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Landowner Awarded Punitive Damages, Attorney Fees Against Contractor, Utility Company

in Columns/Law
James R. Keller

By JAMES R. KELLER

Missouri’s Southern District Court of Appeals recently upheld a jury verdict and court judgment in favor of the landlord and against Carroll Electric Cooperative Corp. for $12,224 in actual damages, $75,000 in punitive damages and $59,456 in attorney’s fees. The appellate court also upheld a separate judgment for the same amount in actual damages – but not punitive damages – against Seven Valleys Construction Co.

The case is Bare v. Carroll Electric Cooperative Corporation and Seven Valleys Construction Company, 2018 WL 1281114, decided March 13.

The judgment against Carroll Electric and Seven Valleys was for common-law trespass. The appellate court decided there was sufficient evidence to support the jury’s verdicts and the trial court’s judgments.

Carroll Electric had hired Seven Valleys to clear a right-of-way and pile resulting severed trees and brush on the edge of the right-of-way. Steven and Suzanne Bare were the co-trustees/owners of the land.

They granted an easement to Carroll Electric to clear and keep clear the right-of-way. The easement permitted the removal of trees and other obstacles outside of the right-of-way that were tall enough to interfere with transmission lines.

The landowner was concerned that the language in the easement contract seemed vague. The field service supervisor for Carroll Electric told the landowner that the language was in the easement contract so that Carroll Electric could “take danger trees.”

The landlord wanted this language removed. Carroll Electric’s representative would not do this but also said, “You have nothing to worry about.”

Carroll Electric’s design engineer had assured the landowner that the tree-clearing project could be done within 100 feet, the width of the right-of-way. Carroll Electric’s field service supervisor also told the landowner that if any damage occurred to landowner’s property beyond the right-of-way, then the landowner should “make a written claim to Carroll Electric and they would take care of restoring and repairing the damage.”

Without these promises, the landowner testified that she would not have signed the easement contract. The easement contract was one piece of paper. It guaranteed payment of $9,060 to the landowner for the easement.

The easement contract noted that logs would be left on the edge of the right-of-way for the landowner.

At trial, the Court received into evidence the one-page easement contract. It contained an additional hand-written note that stated: “Brush also to be left pushed off edge of right-of-way.”

Suzanne Bare testified at trial that she did not recognize the handwriting. She said the hand-written note was not on the easement contract when she signed it.

Carroll Electric’s field service supervisor testified that he added the hand-written note and it was on the easement before Suzanne Bare signed it.

The Southern District noted that the jury was entitled to believe or disbelief part or all of the testimony of any witness.

Steven Bare testified that he told Seven Valleys’ supervisor “not to clear anything wider than 100 feet.”

After the clearing crew had moved past the landowner’s property, the Bares went on an out-of-town trip. When they returned three days later, they discovered that a large area of their property had been bulldozed on what was previously a “fully wooded” section of their land.  In total, Seven Valleys’ work crew had removed 46 trees.

Contrary to the 100-foot limitation, Seven Valleys piled trees and lumber on the landowner’s property. Some of the trees had been placed on top of landowner’s fence, damaging the fence.  The landowner also discovered that other trees outside the boundary of the easement had been cut.

One of the issues on appeal was whether Carroll Electric controlled or had the right to control the activities of Seven Valleys. The appellate court noted that Seven Valleys’ contract permitted Carroll Electric to remove any employee of Seven Valleys. Carroll Electric could also force Seven Valleys to add employees to the project.

Further, Carroll Electric’s supervisor not only inspected Seven Valleys’ work, but he had the ability to correct work. The Southern District decided that there was substantial evidence supporting a finding that Carroll Electric’s control over Seven Valleys’ conduct “produced a trespass.”

The appellate court also considered whether the trial court errored by instructing the jury on punitive damages.

The Southern District concluded that the jury could reasonably find that Carroll Electric’s field service supervisor had added the hand-written note on the easement after it was signed by the landowner “to make it appear that the landowner had agreed to something that it had actually rejected.”

The Southern District further noted that he told Carroll Electric’s supervisor that he did not want any trees cleared beyond what they had agreed to in the easement. The supervisor replied that he would take any tree on landowner’s property that he wished.

With this evidence, the appellate court concluded that a reasonable juror could find that Carroll Electric’s conduct was outrageous by demonstrating a complete indifference to or a conscious disregard for landowner’s rights.

This is the legal standard to support an award of punitive damages under Missouri law. The Southern District, based on the standard and the evidence it considered, affirmed the award of punitive damages.

The Southern District also upheld the award of attorney fees pursuant to a Missouri statute. The statute provides that if a property owner prevails in an action for trespass against a rural electric cooperative, such property owner may be awarded reasonable attorneys’ fees, costs and expenses.

This statute also entitled the landowner to recover legal fees for the appeal including research in preparation of appellate briefs.

The appellate court sent the case back to the trial court to consider the reasonableness of the request for attorney fees and costs incurred by the appeal.

James R. Keller is counsel with Sandberg Phoenix & von Gontard P.C. where he concentrates his practice on construction law, complex business disputes, real estate and alternative dispute resolution. He also is an arbitrator and a mediator. Keller can be reached at (314) 446-4285 or jkeller@sandbergphoenix.com.

Five Essential Lessons to be Learned When It Goes Very, Very Wrong

in Columns/Technology
Joe Balsarotti

By JOE BALSAROTTI

As I write this column, my staff is in the fourth week of a nightmare scenario for a technology provider. One of our long-time vendors, who provided email and web hosting services, gave 30-day notice that the company was closing down. This followed a series of incidents in short succession of one client’s email being hacked, his tech making a grave error in an attempt to recover data and as a result, the destruction of a number of other clients’ data.

Luckily all but one client did get their data back, but significant downtime resulted for these businesses. Many of those affected by the shuttering of the vendor are our clients, but a number of them were not. Nevertheless, we offered to assist anyone who wanted help during the transition.

Through our industry associations, I’ve always kept a list of trusted colleagues who provide products and services that are complementary to ours. I’ve also kept a list of trusted colleagues who could act as a backup if we needed help. That planning paid off. We were able to work with a company who provided similar services and had the resources to be able to onboard those who were stranded in the digital sea before the looming deadline.

The process of switching all these companies over has been daunting. Each client’s setup is a little different. Some just use email, others depend upon their websites and many utilize both. This was about as close to a nightmare scenario as one can get, except that there was at least a month’s notice.

Working through all of this brought to light many important points.

First off, as we’ve covered before, do you own your data? A handful of the clients had their website created by that vendor and were never given access to it, nor were they given a copy of their data. Unfortunately, that means they will have to pay to have a new website designed for them. It’s not something they were expecting or budgeting for. And until the new site is completed, they don’t have a presence on the web.

Secondly, moving email providers is about the most labor-intensive project one can have. Someone has to touch not only every computer, but also every email and user account on each computer. Local data needs to be backed up, changes made, connections tested and data restored. With the volume of email some users keep, this can be a two- to three-hour process just for one account. Now multiply that by about 800 and you comprehend the scope of the task belonging not only to my team, but to the new datacenter and its staff as well.

We did our best to prioritize those who needed 24/7 access to their email, those who could do with checking through webmail during a transition and a select few who welcomed a day or two of digital peace and quiet.

“Always in motion, this project is,” paraphrasing Yoda. Like any major project your business takes on, making sure you’ve accounted for how much time is spent on each client is essential. With so many separate clients and each user needing attention, it’s easy to lose track as techs get sucked into a rabbit hole resolving one problem or another. Organization is key. Even if it starts to fail under the stress, at least there is a framework to keep the project moving forward.

The third point that reared its ugly head was documentation, or the complete lack of it at many clients. The vendor dealt with these clients directly. And although we often acted as a consultant or even a translator between them, we were not privy to the transactions between them. Many clients were sent scrambling to find account numbers, passwords and to track down who controlled (or even owned) domain names. Getting in contact with the website designers was nearly impossible, as many sites were old and their designers had long since moved on.

The fourth point brought to light was the lack of attention to websites. With only a handful of exceptions, all these clients’ sites were running drastically out-of-date software, security was nonexistent and the web designers who (as we’ve discussed in this column before) should have been doing ongoing maintenance on the sites, never even bothered to discuss it with the clients, let alone sell them on it. One of the affected sites was infected with a virus. As such, we could not download the client’s data because our security systems prevented it, as they should have. If we would have had another month to go through the process, we would have been able to save it, but the cost of cleaning and updating data just to be able to transfer it probably exceeds what designing from scratch would cost.

Lastly, misplaced trust in the cloud was amazing to me. As many times as we preach to clients that they must make backups, the number of businesses who made the faulty assumption that the vendor would have everything available forever – and they didn’t have to take any precautions themselves – was astonishing. The initial problem this vendor had was exasperated by a technician’s error, which then revealed that their assurances of data security were not as they had been portrayed.

The moral of this story – which continues to play out – is that with organization and a little planning, your business can survive a major disruption such as losing a key vendor. There will be a price to pay, however. Lost productivity, unforeseen costs and the potential of lost business are givens. How impactful this can be to your business comes down to how much time and effort you’ve put into being prepared.

Joe Balsarotti is president of Software To Go and is a 38-year veteran of the computer industry, reaching back to the days of the Apple II. He served three terms as chairman of the National Federation of Independent Business’ Missouri Leadership Council, as chairman of the Clayton, Missouri Merchant Association for a dozen years, chaired Region VII of the Federal Small Business Regulatory Fairness Board and currently serves on the Dealer Advisory Panel of the ASCII Group, an organization of nearly 1,200 independent computer and technology solution providers in North America. He can be reached at joe.balsarotti@software-to-go.com.

Five Must-Haves to Make Your Good Website into a Great Website

in Marketing
Stephanie Woodcock

By STEPHANIE WOODCOCK

Before we start with the list of must-haves for a good website, let me preface that first and foremost a website should be responsive and mobile friendly. Studies show that more than 50 percent of all websites and emails are opened on mobile devices; if your website is not responsive and mobile-friendly, stop reading now and find a web designer.

The next five points do not matter until you have a responsive site that people can read on their mobile devices. Take a look at your website using your smartphone. If the street address or services or pictures are illegible or too small, chances are it’s not mobile-friendly. You should not have to place your forefinger and thumb on the screen to enlarge the street address. A responsive site organizes the information on your website to best fit whatever screen on which it is displaying – desktop, smartphone or iPad.

Now we can begin. Here are five must-haves for a good, if not great, website:

1 – Multiple methods of contact easily visible and located in the expected places.

Potential customers are on your website – hooray – and obviously the next step is that you’d like to connect with them. Make this as simple for them as possible by making your phone number, address (linked and coded to map/directions) and email address easy to find. These items are standard in the footer and/or headers of a website, and this is where people will look for them, in addition to the “contact us” page of your website.

2 – Clear, concise content.

No one knows your industry like you. Now that I’ve landed on your website, please don’t bury me in industry jargon and terminology that I don’t understand. Your home page should be informative, concise and user-friendly. It should not be like reading IKEA directions (sorry, IKEA). You should be using layman terms to simply describe your product and services so that people feel like they can call you and have a conversation with you on their terms. Customers are not impressed by your wealth of knowledge and expertise in the field. They just want you to back up your work. They want to understand the gist of how you can help them and make their lives easier. Don’t be the hero in the story of what you do. Let your customers be the hero and you the guide.

3 – Unique, fresh content.

This is for all you Google-happy folks out there. Google crawls your page when new content is uploaded, hence the popularity of blogs on business websites. And Google is grading your content. Pencils down: Do your meta tags and keywords match your content? Is your content borrowed from another similar website? (That’s a big no-no.) Has your content been updated within the past 90 days? These three things heavily affect your search rankings. While many B2B companies in the construction industry don’t necessarily get their customers from Google searches, it is still important to remember and consider. Google is a giant with which to be reckoned. In order to play nice with Google, you need to have fresh, relevant content for your industry. A post once a month related to your services is a great place to start; this can easily be uploaded by office staff on the back end of a website built on a CMS (content management system) platform.

4 – Appropriate use of color and images.

I have seen many websites that look like a cookie cutter website with a logo attached. This is not a brand. This is a sad excuse for a website. Where is your identity? For what does your company stand? A branded website with strong sense of style, imagery and color helps set you apart from the competition and supports your sales effort by evoking a professional, signature brand. You don’t want to be known as the generic company that’s been around for a long time with that great salesperson. You want to be known for your brand. A brand can do a lot of things. It can make you look bigger than what you are. It can attract the right kind of customers. It can support a sales push. It can enhance work ethic of your company’s culture. A brand is so much more than looks, and it starts with your website. More so today than ever, a digital identity is crucial for brand success.

Lastly, and most importantly:

5 – A call to action.

You have a potential customer on your website! Now what? What do you want him or her to do next? Customers do not take action until they are challenged to take action. Unless we are bold in our calls to action, we will be ignored. We assume that we want them to buy from us, but that’s not correct. Customers have to be pushed into action. There is power in clarity. Make sure your site flows in a way that leads them to the action you want them to take, whether that is simply to learn more about your business or to pick up the phone and call you. Do you believe in your product? Customers aren’t looking for brands that are filled with doubt. They are looking for brands that have solutions to their problems. There are two kinds of calls to action: a direct call to action and a transitional call to action. For a good example of a direct call to action, go to the website of your favorite pizza chain. On the front page there is a call to action to get you to place an order such as pictures of delicious (albeit greasy) pizza. You’ll likely also find easy-to-click “order now” buttons. It will push you through the order, guide you step by step and try to upsell you soda and garlic bread.

As a brand, it’s our job to pursue our customers in a very similar fashion. We are the ones who need to take the initiative. Be bold and be direct when it comes to your website. State your purpose, have direction, include plenty of call to action buttons and methods to reach you, and support this clear messaging with a strong brand, logo, colors, imagery and easy navigation.

A good website can make or break a company. Let’s make yours.

Stephanie Woodcock is president of Seal the Deal Too, a St. Louis-based marketing, creative & communications firm. She can be reached at stephanie@sealthedealtoo.com.

Missouri Policymakers Sending Gas Tax Increase Prop to Nov. Ballot

in Homepage Primary/Opinion

By Kerry Smith, Editor – St. Louis Construction News & Review Magazine

Despite a session wrought with issues related to the state’s former chief executive, Missouri legislators concluded the regular session with a measure asking for a 2.5-cent increase in Missouri’s portion of the motor fuels tax.

Missouri Chamber of Commerce and Industry President Dan Mehan said transportation infrastructure funding policy jelled in the final days of the 2018 state legislative session.

“With two weeks left, nobody thought it was going to happen. With two days left, nobody thought it was going to happen,” said Mehan. “We ended up sending to the voters for this November a proposition that will ask for a 2.5-cent gas tax increase for each year over the next four years. Missouri currently pays 17 cents, so we’ll add 2.5 cents to that every year beginning in 2019 if voters approve it on November 6th. We’re very pleased with the outcome.”

The state has not seen a motor fuels tax increase since the 1990s, Mehan said, and it is sorely needed to maintain Missouri’s transportation infrastructure. Since that timeframe, 39 states have elected to raise their own state motor fuels user fees. If November’s proposition passes muster with Missouri voters, the state is projected to generate $240 million annually for the next four years to help fund roads, bridges and more.

“We’ve got the second- and third-largest rail terminals in the U.S. and the seventh-longest highway system in the U.S.,” Mehan said, “yet we’re 47th in the U.S. when it comes to transportation funding. That doesn’t make sense. For Missouri businesses, we view infrastructure as an asset that we need to invest in and continually make better.”

Mehan and others – including the U.S. Chamber of Commerce and the Associated General Contractors of America – agree that the motor fuels funding mechanism has to change in order for federal dollars, which comprise the bulk of the fuel tax, to keep pace with the need for new and improved roads, bridges, rail and mass transit nationwide.

In January, the U.S. Chamber proposed a 25-cent increase to the federal portion of the motor fuels tax. President Donald Trump endorsed the proposal a month later.

According to the U.S. Chamber, inflation has eroded nearly 40 percent of the value of the user fee since it was last raised in 1993. Continual improvement in fuel efficiency equates to more drivers driving vehicles more on less fuel. The federal Highway Trust Fund, the fund fed by 18.4 cents per gallon of gas and 24.4 cents per gallon of diesel fuel, is in the red and projected to become insolvent within the next two years. Fixing America’s Surface Transportation Act (known as the FAST Act), a four-year transportation infrastructure-funding program, will expire in 2020; a portion of that act has been propping up the long-ailing Highway Trust Fund.

Sean O’Neill, vice president of congressional relations for the Associated General Contractors of America, said the AGC and its fellow stakeholders stand in support of the U.S. Chamber’s proposed 25-cent increase.

“We see an increase in the motor fuels tax to be the answer, at least in the short term, to address the long-term solvency of the Highway Trust Fund,” O’Neill said. “We understand that it has some political hurdles to get over, but we see a gas tax to be the most efficient way to do what we need to do to invest in our aging transportation infrastructure. Since 2013, at least 26 states have increased taxes or fees dedicated to funding infrastructure. States – Missouri among them – are doing what they can do, but it’s up to the federal government to make sure the funding mechanisms are relevant as fuel efficiency continues to increase.”

In Illinois, a proposal is afoot to more than double that state’s portion of the motor fuels tax. The Illinois Economic Policy Institute is recommending a hefty increase from the current 34 cents to 85 cents. The measure has met with fierce resistance from organizations including the national Tax Foundation.

Construction Industry Awaits Passage of Prevailing Wage Compromise

in Associations/Columns/News/Opinion

By Kerry Smith, Editor – St. Louis Construction News & Review Magazine

The Missouri Senate and House have passed legislation to modify the state’s prevailing wage law. Unless vetoed by a sitting Missouri governor, HB 1729 will become law and take effect in August, changing and simplifying the way wages are calculated for public works projects – and putting increased onus on contractors and subs to report their hours to the state.

School districts, cities and other governmental entities currently pay more than the state’s minimum wage for maintenance and construction work. As it now stands, the specific amount is determined by the type of work being done as well as the geographical location of the construction project, and there is no minimum threshold for the amount/size of project to which prevailing wage applies.

The bill also signifies a compromise in how prevailing wage will be calculated in rural areas of Missouri. HB 1729 also raises the construction cost threshold that construction projects must reach in order for contractors to be paid prevailing wage.

A consolidation of job classifications in the construction industry is yet another component of the proposed law, according to Associated General Contractors of Missouri (AGCMO) President Len Toenjes.

“This was a real team effort that included members from across our industry,” Toenjes said. “We had been preparing this compromise with the hope that when those (repeal) bills got to the floor, our legislation would be seen as a substitute for the repeal of prevailing wage law in Missouri. We have every reason to expect that the governor will sign it. The feedback that I’m hearing is that we stopped repeal of prevailing wage, which was our overall goal. This is a situation, as with any piece of legislation, where everyone is a little bit unhappy. But we were able to reach a point where we stopped the repeal and we did not negotiate against ourselves. We were realistic and honest in reaching this compromise.”

A key provision of HB 1729 is that it establishes $75,000 as the threshold or minimum project amount that is subject to prevailing wage rates. According to Toenjes, earlier bills advocated for a threshold as high as $500,000. “Under the current prevailing wage law, prevailing wage rates apply to projects from the first dollar on up,” he said. “There was a lot of back and forth debate on what this number should be. Particularly for construction projects occurring in rural areas – such as painting a classroom ceiling or installing a suspended ceiling in a firehouse – that project total is going to total less than $75,000. This threshold is not making rural areas happy, but we knew that ultimately we weren’t going to be able to keep it at zero.”

Increased responsibility for contractors and subcontractors to report their hours to the appropriate departments with the Missouri Dept. of Labor is a provision of the legislation. “Prevailing wage calculations under the new bill will be done solely on the basis of the hours reported to the state by these parties,” Toenjes said. “It’s critical that contractors report their work hours to the state because by law these hours cannot be reported by the unions or associations. The onus is definitely on the contractors and subs.”

In a related component of HB 1729, the number of occupational titles has been reduced to simplify calculating and tallying prevailing wage rates by position within employment sectors. “One of the things the House and Senate wanted to accomplish was to co-simplify the reporting system,” Toenjes said. “We went from 43 occupational titles down to 20.”

For example, where there had been three or four different related occupational classifications for jobs specific to millwrights and carpenters, and multiple categories for laborers, HB 1729 combines several related job classifications for simplicity and fairness.

“Prevailing wage calculations for each county and each occupational classification are going to be based on an average of all the hours that are reported for that occupational classification within the county,” Toenjes said. “If there are fewer than 1,000 hours reported (for a classification and/or a county, there will be a minimum construction wage that represents the average of all the wages reported in that county. The rationale of those who designed this provision is that it establishes construction wages that are consistent with a level of activity occurring in that county.” Prior to the new legislation, Toenjes said it had been a negotiated rate and that wages paid weren’t always reflective of the construction activity that was occurring.

The AGCMO’s next objective is to ensure that the new prevailing wage law, assuming it passes, succeeds in being implemented. “We want to see that it hopefully results in the promulgation of a system that is as fair as possible for everyone concerned, particularly for those who work in construction in rural areas of Missouri,” said Toenjes.

 

Missouri Legislators Reduce Cap on Historic Tax Credits for Developers

in Columns/News/Opinion

By KERRY SMITH, Editor, St. Louis Construction News & Review Magazine 

The Missouri General Assembly ended May 18 with passage of legislation that reduces the state’s historic tax credit program’s annual cap, requires developers to go through more hoops and arguably opens the process up to some arbitrary judgment as to which projects receive these incentives.

Spencer Fane Partner and Tax Credit Group Chairman Shawn Whitney said last Friday’s vote to cut the cap from $140 million to $90 million was somewhat predictable, despite ardent lobbying from the law firm, real estate investors, developers and Historic Revitalization, the nonprofit organization dedicated to revitalizing urban areas including downtown St. Louis. Whitney said the details of SB 590 remain to be discovered. The law takes effect July 1.

State historic tax credits are a valuable economic stimulus tool, according to Whitney, because they require four dollars in private equity before any one dollar’s worth of credit is awarded. HTCs spur economic activity, jobs and overall investment in restoring and redeveloping long-neglected urban areas, he said.

“We’d spent a lot of time hoping to get enough no votes so that Senate Bill 590 wouldn’t pass and that the historic tax credit program in Missouri wouldn’t be modified,” said Whitney, “but toward the close of regular session, it became a mitigation issue. The devil’s in the details, for sure. We’re working with our state legislators to really define what the law means,” he added.

Prior to last week’s passage of SB 590, Missouri’s total annual allotment of historic tax credit dollars was $140 million. While for many years that was ample, Whitney said, in 2017 Missouri exceeded the cap.

“SB 590 reduces the annual cap to $90 million,” he said. “The law does allocate an additional $30 million for high-poverty urban areas, those which qualify under the U.S. Census Bureau’s definition of qualified census tracts wherein at least 20 percent of residents are at the poverty level. That’s a really good provision. But in terms of the annual cap, we feel like we’re going to hit that $120 million number annually.”

More troublesome than the increased annual cap on Missouri’s historic tax credit incentives is the increased degree of subjective input SB 590 allows, according to Whitney. The Missouri Department of Economic Development now has heightened authority over who receives the incentive, as do elected officials whose districts and towns are applying for the state-funded credits.

“Getting through the cost certification process at the end of the development project is already difficult,” he said. “We’ve had projects in Missouri where the respective economic development departments approved our structure at the start of the venture but later changed their minds during the approval process. The entire process is pretty arbitrary, when what a historic preservation and development project really needs is reliability and consistency.”

Each project applying for Missouri historic tax credits is required to go through a net fiscal benefit review, according to Spencer Fane – one that is not yet defined within the new law. “We think that’s troublesome,” said Whitney. “There is a lot of ambiguity in the term ‘quality’ as it pertains to project development,” he said. “Quality truly is in the eye of the beholder. Another section of the new law that concerns us greatly is that input by local officials as to the importance of their proposed project – in whose district the proposed project is located – will now be afforded greater influence. Prior to the passage of SB 590, historic tax credits were by right, meaning that if your project was on the National Register of Historic Places and you rehabbed the building in accordance with the Secretary of the (U.S. Department of the) Interior’s standards for redevelopment, the historic tax credits were guaranteed. The type of language contained in this new law lends itself to what we dealt with in the affordable housing issues years ago,” he added.

Another new requirement in SB 590 is that developers must submit evidence of the capacity of the development to finance costs for rehabilitating the property. “Especially when you’re dealing with a reduced (HTC) cap, it’s difficult for the (development) industry as a whole,” Whitney said. “Due to the increased cost and risk level of historic redevelopment projects, often more projects are attempted than succeed. A couple of current (St. Louis-area) projects that received HTCs have not been able to move forward, yet those historic tax credits aren’t able to be allocated to other rehab efforts in a timely manner. It can truly be a chicken-and-egg issue.”

SB 590 also requires qualifying development projects to commence within nine months of being awarded historic tax credits, rather than over a two-year period as had been in existence prior. “What you’re likely going to see are more shovel-ready projects,” Whitney said. “Developers are going to have to spend a little more money preparing their project to obtain commitments from lenders and tax credit investors, but we think we can work through it. We’ll see as the marketplace plays out. SB 590 doesn’t contain any provisions that should impact the pricing.”

In contrast, he added, the federal tax credit provision – which now allocates a 20 percent credit over five years – may impact pricing, with investors often lowering their investments in qualifying rehab projects by 10 cents to 12 cents on the dollar.

“Having represented developers for nearly 20 years, I can attest to the fact that they’re an adaptable bunch,” said Whitney. “So long as Missouri historic tax credit issuance doesn’t become a political and arbitrary process, developers in St. Louis and across Missouri should be able to adapt.”

 

 

Planning Firms to Redevelop Washington Avenue Garment District into ‘Modern Epicenter of the Creative Economy’

in Columns/News/Opinion

By KERRY SMITH, Editor, St. Louis Construction News & Review Magazine

St. Louis’ Historic Garment District got a boost May 25 with city and nonprofit leaders announcing the next phase in this long-term, comprehensive redevelopment effort.

The east-west stretch along Washington Avenue from 18th Street to Tucker Boulevard was once among the largest U.S. clothing manufacturing hubs, second only to New York City. From the late 1800s to the early 1920s, revival-style buildings – designed by greats including Theodore Link and Albert Groves – bustled with activity in the manufacturing of domestic garments and related accessories. Post-World War II, a decline in garment production in St. Louis and elsewhere manifested in a series of vacant, multi-story, brick and stone buildings. Redevelopment so far in the district has included dining and entertainment venues as well as residential living options.

But thanks to 20 years of effort driven by what today is known as Downtown STL Inc., more than $6 million in public and private investment has been pumped into the Garment District and nearly all the buildings are occupied. The latest historic redevelopments include Paric Corp.’s restoration of the former CPI headquarters at 1706 Washington into Monogram – an urban living development – and Paric’s work-in-progress to repurpose the historic International Shoe Building at 1501 Washington into a shoe-themed boutique hotel known as Last Hotel. Together the two projects approach $100 million in development.

The State of Missouri’s adoption in 1998 of a tax credit for the redevelopment of historic buildings spurred the rehabilitation of large-scale renovation projects along the Washington Avenue corridor.

At Tuesday’s press conference, leaders from St. Louis City, Downtown STL and the Saint Louis Fashion Fund announced the city’s selection of New York-based Martinez+Johnson Architecture PC and development consultant BJH Advisors LLC as its choice to partner with St. Louis-based TAO + LEE Associates Inc. in leading efforts to continue rejuvenating the district in a plan that engages residents and businesses in the process. Downtown St. Louis Community Improvement District is funding $100,000 toward the planning and design work.

“Community engagement begins today,” said Missy Kelley, president of Downtown STL Inc. “Since 1998, more than 20 buildings here have been rehabbed, resulting in more than 700 new apartments and condominiums. And in terms of infrastructure, significant streetscape improvements along Washington Avenue have also been made.”

Once Monogram and Last Hotel are completed, Kelley added, all major buildings along Washington Avenue in the Garment District would tout redeveloped/occupied upper floors.

Linda Martínez, St. Louis deputy mayor for development, said the collaborative design venture is being propelled by a doable funding mechanism paired with a spirit of public involvement. “This is really about jobs and about the restoration of what was once a very vibrant area of downtown,” Martínez said. “This is not merely a plan. This is going to be a reality in the near future.”

Steven Stainbrook, associate principal and director of planning at Martinez+Johnson, said project partners are working to leverage the existing successes of the Garment District’s status within the Washington Avenue Historic District on the National Register of Historic Places to attract additional investment. “We want the Garment District to be a place where creative people want to be,” said Stainbrook. “We’re not here to start over. We’re here to continue the work that has already been done and to infuse fresh energy that coalesces around a vision. If we get this right in parallel with smart policy initiatives that build on the recent successes of the fashion incubator (Saint Louis Fashion Fund) and support development of a broader ecosystem of creative industries, we will have laid the groundwork for transforming this neighborhood.”

Martinez+Johnson was also part of the team that recently led the revitalization of New York’s garment district.

Peter Tao, principal of TAO + LEE commended the study that will gather public input for what the rehabilitated district will look like. “With so much construction activity and development in and around downtown, and with the near completion of the network of new and improved public parks, it is exciting to envision what the role of this district can be to enhance the area,” said Tao. “This placemaking planning study is very timely.”

Spring and Summer Selling: Make the Effort to Attend Prospect-Laden Events

in Columns/Sales
Tom Woodcock

By TOM WOODCOCK

Money is being spent in all directions to try and to gain an advantage in sales. Websites, digital campaigns, graphics, giveaways and promotional materials grab the lion’s share of the attention. Though these are, (add comma) at times, (add comma)  necessary, hoping these pieces will suffice, (remove comma) as your sales effort is overly optimistic. Still the most effective methodology is to get in front of people. But how?

There is a definite divide developing between those who hide behind marketing and promotion with those who use it to increase their opportunity to get around people. I really believe in some of the old, traditional, people-centric gathering functions. The difference is that I’ve always had a plan of attack for these events. What events?

Two of the most common, as well as the most effective, are associations and trade shows. I know. They’ve both been around forever. There is a reason for that. They’re effective. When worked properly, they serve as a great point of access to customers and potential customers. When I do seminars, I usually ask this question: “How many of you have to deal with a person when getting a project or making a sale?” Guess what? I usually get a 100 percent positive response. We all have to deal with people to get our opportunities.

The question is this: How can we maximize the effectiveness of attending these events? First of all, when it comes to associations, it’s critical that you select a couple active associations that are successful in bringing people together or are customer-rich environments. The more people in attendance, the greater the chance you’ll either secure a good piece of sales information or a direct opportunity with a potential customer.

Secondly, you have to dive in. Arrive early and review the nametags to see who’s coming. Stay late and milk it for all it’s worth.

Lastly, get involved. Committees, boards and volunteering for events put you in the limelight. It gives members a chance to seek you out for your ability to connect them within the association. I practice this firsthand. It really doesn’t matter if you feel awkward. Things will get comfortable as you move along. Go with the purpose of meeting people, as opposed to sitting back and criticizing those who are. There is an old saying in the association world: “You get out of it what you put in,” and it holds true.

Another misunderstood event are trade shows. They have been around since the dawn of time, it seems. Trade shows sometimes draw large crowds, sometimes not. They always involve people. Yes, it’s good to see new products and services at these events. You may even grab a great seminar. (I do a ton of them at trade shows!) The greatest value, in my opinion, comes from the people who are in attendance.

If it’s a customer-rich environment, you need to attend with the intent of making some connections. Introduce yourself during booth visits or at breaks in the seminar programs. Go with the purpose of walking away with at least three solid connections. Plan your attack, have your business cards accessible and bring a tool to jot down notes. Planning ahead will take your experience to a new level. I’m often amazed how one person can attend or work a trade show and say it’s a flop while another individual attended the exact same show and found it to be a tremendous success. It seems that perspective and attitude play a huge role with regards to results.

Lastly, there are business breakfast meetings, networking happy hours and luncheons popping up everywhere. They are worth the time if you qualify them first. Who is putting it on? From industry is the host? Are the times and locations generally convenient? If so, they’ll probably have higher attendance. Taking the time to include these opportunities in your event repertoire can produce significant results. With the weather improving, golf tournaments and barbecues pop up. Worked correctly, they can be big lead sources.

But all of this is useless if you don’t follow up on the information you secure from these networking opportunities. This is the biggest issue I find when training sales reps; they’re great at the event but then they never call their newfound contacts or take the next step. A lead is only effective when it is worked. Most leads go dead in 48 hours as people move on to new ventures.

Set aside a specific time to sit and make those follow-up calls. This takes discipline and few really take the time to pick up the phone. Most good sales people love the fact that so few individuals actually do follow up because it allows them to stand out that much more. It’s always easy to discount going to people-connecting events, believing they’re not worth the time or inconvenience. The highest percentage of people uses these excuses to bypass being involved. Sadly, this is a critical sales mistake. Easy to make, but just as easy to rectify.

I know that not every meeting or show is going to be a premium event, but you need to stay out there to catch the ones that are. Join the associations. Get to the meetings. Attend the trade shows and meet people.

This isn’t the most complicated of concepts. The biggest issue is making the time. If it’s a priority, you’ll make the time. The percentage of sales agents who do is woefully low. Getting around people is still a big lead producer. Finding events where people are congregating is critical. Surprisingly, if you put a real sales effort towards them, you’ll meet a ton of people. I highly recommend having a good schedule of people-laden events on your calendar. There you’ll meet someone who will be of value to your business. The strong ones tend to be strategically involved in your business transactions.

Tom Woodcock, president, seal the deal, is a speaker and trainer for the construction industry nationwide. He can be reached at (314) 775-9217 or admin@tomwoodcocksealthedeal.com.

Help Customers Learn How to Buy From You: Let Them Play the Hero

in Columns/Marketing/Sales
Stephanie Woodcock

By STEPHANIE WOODCOCK

When a company decides to amp up its marketing, the natural tendency is to tell everyone how great it is. We assume that if we make the marketing good enough and explain better than our competitors how great we are, our prospects will come running to buy our services and confirm our greatness.

I meet many talented professionals who work for trusted, experienced and longstanding companies. Immediately when I ask them about what they want to tell their customers, they come up with a list of comparisons. “Well, we do this and they don’t do that. We’re the best at this or that, we do this faster, they don’t have this software,” etc. Some just come out and say they are the lowest priced and that’s their selling point. I’ve seen quite a few companies even insist on putting these bullet points on the back of their business cards, lest we forget. (Please don’t do that.)

How do we get more business? The default is to tell the customer base what it is missing. This is especially the case if said company has been doing this for a long time. Company personnel state, “Well we’ve been in business for X number of years. We’re a family-owned business. We don’t gouge our customers. We strive for customer satisfaction. We have the best people.” While all this may be true, it is not where you start with your marketing plan; this becomes white noise in the world of marketing.

The harsh reality is that customers don’t really care about your business beyond how it can help them. How do your business offerings solve a problem and make life better for your clients? These are the questions we should be asking in strategic marketing planning sessions. How can we make the customer the hero, someone who is admired for great acts or fine qualities? What qualities about our customers do we want to highlight? What do we do that could make our customers’ acts great?

It’s a shift in messaging. But, when companies do it right, it’s powerful messaging that cuts through the rest of the “look at me” marketing. Our brand will grow when we define a desire for our customers. People want to hear about themselves, not about inanimate objects such as services, software or years in business. They want a story, and they want to be at the center of it. Great marketing tells a story and places the customer squarely in the middle of that story.

Have you ever been told, “Wow, that person is a great conversationalist”? Have you ever left a meet-and-greet thinking, “Wow, I really liked that person. I enjoyed that conversation.” That’s usually because that person asked a lot of questions about YOU.  You probably did most of the talking (no offense). You felt needed and heard. You got to talk about yourself, and you were listened to. Shocking, right?

The same interpersonal skills can be applied to a company’s marketing strategy.  We want our customers to feel needed and heard. We want them to want to come back –not because they are convinced that we are the best due to our fantastic marketing efforts (“We are the best! We are the best!”), but because of how we framed our branding message to help them understand the needs they have and the solutions we can provide.

One of my client’s main marketing objectives was to increase online sales and get customers set up with unique online profiles. This required a couple of steps and a learning process. Rather than telling customers how great the system was (“You must join, even if you aren’t a techie! You have to figure it out and join. Look what you are missing!), we created a digital assistant who both entertains and guides. We named her, gave her a personality and brand and set up contests. But most importantly, we found a way to find a need the customer had and kindly guided him/her through a process to fill that need. In essence, we showed people how some needs they had could be filled and solved by following these simple steps. Once a customer set himself/herself up with a unique online profile, he/she realized how convenient and quick the system was for ordering, checking inventory and more. We made the customer’s acts great by saving him/her time and hassle. Thus, the customer became the hero. He/she conquered his/her digital fears, completed his/her tasks, and had extra time for other parts of his/her job.

In any good story there is a hero, a villain and a guide. In business, the villain is the problem our customers face. Rather than our being the hero who swoops in and delivers a great product or service, let’s let our customers be the heroes who use us as the guide to a solution. We still have a great product and service. Rather than singing praises to the product’s or service’s greatness and longevity, let’s frame these great products and services in a way that helps the market understand a need and a solution. As a guide we can shed light on a new way of doing things that could make the lives of our customers easier and more enjoyable. Rather than trying to be admired through our marketing efforts, let’s try to shine the light on those who keep us in business.

Stephanie Woodcock is president of Seal the Deal Too, a St. Louis-based marketing, creative & communications firm. She can be reached at stephanie@sealthedealtoo.com.

The Epic Fails of Sales: Eat Your Sales Strategy Veggies or No Dessert for You

in Columns/Sales
Tom Woodcock

By Tom WOODCOCK

After 30 years of selling, managing sales efforts, creating sales strategies and working in sales consulting, I may have a couple things narrowed down. People love to corner me and ask me their biggest sales question, waiting for a pearl of wisdom.

The one thing about pearls is that they take a long time to form. I’ve witnessed virtually every sales technique and gimmick known to man. I often chuckle when a young, newly college-educated star gives me the inside scoop on how sales works in this day and age. I love their zeal, but I saw that back in 1982, my friend.

Everyone is looking for a new angle to avoid doing the tough stuff, trying to reduce personal contact and get greater results. Kind of sounds like an oxymoron (or just moronic). Apps, social media and website innovation can all replace genuine sales work, I’m told. Technology makes it so easy for the customer to do business with you. Well then, they just have to, right?

Not so fast, Padawan! We are still human, the last time I checked. We are communicators by nature. We still like to talk to people we like…some more than others, but we all do. Companies spend gobs of money on methods they are sure will work, or are told will work, only to remain exactly where they are with regard to revenue and profitability. Why is that? My Facebook page is killer and I have a gazillion likes! I’m number two on Google under my trade! I even Instagram all my projects! Plus, you should see my website. Then thud. Same old, same old. Here are the most common errors I see:

  • Saying, Not Doing – Yeah, this is number one. Many people talk a good game but few enact the techniques necessary that develop into action. They don’t see people, make the phone calls, follow up, join associations, create a sales strategy or properly negotiate. They usually revert to selling by price. They’ll often talk a good game but they have no game. Sad but true. The easiest step of doing what you know to do is skipped.
  • No Plan – Could you imagine building a facility without a plan? Well, how can you build an effective sales effort without one? I mean, where are you going to go? Who are you going to talk to? What are your goals? How will you attain them? Where do you need to improve? These are not easy questions for many to answer. Many owners and reps I meet with have an epiphany when I discuss developing a sales plan. I feel like a genius, when in reality this is 101 to an effective sales effort. So if steps one and two are missed, good luck! Throw that dart into the ocean and hope you hit a fish. Better yet, bid until your little estimator brain falls out on the floor and dies a slow death. Estimating is not sales. Discounting is not selling. Giving away the house is not business development. Having a sales plan can eliminate the pricing game.
  • No Competitive Difference – If you’ve ever been to one of my seminars, which I’m sure you have (wink wink), you know this is foundational to everything I teach. If I’ve trained you one on one, you’ve seen me with a blue face because I’ve told you this until that occurs. If you do not give me, the prospect, a reason to choose you over a competitor, why would I spend more to choose you? Even if you were the same price, why choose you? Why would I change from my current supplier I trust and choose you? This is the baseline, folks. You first must know what makes you the better choice, and then know how to communicate that effectively. Low price is not a competitive difference; it’s simply math. Any caveman or cavewoman can lower their price. My five-year-old is at this stage in his mathematical skills. “If I charge $3 but the other guy is charging $2, if I go to $1.50, can I have the job?” Find out what makes you different from the competitor and sell it.

Those are only three of the common errors, but they definitely occur the most often. Lord knows, I try to convince thousands of construction industry professionals of these truths. Some have heard it over and over again, but to no avail. I regularly get asked to speak on sales at events and privately to companies. They’ll bring me back multiple times over the years and ask if I have something new. In actuality, they need to hear this stuff again…and again…and again. I still see these same mistakes made everyday, but now with new techniques. Facebook pages that say the same things as their competitor’s page. Social media posts saying exactly the same things. Websites that are merely plug and play templates because the businesses are plug and play. Yikes. New formats, but the same gruel served up only microwaved.

As companies come into the new construction season, they’ll scramble to spend marketing dollars to get attention. Not that they shouldn’t, but to what sales effort are these efforts attached? What’s the plan to capitalize on the interest created? Is there a clear separation defined? Will the sales effort and follow up be done or merely talked about?

It’s tough to be the person who has to tell a company that just dropped $20k on a website that it’s meaningless if they don’t have a detailed sales strategy. It doesn’t always get me an invite to the company BBQ.

There is no denying that if you eat your sales vegetables, dessert will soon follow. Companies love when revenues and profits increase but struggle to format a way to achieve that end. Regardless of the fact, it’s there for the taking. If you sell properly, it’s all low-hanging fruit!

Tom Woodcock, president, seal the deal, is a speaker and trainer for the construction industry nationwide. He can be reached at 314-775-9217 or admin@tomwoodcocksealthedeal.com.

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