0:05

In the last few years, there's been a

0:07

lot of talk about how downtowns in big

0:10

cities are hollowing out, how

0:12

they're falling apart, and how

0:14

they're at risk of something called the Doom

0:16

Loop. Perceptions of a city

0:18

spiraling into what headlines are calling a

0:20

Doom Loop. The Doom Loop calling it

0:22

a Doom Loop. Threatening cities beyond

0:25

New York, Dallas, Chicago. Do

0:27

you think Philadelphia is in one

0:29

of these urban Doom Loops? So

0:31

I think that certainly is what

0:33

we're inching towards. Voters' concerns are

0:35

crime, homelessness, and the so-called Doom

0:37

Loop. The Doom Loop

0:40

is this big buzzword right now when

0:42

people talk about downtown office districts. That's

0:45

our colleague Conrad Pizzia. What

0:47

people mean by Doom Loop is

0:49

the self-reinforcing cycle where people

0:51

stop going to the office, things

0:54

become empty, and that causes

0:56

all these ripple effects. And it's really

0:58

something that every city is kind of afraid of

1:00

right now. While

1:04

many cities are worried about falling into

1:06

a Doom Loop, Conrad found a

1:08

city that's actually in one. St.

1:11

Louis. I think what

1:13

makes St. Louis unique is that it's kind

1:15

of far along in this Doom Loop already,

1:17

and way further along than some other cities.

1:20

It started earlier there, and

1:22

this is really what the future looks like for

1:24

other cities if they can't stop this slide

1:27

of companies moving and businesses closing,

1:29

the self-reinforcing cycle. Welcome

1:34

to The Journal, our show about

1:36

money, business, and power. I'm

1:38

Jessica Mendoza. It's Tuesday, April 16th.

1:47

Coming up on the show, the cautionary

1:49

tale of St. Louis' Doom Loop. St.

2:05

Louis is one of Missouri's largest cities, with

2:07

about 300,000 people. It's

2:11

home to big landmarks like the Gateway Arch,

2:13

the St. Louis Arch, the

2:15

spectacular structure overlooking the famed

2:17

Mississippi River, and the Cathedral Basilica

2:19

of St. Louis. It's

2:25

also where the St. Louis Cardinals play baseball. Welcome

2:28

to Busch Stadium, our

2:30

opening day in St. Louis. St.

2:33

Louis is kind of a pleasant,

2:35

vibrant, fun city. People

2:38

like living there, but then you

2:40

go downtown to the office district and it's just this

2:42

void. Inside

2:44

the city's sprawling office district, there's

2:46

a 15-block span that's a total

2:49

ghost town. Conrad

2:51

went there earlier this year. Right now, at

2:53

the corner of the H, and

2:55

Olive is walking north. The

2:58

Capitol building. The

3:00

wall of trust is just a bunch.

3:03

And it's kind of jarring. Because a city

3:05

of that size, you think it has a

3:07

vibrant office district. And there's just none of

3:09

that downtown. So you have all this infrastructure,

3:11

you have these giant office buildings that

3:13

make you think, okay, this is downtown, this is where

3:16

the crowd's going in and out at 9 o'clock in

3:18

the morning and 5 p.m. And

3:20

then you walk around at 9 a.m. and there's

3:22

barely anyone on the streets. There's barely anyone walking.

3:25

There's a lot of empty, boarded up storefronts.

3:28

You can see here the doors

3:31

and windows boarded up. Spray

3:34

it over. And

3:37

don't get me wrong, it's not completely empty.

3:39

There are still tourists, there are some hotels,

3:41

but it's not much going on. Doesn't

3:44

sound like a nice place to be. It's

3:46

really hard to describe how depressing some

3:48

stretches of downtown look. And

3:51

it's not just that the streets are empty,

3:53

it's that the storefronts are boarded

3:55

up, that they're

3:57

sprayed over with graffiti, that

3:59

you... You walk around and you hear

4:01

broken glass crunch under your shoes. You

4:04

see these, you know, if you pay attention, you

4:06

see these little bits of copper pipes that are

4:09

left behind by scavengers who go into empty buildings

4:11

and rip open the walls and pull out the

4:13

copper pipes to sell them. And

4:16

it's just the kind of stuff that you

4:18

don't associate with the central business district of

4:20

a overall pretty vibrant city. Businesses

4:25

have been leaving St. Louis's downtown

4:27

area for years, and

4:29

some of them aren't going that far. There's

4:33

this rival office district called Clayton, which

4:35

is just outside the city, which

4:37

has basically been stealing office tenants from downtown

4:39

St. Louis for decades. It's,

4:41

you know, it has newer buildings, it's considered

4:44

to be safer, and it's closer to where

4:46

a lot of white collar workers live in

4:48

the suburbs. And so it's really

4:50

drawn a lot of people away from downtown. And

4:53

this is really an issue that has

4:55

hurt downtown St. Louis. Arrivals

4:58

stealing office tenants is a big problem

5:00

for St. Louis, because for

5:02

a long time, its downtown has been

5:04

centered around mainly one thing, offices.

5:07

And really what a lot of those

5:09

cities that are most at risk have

5:11

in common is bad urban planning. They

5:13

have these downtown office districts that are

5:15

basically all kind of gloomy,

5:18

big office towers and parking garages and

5:20

some hotels, but really not much else.

5:23

And this is kind of the product of

5:25

this old thinking that people live in the

5:27

suburbs and then they drive, they take their

5:29

cars and they drive downtown to work. And

5:32

that's not what people seem to want these days. They

5:36

want vibrant districts where you can work and

5:38

you live nearby, maybe you can walk to

5:40

work or bike to work. There's

5:43

bars and restaurants and theaters and

5:45

sports venues. And the

5:47

cities that don't really offer this, they're having challenges.

6:00

Louis Closed. The. Railway.

6:02

Since building is kind of like the

6:04

Empire State Building a Saint Louis, it's

6:06

not as pauses twenty one stories, but

6:08

it's as important and it's arguably as

6:10

famous in St. Louis. It's more than

6:12

hundred years old, studying architecture, a beautiful

6:14

facade, and it used to be home

6:16

to the giant department store. The people

6:18

would go to the shop and they'd

6:21

go have lunch there at the restaurants.

6:23

Everyone mention the French Onion soup which

6:25

apparently was with Fc Amazing. The

6:27

building opened and nineteen. Thirteen. And.

6:29

For many decades it was the heart of the

6:32

city's business district. And and

6:34

twenty thirteen And that a wave of departments

6:36

are close as across the country. The.

6:38

One in the railway exchange building close

6:40

down. And after that, Many.

6:43

Other businesses inside the building close down

6:45

too. Soon. The whole place

6:47

said it's doors. And that twenty

6:49

one storey building has been sitting vacant. For

6:52

years. Without

6:54

across from the grounds Here. Excess

7:01

obviously. When

7:03

I walked by the railway sent building on a

7:05

Sunday afternoon. They have now covered

7:08

all the ground floor windows with steel place.

7:10

But. Sometimes we'll get in and then they open the door

7:12

and I walk by and the door to this building

7:14

was open. And it was kind

7:17

of curious. I looked inside and it

7:19

was just completely dark. Does.

7:21

Extend smell smoke at a know what it

7:23

was. Some. Some sort of smoke. There

7:26

was a single flower pot on the ground

7:28

with a sunflower of sticking out of it

7:30

mile and that was it. It's very

7:32

scary looking building now. When.

7:34

The Railway Exchange building closed. It took

7:37

a lot of neighboring businesses down with

7:39

it. I think every commercial

7:41

building downtown has its on the ecosystem

7:43

and a building as big as the

7:45

runway. Sam's has a really big ecosystem

7:48

around it and what I mean by

7:50

that is. This. All these

7:52

shops and restaurants and other venues in the

7:54

streets around it. The kind of depend on

7:56

the people coming in and out of that

7:58

building to think that. There are thousands of people

8:00

going in and out of this building all the time to

8:03

work, to shop, to go

8:05

to the restaurants. They

8:08

kind of provide the

8:10

livelihood of sandwich shops

8:13

and karaoke bars and

8:15

delis across the street. Once

8:19

people don't go into that building anymore,

8:21

these businesses around it

8:23

don't have any customers anymore and they're forced to

8:25

shut down. That's exactly what happened. The

8:29

next domino to fall, the

8:31

AT&T building. The office building

8:33

three blocks away. It was vacated in

8:35

2017. 44

8:38

stories, the biggest office

8:40

building in St. Louis. And

8:42

that was really important because you now had

8:45

the two biggest office buildings in the city

8:47

of St. Louis who were really

8:49

close together, both completely vacant, both

8:51

completely boarded up. And that's a

8:53

really big deal because if a building's

8:55

mostly empty, it's 50% empty, 90%

8:59

empty, there's few people in there, but

9:01

at least there's still a doorman. At

9:03

least there's still security, at least there's still

9:06

lights in the lobby. It feels

9:08

less depressing. It doesn't feel

9:10

as scary as a completely boarded up building.

9:13

Once the building becomes completely abandoned,

9:15

it's a much bigger deal for the neighborhood around

9:17

it and it can really become an issue. And

9:19

in St. Louis, you don't have just

9:22

one building like that. You have two buildings. And

9:24

there are the two biggest office buildings in the

9:26

city of St. Louis. They're two

9:28

or three blocks away from each other and

9:30

they're both completely abandoned, boarded up, and

9:33

have been for basically many, many years.

9:41

After the Railway Exchange Building and the

9:43

AT&T Tower closed, smaller dominoes

9:45

began to fall too, like

9:47

a Panera bread. You'd think

9:49

that a Panera sandwich shop closing is not

9:51

a big deal, but it was

9:54

a big deal to the attorneys at this

9:56

law firm Brown and Crouppen, which was just

9:58

across the streets. And it

10:00

was also a place where people from nearby streets

10:02

would come to to get lunch. And

10:05

I talked to Andy Crouppen, who's a

10:07

managing partner at this law firm, and

10:09

he said, when that closed, all

10:11

that activity just disappeared and

10:14

became this void. Just like

10:16

the railway exchange building is a giant void

10:18

for downtown, this became its own little void

10:20

on a much smaller scale for the

10:22

area around it. The law

10:24

firm near the former Panera left a few years

10:26

ago. And now it has an

10:28

office in a different part of the city. But

10:32

why didn't any businesses just replace the ones

10:34

that closed in the railway exchange building?

10:37

Yeah, I think this gets us back to

10:39

the general issues that downtown faces, right? So

10:41

if you have an empty

10:43

building in the middle of Manhattan, it's probably going

10:45

to get filled pretty quickly because there's all those

10:47

tourists and office workers, and you can make money

10:49

there if you open a business. But

10:52

if you suddenly have a giant building more than

10:54

a million square feet, completely empty in a city

10:56

like St. Louis, it's more

10:59

challenging because you're in a downtown that's

11:01

already been losing businesses to the suburbs

11:03

and to other cities. You're

11:06

in a downtown that doesn't really have a

11:08

lot of apartment residents that could kind of

11:10

be customers for shops and restaurants and such

11:12

a building. And that just makes

11:14

it hard to fill a building of that size. And

11:17

I imagine that the pandemic must have had a pretty

11:19

big impact on this doom loop. Oh, yeah. The

11:22

pandemic was a huge deal for downtown

11:25

St. Louis, as it was for downtowns

11:27

anywhere in the U.S. The

11:29

issue in St. Louis was just it was already in bad

11:31

shape when the pandemic started. And now

11:33

on top of that, you have remote work. To

11:36

give you a sense of just how far

11:38

St. Louis' downtown has fallen, consider

11:41

how much the AT&T Tower is now

11:43

worth. The AT&T

11:45

Tower, which again, giant building, more

11:47

than a million square feet, 44 stories, it

11:51

sold I believe earlier this

11:53

month and it sold for three point five

11:56

million dollars, which is nuts. That's like the

11:58

price of a two bedroom apartment. The

12:00

Upper West Side. I was gonna say that's

12:02

not a lot of money for a skyscraper. Yeah,

12:05

three a half million and back in

12:07

two thousand and six, it's source for

12:09

more than two hundred million. Wow. So.

12:12

Those are really two numbers that so you what

12:14

happens and the St. Louis office District and

12:16

the last twenty years or so. And.

12:19

Again, the reason why it's so it's

12:21

the so that or is it's design

12:23

empty building. Where. It's it's very hard to

12:25

figure out what to do with it. Signing

12:28

up. Why it's so hard

12:31

to. Reverse A Do. This.

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13:17

City. Officials and local business leaders

13:19

know St. Louis' office district as

13:21

in bad shape. And a

13:23

throwing a lot of ideas around to try to make

13:25

things better. says. It loses. Try

13:27

to do two things where you derive

13:29

the Us District One is to just

13:32

get more people on the streets, And

13:34

it's doing that by making the streets

13:36

nicer. They're planning to invest in traffic

13:38

barriers to stood on cars and landscaping

13:40

and bike lanes just to make it

13:43

easier for people to walk and bike

13:45

around. Basically. They're also

13:47

offering monetary incentives for businesses to

13:49

move downtown. Zero. Restaurant

13:52

or a shop. You wanna move Downtown

13:54

Des St Louis Development Corporation and Greatest

13:56

St. Louis which is this business and

13:58

civic group that. money to help pay

14:01

for the build out of your store for construction

14:03

work. They'll give you money for, she

14:05

wanted to add outdoor seating to her restaurant. They'll give you

14:07

money if you just want to open up a pop up

14:09

store. It's not a lot of money, but

14:12

it'll help. In an

14:14

op-ed published last week, the mayor and

14:16

a local business leader wrote, quote, well,

14:18

there's much work to do. We are

14:20

optimistic about the future of St. Louis

14:23

and the revitalization of downtown. One

14:26

idea that gets talked about a lot in St. Louis

14:28

and elsewhere is turning office

14:30

buildings into apartments. But

14:33

that's a lot harder than it sounds. Take

14:35

for instance, the chemical building, which is

14:37

a couple blocks away from the railway exchange building.

14:41

The chemical building was sold three times

14:43

since 2016 to investment firms. And

14:46

each time the buyer said it was going to

14:48

turn it into apartments. Each

14:50

one of them fails and nothing's happened.

14:53

It's very eerie, there's this banner over

14:55

the doorway that says, beautiful

14:57

residences starting at 170,000. And

15:00

above it, the windows are boarded up or

15:02

broken and there's graffiti everywhere and it's

15:05

an abandoned building. Why haven't they

15:07

been able to convert it though? Like three developers have

15:09

looked at it. What's the problem?

15:12

In general, the challenge in St. Louis is

15:14

it's expensive to convert buildings. It's

15:17

a market that investors look at and

15:19

say rents are low. It doesn't really

15:21

have a growing population. So

15:24

why would I invest in real estate development

15:26

here? These buildings often aren't easy

15:28

to convert because they have these very big floors

15:30

and often they have windows that don't open. There's

15:32

all these issues that office buildings have that make

15:35

it hard to turn into apartments. And

15:37

that just doesn't mean it's impossible, that just makes

15:39

it hard to convert these office buildings. Yeah,

15:43

it sounds like a really tough problem to solve.

15:46

Yeah, I think this is really one of the

15:48

key lessons of what happened in the St.

15:50

Louis office district. The

15:52

longer this doom loop goes on, the

15:55

harder it gets to stop or reverse it. Because

15:58

initially if it's just one empty building. you

16:00

can redevelop that, right, at

16:02

relatively low expense. The more

16:05

buildings become empty and the more retail

16:07

around it dies down, the

16:09

more depressing downtown it becomes. The

16:12

harder it becomes to get people to move there

16:14

and to convince investors that this is an area

16:16

that you should spend money on. Is

16:19

there any hope for St. Louis? I

16:22

think there is. I think there is plenty of reason to

16:24

hope. And

16:26

a big reason to be optimistic,

16:28

I think, is this other

16:30

part of downtown that's not the office

16:32

district, right? Because the office district isn't

16:35

all of downtown. There's also this former

16:37

industrial area that really went into the

16:39

decline during the 1970s, 60s, 80s, when

16:43

factories kind of started disappearing from

16:45

cities and then

16:47

became revitalized over the past two

16:49

decades, where a lot of old

16:51

industrial buildings were converted to loft

16:53

apartments, hotels have opened, there's bars,

16:55

restaurants, there's a brewery, there's

16:58

a big soccer stadium, and

17:00

I think that the reason why this matters and

17:02

why it gives me reason for optimism is it

17:04

kind of proves that people want to be in

17:06

downtown St. Louis if it's nice. So

17:10

it's not an unfixable issue. It's not like people

17:12

will never want to be in downtown St. Louis

17:14

again. The question is just how

17:16

do you recreate that success from

17:19

these former industrial areas in the office district?

17:23

So what does this story tell you

17:25

about the problems facing downtowns

17:27

across America? I

17:29

think the cities that are most at risk are

17:33

cities like St. Louis, Midwestern

17:36

cities that have had shrinking

17:38

populations, these slightly

17:40

depressing office districts that are really just about

17:42

office towers and parking garages where there isn't

17:44

much else going on. So

17:46

it's sort of a window in the future for a

17:49

bunch of cities. Like you can look at St. Louis,

17:51

the office district there and say this is what might

17:53

happen in my city if we don't stop the doom

17:55

loop. And what

17:57

St. Louis is finding is that because. this

18:00

downtown office district has been in decline

18:02

for so long, it's now so much

18:04

harder. It now requires so much more

18:06

investment and so much more efforts to

18:08

revitalize the district. If the

18:10

city had been serious about turning things around 10 years ago,

18:13

it might have been a lot easier. That's

18:33

all for today, Tuesday, April 16. The

18:36

journal is a co-production of Spotify and the

18:38

Wall Street Journal. If you like

18:41

our show, follow us on Spotify or wherever

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you get your podcasts. We're out every weekday

18:45

afternoon. Thanks for

18:47

listening. See you tomorrow.