The single best way to remove St. Augustine grass is to dig it out. You do not need to add any soil just lots of organic matter, once the grass is removed. Organic matter and the soil you currently have will be the best soil you could provide for any plant.

Is the root flare exposed on the crepe myrtle?

Many times, crepes are planted too deeply;
you should be able to see a definite flare at the bottom.

If it looks like a telephone pole stuck in the ground, it's planted too deeply.

Over-watering is unhealthy, too;
crepes like it on the dry side.

Best luck.

Thanks for your prompt replies and good advice. No, it doesn't appear to be planted too deeply. This year was an unusually wet year ...lots of rain all Spring and Summer so maybe that is part of the problem.
The leaves on the CM came out red this Spring and has remained that way. The nursery where I bought it advised me put a cup of Epson Salts around the base of the plant and water it in good. I was told it had a magnesium deficiency. I did that a couple of times over the summer but leaves are still red. It has some blooms but since they are red, they hardly show up. I paid big bucks for this one and the little cheapies I got at Lowes are healthy and blooming like mad. Any more ideas?

Usually the leaves are red when they first emerge (new leaves).

Have you seen any leaves on the ground?
I'm thinking maybe the mature green leaves are falling for some reason, & the crepe is still putting out new growth.

Neil Sperry is a big crepe myrtle afficianado;
you might check out his website.

Best luck!

Rather than a Magnesium deficiency you most likely have a soil nutrient imbalance that is preventing the tree from uptaking necessary nutrients in the quantity it needs. The only way to know if your soil really has a magnesium deficiency or an imbalance is with a good, reliable soil test. If the soil pH is out of whack that could prevent nutrient uptake as well. Keep in mind that Epsom Salts (Magnesium Sulfate) are very water soluble and unless you have adequate levels of organic matter in the soil to hold those nitrients they will simply flow with the water on out of your soil.
An example of improper feeding of plants would be those that apply Iron because of leaf chlorosis when the real problen is the soils pH, or some other nutrient deficency that also causes chlorosis.