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Slay Vetoes ‘CID’ for Lindell Market Place

April 10, 2008 THF Realty Watch 14 Comments

Per Joe Whittington of the Post-Dispatch: Mayor Slay vetoed a bill passed by the board of Aldermen that would have created a “CID” (Community Improvement District) for the Lindell Market Place strip center which includes a Schnuck’s store.  The center is owned and managed by THF Realty.  THF is owned by heirs of the Walton family.

The article wasn’t clear on the reasons but Ald Terry Kennedy (D-18) asked the Mayor to veto his own bill.  Maybe he realized using increased sales taxes to fund a face lift on the center owned by a wealthy developer wasn’t good public policy?

From THF’s website:

THF Realty owns and operates a large portfolio of neighborhood and community shopping centers, as well as several office buildings. We manage 100 properties comprising more than 20 million square feet of leaseable area in 23 states.

Wealthy owners with massive real estate holdings and they need sales taxes to fund a face lift on their own property?  Please.

 

Currently there are "14 comments" on this Article:

  1. LisaS says:

    Apparently (according the the West End Word) THF hadn’t asked their tenants about it, including Schnucks. We won’t mention the taxpayers ….

    [slp — yeah scary that such a bill could get all the way through the Board of Aldermen without the impacted businesses being aware.   Did Schnuck’s pressure anyone to get the bill vetoed?]

     
  2. LisaS says:

    Not just the businesses–there was no press coverage either! The Word picked it up on Third Reading. It was approved the same day most of us heard about it. I don’t know what pressure was brought to bear … we’ll just have to guess, won’t we?
    .
    You know, it’s a difficult position all the way around: I don’t shop that Schnucks often because it’s filthy and crowded, all the time; I know others who avoid it because of the aggressive homeless guys in the parking lot. It’s showing the effects of shoddy construction and age. I know the landlord would have a hard time raising rates to cover improvements, and the retailers would have to eat it to remain competitive …. and we have this ugly hole in the urban fabric from Vandeventer to Boyle.
    .
    Speaking of which, what’s your thought on the San Luis demolition/parking lot?

     
  3. Jim Zavist says:

    I don’t blame the owner/developer for asking. I do totally blame Ald. Kennedy for both agreeing to carry the bill and to not understanding what’s in it! Basic competence should be the minimum standard for being elected to public office . . .

     
  4. Adam says:

    “I don’t blame the owner/developer for asking.”
    .
    i do. it may be “good business” but ethics-wise it’s total crap.

     
  5. jbz says:

    Where are we when THF pulls out because of not getting the TIF? Yes, they are very wealthy but understand that any prudent business person treats each project as if it is on it’s own. Don’t get me wrong, the morality of doing such a thing is questionable but unfortunately we do not live in a utopia. Maybe THF stands for “Tax Haven Financing”?

     
  6. Jim Zavist says:

    The developer asks because too many other developers have already been given public money – he’s not the bad guy. It would not make good business sense not to ask – it would mean leaving money on the table, and the whole reason for being in the development game is to make money. It’s also not unethical to ask, any more than it is to take advantage of everything allowed in the zoning code or by taking advantage of the tax code to structure your business entity.
    .
    The crap part of the equation comes into play when the public sector agrees to ever-increasing subsidies that do nothing other than line a developer’s pockets. Yes, there are times when subsidies are needed and appropriate. But too many times, especially around here, the threshold for “assistance” seems to be set way too low. Government’s role is not to minimize risk, it’s to leverage limited resources to provide greater benefits to all its citizens. We need to look at the total package – incentives given versus actual returns generated, not smoke and mirrors.
    .
    The case here deals with basic maintenance. The owner has a shopping center with decent occupancy levels. There’s no reason why he or she can’t be funding both maintenance and infrastructure improvemants out of current cash flow. Would a special tax district make it easier? Certainly. But the cash flow is already there – deal with it! There is no impending new development that would create new competition, so any improvements will yield only marginal gains in tax revenues. Bottom line, keep the public sector out of private maintenance issues!

     
  7. john says:

    The habit of begging to the government trough has a long history here. As stated before, even Clayton now offers TIFs in order “to be competitive”. The downward spiral is well established and even Gateway Contractors is in on the action.

     
  8. Jim Zavist says:

    Just say NO! . . . it’s gott start somewhere and sometime soon . . . it’s simply not sustainable!

     
  9. rl'e says:

    Just some information on CID’s that I am providing off the top of my head but would be happy to e-mail the documentation during the week to anybody who wants it…

    Typically a CID is formed to help provide a number of improvements to a designated area. Local CID’s include: Downtown St. Louis and South Grand Avenue.

    A CID cannot be approved without a majority of the property owners so even if a legislative body such as the St. Louis Board of Aldermen approved the CID at their level the plan then goes to the property owners for approval. If there are registered voters living in the area they get to vote, too and if they don’t approve it, it won’t happen. At this writing I cannot tell you how the difference between the residents voting and the property owners voting is determined but I have it documented somewhere!

    A CID is required to clearly list the following:

    1. The assessment that is going to raise the funds (is it a sales tax, property assessment, etc…there are several options) and the amount. Once the amount is approved that stays in place and runs the life of the CID plan.

    2. The designated boundaries of the area.

    3. A plan (anywhere from 5 or more years) clearly defining the permitted uses of the funds being raised through the assessment.

    4. A board is appointed to run the CID and would be a board of property owners and I believe it is 5, possibly 7 people.

    5. The funding can be used to pay for streetscape improvements, capital improvements, advertising, security, etc…
    not going to private property development.

    In a nutshell, the CID does just not happen and you (a merchant or property owner or resident) wake up one day and find you are paying into it.

    A CID helps an entire group of people or an area not just one developer.

    If you look at what is going on in Downtown St. Louis or South Grand, a lot of that would not have happened without a CID.

    I do also believe that there is now one in place in the Grove area and it will be interesting to see how it helps that area develop, especially with the proliferation of businesses that are going to need parking and the street improvements that are sorely needed.

    In a place like St. Louis City and some of the other aging areas around the region, a CID or SBD (Special Business District) is a resource that provides needed improvements that the municipality would not otherwise be able to provide. It is kind of like Forest Park rotting away before Forest Park Forever came along… the City just does not have the resources to keep up with needed improvements, so these tools are really necessary.

    RL’E

     
  10. Jim Zavist says:

    rl’e – But in this case, the CID would have applied to just one owner, which is what made it seem so strange and unable to pass the smell test . . .

     
  11. Adam says:

    “The developer asks because too many other developers have already been given public money – he’s not the bad guy. It would not make good business sense not to ask – it would mean leaving money on the table, and the whole reason for being in the development game is to make money. It’s also not unethical to ask, any more than it is to take advantage of everything allowed in the zoning code or by taking advantage of the tax code to structure your business entity.”
    .
    sorry, but i have to disagree. you’re dissociating the practice from the practitioner (which is, of course, the genious of the business “entity”). “because too many other developers have already been given public money” does not justify THIS developer seeking public money – it’s like that old bridge adage … here’s my problem: “the whole reason for being in the [business] game is to make money” … to what end and at whose expense?
    .
    “…any more than it is to take advantage of everything allowed in the zoning code…”
    .
    not sure what you mean by this.
    .
    “…or by taking advantage of the tax code to structure your business entity.”
    .
    i’d say this verges on – if not crosses into – unethical behavior.

     
  12. Jim Zavist says:

    Adam, I think we’re going to have to agree to disagree. Breaking the law is wrong, whether it’s exceeding what’s allowed under existing zoning regulations or committing fraud. Pushing the limits/working inside the law, however, is legal. It may not fit your definition of what’s “right” or “moral”, but it is legal. And as I’ve said before, if you don’t like the law, change the law, but don’t blame the people who “take advantage” of it.
    .
    Our problem, as a city, is that we’ve devolved to the point where it seems like every development project receives some sort of government incentive. I don’t support the attitude and I have serious questions about both the wisdom and the sustainability of the present “model”, but I see little being done to change things. Given that framework, it makes little sense for a developer NOT to put his or her hand out – it’s up to our elected officials to reduce the subsidies. Or to put it in more personal terms, how many taxpayers are going to send back/not cash the “economic stimulus” checks that are going out soon? It makes more sense to just lower taxes for everyone than to play some sort of shell game, taking money from some taxpayers and giving it to others, but hey, it makes politicians feel good and important when they can “do something” for (to?) “their people” . . .

     
  13. Adam says:

    Jim, i agree with your take on incentives, but with regard to this:
    .
    “It may not fit your definition of what’s ‘right’ or ‘moral’, but it is legal. And as I’ve said before, if you don’t like the law, change the law, but don’t blame the people who ‘take advantage’ of it.”
    .
    on the flip side, not everything that’s legal is right and moral.
    .
    realistically, it’s much easier for those with resources and influence to change/write laws to favor their own interests, than it is for me to change laws with a grass-roots effort. they’ll have 10 new ones by the time i scrounge up enough money/people-power for a single petition.
    .
    making money through hard work and innovation is fine. making money through subterfuge is not – i think most people would agree regardless of their take on morals. the folks at THF are big girls and boys – they know right from wrong at a fundamental level. they know it is inappropriate to take/ask for public money to maintain their private property without public knowledge AND BLESSING. i’m sorry, but Joe Not-A-Developer, myself included, doesn’t know that “Community Improvement District” actually means “District Where We Give Your Money Away To Wealthy People So They Can Make More Money At Your Expense.” that’s why it’s called a CID instead of a DWWGYMATWPSTCMMMAYE – they don’t want me to know! so, why exactly should they be excused? what, because i would do the same thing if i were in their shoes? nope.
    .
    but we can agree to disagree, like you said. 🙂

     

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