, with his buy it and hold it philosophy, lives on to make other deals.

This philosophy has gotten him into trouble with the city in the past.  The City of St. Louis Building Division cited Jump for numerous violations related to the Lesser-Goldman Building in 2005 , including its rotting window frames, missing bricks, defective and missing gutters and accumulation of garbage.  Perhaps this is what motivated him to work with MBD to actually do something with the Jefferson Arms property.  

Clearly Jump is not going to provide the funding for the remake of the Jefferson  Arms. So who is?  Perhaps the MBD and their mysterious Missouri Urban Revitalization LLC partner.  (A concerted check with the MO SOS could find no such corporation listed) The only web reference to MURL is on MBD’s own site,

“Missouri Urban Revitalization LLC is in business to help revitalize low income communities in Missouri.  MURL's principal partners have worked in blighted communities for over 30 years, and have identified many areas in Missouri that with a collaborative effort from MURL, the state of Missouri, the federal government, and local business's, and non profits these underserved communities can be mended.  MURL has made a strong community impact in downtown St. Louis along Washington Avenue, work that has drawn billions of dollars of investment to the area.  MURL has identified the need to increase educational services in these communities and has begun forming partnerships with groups to help improve the educational services provided in these low income communities.  MURL realizes that through better education a community can create a new culture, a more positive culture, a more productive culture.”

Matt Philpott, MBD Director of New Markets program said it is hoped the revamped apartment complex, “would bring a lot of people and activity to downtown” and increase demand for nearby services.  Does that sound familiar to anyone?

Recall the Ballpark Village proposal.  In 2008 the BPV was envisioned as a first-class entertainment and business center with 300,000 square feet of office space and 100-250 residential units.  It  would contain shops, restaurants, office space, a residential area and hotel accommodations at a price of $600 million which was supposed to be funded by future tax revenues.

The construction of Ballpark Village was expected to bring  2,000 permanent jobs to the area . "Ballpark Village is going to be spectacular, and we are thrilled that an agreement has been reached," said Blake Cordish, senior vice president of The Cordish Company, in a statement. "Most importantly, as we have experienced in other cities, Ballpark Village will act as an anchor for the continued renaissance of downtown St. Louis."

http://stlouis.cardinals.mlb.com/news/article.jsp?ymd=20080723&content_id=3184896&vkey=news_stl&fext=.jsp&c_id=stl

Jump forward just 3 years to 2011. The Ballpark Village vision has been scaled-back from 10 blocks to 2, from $600 million to $100 million with only 100,000 square feet of stores and restaurants and a new corporate headquarters for St. Louis-based Stifel Financial Corp. And now the project is looking for city and state officials to approve a plan to use an estimated $35 million in tax proceeds from the site to help fund its construction.

The plans for the Jefferson Arms are clearly in the early defining phase. The vision laid out in the  Post article sounds almost as grand as BPV. It’s ultimate scope and success will be dependent upon financing.  So how does Teach For America fit into this aspect of the redevelopment?

A little history of Teach For America - TFA was first created and funded by the re-established Higher Education Opportunity Act  in 2008 under the Education and Labor Committee. It grants funds for A) Recruiting and selecting teachers through a highly selective national process.  (B) Providing preservice training to such teachers through a rigorous summer institute that includes hands- on teaching experience and significant exposure to education coursework and theory. (C) Placing such teachers in schools and positions designated by high-need local educational agencies as high- need placements serving underserved students. (D) Providing ongoing professional development activities for such teachers’ first two years in the classroom, including regular classroom observations and feedback, and ongoing training and support. [Section 806, part (d)]

Teach For America recruits college graduates to commit two years to teach in low-income communities and become leaders in the movement to end “educational inequity.”  Anyone who has done college tours in the last couple of years has no doubt been overwhelmed by TFA’s recruitment efforts on campus. They do not specifically recruit those with teaching degrees.  In fact, at a time when we are so heavily stressing STEM courses, TFA would prefer to enlist (a word specifically chosen which we will explain later) top students in other disciplines to teach in inner cities or rural districts.  They connect these new “teachers” with local education placement agencies and school districts.  Any funding or benefits for these teachers are picked up by the school district in which they secure employment.

TFA’s role is to provide additional teaching instruction or help with local certification requirements since, as we said, many of these teachers do not have teaching degrees. They  also offer “no-interest loans and grants to help [their] corps members in their transition.”  These grants, $1-6k, can be used for testing and certification fees, travel to the TFA summer institute as well as relocation expenses. In 2010, more than half of the TFA corps received this transitional funding, totaling $7.7 million in awards. That came to 30% of their total funding for FY 2010 ($25m).  Last year they place 7,500 teachers in 33 regions across the country reaching 600,000 underserved pre-k-12 students. 

So did McGowan Brothers happen to stumble across TFA as an anchor tenant? Recall the last few lines of MURL’s mission statement, MURL has identified the need to increase educational services in these communities and has begun forming partnerships with groups to help improve the educational services provided in these low income communities.  MURL realizes that through better education a community can create a new culture, a more positive culture, a more productive culture.” They have an interest in education. So do many other for profit ventures because education is the market of the future. There is a lot of money to be made in education.

This year Fortune Magazine listed TFA 82^nd on their list of 100 best company to work for 2011.  This was based on figures like a 10% job growth with 1,236 US employees.  Sounds like a tenant who will have the necessary funding going forward to pay their rent.

And where did McGowan come up with the idea of turning the apartments into reduced housing for new teachers? The Post article points to a similar project done in Baltimore, the Astor Court apartments.  They have 36 apartments in an “education community, where teachers can share common experiences in the building's meeting and research rooms.”

The project financing involved multiple partners including M&T Bank, Fannie Mae, the Baltimore City Department of Housing and Community Development, the Baltimore City Healthy Start Program, the Maryland Department of Housing and Community Development, the Maryland Historical Trust, Mercantile Bank, Community Capital of Maryland, and St. Mark’s Evangelical Lutheran Church. As an historic renovation, the project qualified for local, state and federal historic tax credits. The Abell Foundation provided loans and guarantees to complete the $6 million project financing.

Sounds like a lot of public money to provide the apartments in the first place, and more public money to subsidize them going forward.  This was important to Baltimore to bring in more teachers to their struggling inner city schools.  It may also be important to St. Louis to accomplish the same goal.  But it means that we are heading down the path of providing living amenities to public employees. The only other public employees who  receive such benefits are the military. Like the military, TFA recruits must sign on for a 2 year tour of duty. In exchange for providing those two years of service to their country in some admittedly hostile and dangerous environments, we will provide them a salary, health care, perhaps retirement plan and housing, not all through the exact same funding source, but through various taxpayer funded sources. So is creating this literal army of teachers the direction we want to go with education?

Watch for future blogs with more information on TFA and TEACH.