If St. Louis is ever to be a magnet for the middle class again, it may need more visionary realists like John Steffen and Craig Heller.
In six years, their Pyramid Construction Co. has risen to the top of the short list of housing developers who build and remodel houses in the city.
Compared with the housing boom under way in such places as O’Fallon in St. Charles County, Pyramid’s efforts are modest indeed. St. Louis officials, however, are delighted that Steffen and Heller have decided to defy the conventional wisdom that the city is dying.
As St. Louis struggles to hold onto its shrinking middle class, builders and developers like Heller and Steffen give officials hope that the city can be revived — block by block, neighborhood by neighborhood, ward by ward.
“We’re the largest producer of new homes in St. Louis, so that’s a shame,” said Steffen, 39, a former brother in a religious order with a penchant for blue jeans, a crew cut and speaking his mind. “Hopefully, we will attract some competition.”
This year Steffen expects Pyramid, housed in a ramshackle storefront at Arsenal Street and Compton Avenue, to finish about 70 new houses.
Some are brick, federal-style houses selling for around $100,000 to $132,000. The rest are three types of subsidized units: rental, gut rehabs and new built-to-own.
Last year, Pyramid built 38 units. Next year, Steffen said, the company will build about 80 units, “with an increase in unsubsidized housing.” Sales will be about $7 million this year and are expected to hit $9 million next year.
The point about unsubsidized housing is a matter of pride for Steffen and Heller: They want to demonstrate that the St. Louis housing market is vibrant enough to support a steady supply of high-quality new houses without conditions and subsidies.
“The city needs to show that it can stand on its own,” Steffen said.
Alderman Marty Aboussie agrees.
“When Steffen and Heller can do stuff without subsidies, that shows the market can carry the price of new homes,” said Aboussie , who chairs the Housing, Urban Development and Zoning Committee.
Pyramid does get a couple of important breaks: 10-year abatements on property taxes for new homeowners and relatively cheap lots (about $1,000 for 42 feet by 125 feet) from the city. The lots, Steffen notes, may be in terrible shape. They may need clearing and filling before they can support a foundation.
In the last several years, Steffen and Heller have built or rehabbed houses in Baden, in the city’s far north, as well as far south, in Carondolet.
Much of their efforts have been concentrated in such neighborhoods as Shaw (where both live), Benton Park and Benton Park West, Tower Grove East, Fox Park, the Gate District, King’s Oak, Forest Park Southeast and along Chippewa.
It’s not unusual to find a new or remodeled Pyramid house anchoring a block of federal-style brick rowhouses in a historic neighborhood.
Steffen’s especially proud of 30 new subsidized rental houses going in a few blocks north of the Veterans Administration Hospital. On a recent weekday, Cottage Avenue was cluttered with contractors’ trucks as workers scrambled to finish the units by the end of January.
Steffen also likes to show off the model home in the 77-unit development in the Gate District near the southwest corner of Jefferson and Chouteau avenues.
The development is called the Classics of Eads Park. Prices run from $103,500 for 1,512 square feet up to $131,900 for 2,028 square feet.
The compact houses are nicely finished with small yards and a fine view of The Arch.
People who have worked with Steffen and Heller say the secret to their success is multifaceted. They know and care about the city. They work hard and long hours, and they are willing to forego a quick profit in hopes of making plenty later.
They have established excellent credit and have a reputation for getting their work done on time and under budget.
They line up qualified prospective buyers so their houses don’t end up standing empty. They work closely with city housing agencies and the aldermen in whose wards they are building.
They also have cultivated good relationships with such private investment companies as St. Louis Equity Corp., which was created to take advantage of a federal tax credit for low-income housing. It is funded by a number of large corporations here.
The corporation provides 99 percent of the capital Pyramid needs to build rental housing; the investors take tax credits while helping people buy homes.
“They have had the tenacity to make it through the red tape,” said Alderman Steve Conway. “There are eight steps to the approval process to build a house (in the city). They keep it moving forward. They’ve been a godsend for the redevelopment of property in the city of St. Louis.”
Gee Stuart, director of Operation Impact, a non-profit organization that uses block-grant money to help low- and moderate-income people buy new or rehabbed houses, said Steffen and Heller encourage renters in their units to think about buying homes.
“They’ll go up to one of their tenants and say, `You are paying your rent well. You should think about buying a home of your own.’ Then they help them arrange the financing,” Stuart said.
Steffen is a child of the city, and he’s comfortable with people of different races. His father, a Lutheran minister, was pastor of Grace Lutheran Church at St. Louis and Garrison avenues.
Steffen remembers that the neighborhood where he lived near the church had changed from white to black residents some 30 years ago and, for a while, he and one of his three sisters were the only white children in school.
Rather than go to college, Steffen entered a non-denominational religious order. He took vows of poverty and chastity and lived in several cities on the West Coast.
In the nine years he was in the order, Steffen rose to become business manager of the order as well as a member of the board of directors.
Then disaster struck. His only brother was killed, and Steffen found it was time to return to St. Louis to live close to his parents and his sisters.
He had worked for another contractor who built houses in St. Louis County. He became a manager of a now-closed restaurant on Laclede’s Landing.
That’s where he met Heller in 1989. Heller had answered an ad to work in the restaurant. He was an airline pilot on duty 12 days a month who wanted something to do between flights.
“I hired him on the spot,” Steffen said. “Here was a maniac workaholic with ants in his pants.”
Steffen left the restaurant after a couple of years and returned to building with a contractor. Heller stayed at the restaurant as assistant manager. They talked a few months later when Steffen called Heller and asked if he wanted to start rehabbing houses.
Heller, 36, flies for Northwest Airlines. He makes about $100,000 a year piloting Boeing 757 jetliners around the United States.
An unmarried farm boy from Prairie du Rocher, Ill., who prefers living in an apartment in the Shaw neighborhood, Heller has a surplus of energy and spare time. He has invested thousands of dollars of his own money into Pyramid while Steffen has contributed mostly “sweat equity” and his knowledge of the city.
“With my airline deal going, I could live in the Grand Caymans or wherever,” Heller said. “But I saw a need to make things work in this city.”
Steffen puts it a little differently: “I am a religious person. I believe I am doing what I am supposed to be doing. I found this in front of me to do.”
