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City of St. Louis Says Even Small Landlords Need a Business License

Say you buy that problem house next door to yours so you can do a better job of screening renters. You buy the house in your personal name, just like your own house, and proceed. But wait, even though you’ve got a day job the city license collector’s office says you are operating a business and therefore must obtain a graduated business license — at $200 per year.

At issue is what constitutes a business. Over the last few months this topic is repeatedly raised on the Rehabber’s Club discussion list.

Some argue, presumably in agreement with the city, if you receive money you are operating a business. Others cite the fact they own the property in their personal names, do not have an FIN (Federal Identification Number) and that the IRS considers such income as “passive” as opposed to their “active” income from work in which you typically receive a W-2 or 1099 as reasons why they are not a business.

Here is what I gather from the discussion:

  • The license collector makes no distinction between owning the property in your personal name, an LLC (Limited Liability Corporation), a partnership, or a corporation.
  • The license collectors office does not distinguish between owning one rental unit or hundreds.
  • The city cites ordinances requiring all businesses to have a license unless specifically exempt — a few professionals such as a doctors, engineers, real estate agents, etc. are exempt by state law.
  • The license collector doesn’t consider it a business if you live in the building, say in the case of a two-family.

I do concur that if you establish some sort of legal structure (LLC, corporation, etc..) in which to own property that may well constitute a business even if the income is passive. That said, I once had a stake in an LLC that owned a piece of rental property and we didn’t have a business license — it never occurred to us as we didn’t think this was a “business.” The business license is that thing you post in your place of business for customers to see, right? And for the record, I no longer have an interest in that property and it is no longer held in an LLC.

Ironically, one person posting on the discussion list indicates he was told that the license collector is basically ignoring those hard to find landlords that have LLC’s but are tracking down individual owners of property where the property tax bill is mailed to an address other than the property address.

For ten years I owned a two-family building — living in the first floor unit and renting the 2nd floor unit. From what I gather, such an arrangement would be exempt — that does not constitute a business they say. However, after 10 years I bought another building and moved from that first 2-family so then it apparently would qualify as a business and require a license. I sold that first 2-family in January 2006.

If we look at the issues and policies being tossed around it would appear that owning a single family house that you rent and thus receive passive rental income (possibly at an annual loss on a cash accounting basis) you are operating a business. However, you can own a 20-unit building in which you live in one unit and rent the remaining but that is not a business.   WTF?
The license collector’s office says you need a business license for each location in the city. If you operate a chain of McDonald’s drive-thrus you must have a business license for each location even if all are operated under the name of one entity. Seems pretty logical.  So if you bought several properties on your block to help stabilize it I wonder if they’d require a license for each address? And if so, is it based on address or the assessor’s parcel number? For example, many corner storefront properties have two tax ID numbers — one for the commercial space and one for the residential space. Does each constitute a separate business from a landlord perspective? If so, each address may require more than one $200 business license.

The ordinances on this are not helpful.  Stating any business, except those that are exempt, requires a business license leaves far too much gray area.  Short of an ordinance clarifying how and when property owners must have a business license, I want to see a written policy.  I plan to talk with our License Collector, Mike McMillan, about this issue as I have many questions.  I’m sure you have plenty as well.  And finally, remember that it may be wise to talk to your attorney if you don’t think you should be required to have a business license.


St. Louis’ Ballpark Village Changing Mix, Includes New Centene HQ

This past Summer the Missouri Supreme Court told the City of Clayton and the Centene Corporation their project area doesn’t meet the qualification of “blight” — therefore they could not force adjacent property owners to sell. Rebuffed by the state’s highest court, Centene began opening the doors to any and all offers. Using their number of employees — both current and projected — as a major bargaining tool, Centene had the upper hand in negotiations with those who were interested.

bpv - 01.jpg

So this past Sunday Mayor Slay and Centene’s President jointly announced that Centene would be building a new corporate HQ building in downtown St. Louis, and in a portion of the mud hole formerly occupied by Busch Stadium II (1966-2006). This is, without a doubt, a very big deal. But to hear the Mayor and others talk about it the decision was reaffirms past decisions — such as the convention hotel and razing the historic Century Building for a parking garage. Downtown didn’t empty out overnight and the recovery was certainly underway before Mayor Slay was elected in 2001. Developers Craig Heller, John Steffen and others were already converting warehouses to living spaces. The nationally known City Museum opened in 1997 due to the vision of one elected and affluent artist, Bob Cassilly. The wheels were already in motion when Slay moved down the hall from the Board of Alderman to the Mayor’s office in 2001.

What we cannot do is create a laundry list of past decisions and definitively conclude these are all responsible for downtown’s turn around. Take the convention hotel, for example. I’m really glad the old hotel at the SE corner of 9th & Washington was incorporated into the project. The former lobby makes for a stunning restaurant (An American Place). But did we have to close off St. Charles street with the monolithic parking garage in the process? The convention hotel has struggled to make its debt payments and reserves have been nearly depleted. Occupancy rates, however, are increasing. In the end it probably was a good decision to supplement the convention center with a hotel — we had to do something to save it. But this does not mean that the final design was the best choice to make — that different design decisions might have connected more of downtown together and had better results.

We are in a time when people are simply bored with their lives in the suburbs. The baby boomers dutifully raised their children in the ever expanding suburbs — it was perceived as the right thing to do and their parents certainly approved. But now their kids have families or are perhaps off to college so those boomers don’t need the big house on a half acre lot anymore. They are finally ready to have some fun, travel, walk and see things. The kids of the boomers, having grown up in the burbs, are also seeking a more interesting lifestyle. They are staying single longer and waiting to have kids longer than their parents and grandparents generation. As a result, suburban municipalities across the country are scrambling to build walkable town centers to keep a hold on their tax base. These suburban areas, like Creve Coeur in the St. Louis region, is realizing they cannot survive simply on large single family detached homes, the occasional apartment complex and the arterial lined with generic strip centers. Suburban communities that once placed minimums on the size of residential units are dropping or lowering them so that people can stay in the area but still be able to downsize. St. Louis’ Mayor Slay did not create these conditions.

Of course you can’t blame the Mayor for attempting to put a good PR spin on changing demographics that are naturally working in the city’s favor. Part of his job is to market the city and a major past obstacle has been about perception. The Slay administration, to their credit, has been working overtime to change the perception of downtown and the city. Unfortunately, they’ve done nothing to change the perception of how business is conducted. If anything, they’ve reinforced negative ideas about back room deals and he with the most money gets what they want.

Back to Ballpark Village and Centene. We all knew, several years ago, that something was going to get constructed on the site of the old stadium. The Cardinals would never leave a big hole next to their new stadium. The Cardinals, developer Cordish, the City and the State have been in continual discussions about the various components and how much of the tab the tax payers should fund for developing this private land.  One of the things that has annoyed me is the claim of it being six city blocks in size.  I took exception to that, saying it was only 3 city blocks — 3 blocks east to west and one block north to south —Broadway (5th) to 8th and Walnut to Clark.  I wasn’t around when the street grid changed back in the 60s so I looked at a map from a recent used book to prove my point.  Turns out, I didn’t know about Elm.


I’ve circled the area above that is the Ballpark Village site.  Clark used to jog a bit at 7th.  Clark, if you recall, was closed from 1966-2006 with the previous stadium.  With the current stadium Spruce, formerly open, is now closed.  But as you can see in this pre-urban renewal map, a street called Elm used to run between Clark and Walnut.  So originally it was divided into five blocks, not three and not six.  Given the shape of Clark today — going around the north edge of the stadium, the total area is a bit less than it was back in the day.  Also, I suspect that Elm was sorta like St. Charles Street or Lucas St — more of a wide alley.  Elm was obliterated during the massive urban renewal project in the 1960s when basically everything in the area was wiped away.

The difference however, was that back in the days of active cities the buildings turned outward toward the public streets.  All the indicators I have of BPV is that it will be like a mall only without a roof — it will focus inward.  But who can blame it?  To the east and west are the sterile stadium parking garages. To the north is the back side of the two-blenders on a base hotel.

Ballpark Village, with or without Centene, was going to need delivery areas.  Where will this end up?  Not in the center food court!  And certainly not along Clark next to the stadium.  No, Walnut and Broadway will likely take the brunt of the docks and trash receptacles.  Walnut will likely be no more pleasant than it is today.

And a year ago we were told of the 250 condos and 1,200 parking spaces in Phase 1 (view PDF of handout).  Now it is zero condos and 1,750 parking spaces!  The city’s new math.  And are these spaces underground?  Of course not, they are out in full display along the north edge of the inwardly focused site.   The jobs created was listed at 1,969 with salaries totaling $54.5 million (an average of just under $28K/year).  Why was this important?  To illustrate how much additional tax revenue the city would bring in due to earnings tax — $545,000/yr based on their estimates.

So now with Centene’s 1,200 jobs the city will bring in zero additional earnings tax because while Mayor Slay bent over he dropped an agreement to exempt Centene from the city’s 1% earnings tax.  Nobody likes the earnings tax but every time it is mentioned to do away with it the city claims it is necessary.  Maybe this is a clever way for Slay to eventually eliminate the tax?  Why?  Well, you think that Wachovia (A.G. Edwards) is going to bring all their new jobs to the city without a similar deal?  And the brewery, they are not going to like this.  AT&T and all the other big players are going to scream foul and they’d be right.  The little guy, however, will keep paying the tax for a long time.

I think the Mayor is right, some of these new 1,200 jobs may well translate into new city residents.   They’ll buy places with 10-year tax abatement!  Still, new residents means new local shoppers which, in our city, will be justification for new big box developments like Loughborough Commons.  Ugh.

Still I am concerned about all the cars this project will bring to such a concentrated area.  How backed up will the streets be at 8am and 5pm?  How vacant will the streets be on a Sunday afternoon?  The city should have asked for more.  For example, Ballpark Village/Centene HQ is an excellent location for a downtown bike station — a small area with showers, lockers and bike storage.  This allows office workers to bike to work, shower and get dressed for a day’s work.  A.G. Edwards provides such facilities for their employees but downtown needs this in the bigger picture.

The city could have also could suggest to Centene they not offer free parking to employees — going so far as to tell an employee they’ll get an extra $50 and a transit pass each month if they don’t take up a parking space.  It is called parking management, St. Louis study the practice sometime.  Cities like Portland OR actually set maximum numbers of parking spaces for new construction — a limited supply creates higher demand, driving up prices and encouraging alternate modes.  St. Louis is still in the ‘we can’t have too much parking’ mode of thinking that has ravaged our downtown for decades.

So while I am pleased the Slay administration & the Cardinals/Cordish team managed to land the Centene HQ for downtown I’m wondering if the price was too high.  If you give enough away we could attract many more jobs, residents and retailers but at some point the numbers don’t add up to a net positive.  Once the initial hype and popping of champagne corks settles down perhaps we’ll get a clearly picture of the deal.


Excise Division to Hold Hearing on Qdoba’s ‘Summer Garden’ & ‘Full Drink’ Request

The Qdoba chain’s latest store in the St. Louis region is open at Loughborough Commons. This afternoon the Excise Division will hold a hearing to determine if they should get a “full drink” liquor license and an outdoor “summer garden” permit. While the poor planning at Loughborough Commons disgusts me and I’m not fond of formula chain places I can’t imagine anyone telling them no at this point.


The place is done, including the patio. The outdoor area will soon be ideal for watching those folks driving around the new strip center to order their latte at the Starbuck’s drive-thru window.

What would happen if immediate neighbors all showed up at 2pm protesting the idea of people buying a bud light to go with their burrito? And further yet, drinking said bud on the patio.

So who is the excise division? Well, they are part of the Department of Public Safety — you know that department now headed by Charles Bryson. The DPS website doesn’t tell us much:

Excise Division

6 Employees
Robert W. Kraiberg, Commissioner
The Excise Division is charged by City Charter with the regulation and control of liquor within the City of St. Louis. The Division is responsible for determining licensing in accordance with the City Liquor code, authorizing issuance of all liquor and non-intoxicating beer licenses, enforcement of City Liquor Laws and Ordinances and initiation of civil action to suspend, cancel or revoke licenses when violations to statutes occur.

That cannot be the extent of information about liquor licenses? So I went back to the main city site and used the search field. This is what I got:

The default is to search stlouis.missouri.org — the “CIN Main Site” or I could search stlcin.missouri.org which is a bit more descriptive. The third option is to the search the internet which we all can easily do from our browsers anyway. I picked the default and basically found press release information — even though press releases are found in the second search option according to the search page. So, I selected the second option and there I found a FAQ page on Liquor licenses. Why this is not linked directly from the Excise Division/Department of Public Safety site I don’t know.


So we see a full drink license “cannot be issued if the surrounding neighborhood disapproves.” Gee, define surrounding. It seems they have a “formal procedure” that can only be obtained via a phone call from 8-5 Monday through Friday. I’d say secret procedure is more like it.  You know I think this whole web thing might actually take off so it would be OK to invest in getting more and more information available to the public via the internet.

People want solutions so here we go.  Explain the types of licenses in greater detail, linking to the appropriate ordinance(s).  Make the necessary forms available online as editable-PDF documents.  Explain the formal procedure so that everyone applying for a license, as well as neighbors, know the same rules.  List who makes the decision and what their criteria is.   Are these people appointed, elected or staff?

Back to Qdoba for some final thoughts.  A chain place can afford to build out a full establishment on the assumption that nobody will object to their having a liquor license and a patio permit.  I know I certainly don’t object — a few beers will likely make Loughborough Commons more tolerable.  But the local person seeking to open an establishment can’t afford such a proposition.  Can they get necessary approvals before spending their life savings on a building or lease space?  Without the finished space the neighbors might have concerns about what is planned.  Without the liquor and/or patio license up front a lender might see the proposition as too risky.
I may need to visit City Hall Room 416 today at 2pm to find out more.


St. Louis’ Board of Adjustment Votes to Restrict Free Speech on Eminent Domain

You’ve likely seen Jim Roos’ anti-eminent domain statement on the side of a building he owns in an area known as Bohemian Hill. Yesterday attorney John Randall argued before the Board of Adjustment the U.S. Constitution protects the rights of citizens to voice free speech. The Board of Adjustment hears appeals from those who’ve been denied permits by the building department. The member’s names, date appointed, term length, term expiration are not posted online on the city’s website, nor is their agenda published online.

During the meeting a total of three appeals were heard relating to signs — all did not meet the strict letter of the city’s antiquated zoning code regulations (see the “Comprehensive” Sign Control Regulations). All three were larger than allowed by the code, two were approved but one was not. Laclede Gas got approval for a large sign on top of their building in downtown St. Louis so they could hopefully get spotted by TV cameras during Cardinals games. Laclede Gas argued their sign on the top of their building would be a positive “contribution to the St. Louis skyline.” I saw the mock-ups of the sign, it wasn’t something to hail as great nor was anything bad. They indicated that the city’s maximum allowable size for a sign on their building would look like a “postage stamp.” If the city really wants to be business friendly they will take a fresh look at the sign regulations and I don’t know, maybe publish something on the building division site about signs rather than make the public wade through the technicalities of the ordinance.


Roos and his attorney argued this is not a sign, per the city’s regulations. I’m not going to take you through all the various points of the ordinance but in large part, per the code, a sign faces a public street. The building above was originally a rear building — the public street is to the left out of view. The side of the building, clearly visible from the interchange of highways I-44 & I-55, does not face a public street — it faces an adjacent parcel of land owned by someone else. The poorly constructed zoning code relating to signs also addresses the question of what is a sign vs what is not:

If for any reason it cannot be readily determined whether or not an object is a sign, the Community Development Commission shall make such determination.

Again, it was argued this was not a sign but Bob Lordi from the city’s building division determined it is a sign. The ordinance language is unclear as to how this debate of sign or not gets resolved. Some of the best humor was provided by a June 28, 2007 letter from alderwoman Phyllis Young (D-7th Ward):

“If this sign is allowed to remain then anyone with property along any thoroughfare can paint signs indicating the opinion or current matter relevant to the owner to influence passersby with no control by any City agency.”

When this was read during the proceedings I actually laughed out loud. The irony, of course, is that earlier this year Young advocated razing the entire area where the “sign” is located for a new development. She passed legislation blighting the entire area and now wants to protect it from a sign put up in response to the very real threat faced by these home owners. I will have more on the status of this project separately.  Click here to view the entire letter in PDF format.
Another part of the letter gave me reason to chuckle as well:

I have worked diligently throughout my career as an alderman to reduce the number of billboards cluttering our neighborhoods and our city. As you drive I-44 you’ll see no billboards in my ward from Compton east to the intersection with I-55 other than the one in the commercial area at Jefferson. The wall sign is an affront to the neighborhoods, drivers, and the city. It should be denied and removed.

One of the most telling comments is that being an alderman is a “career” rather than simply a public service. But I think Phyllis needs to get in her Prius, or better yet a good pair of sneakers, and just check out more of her ward, including downtown.


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“St. Louis-based” Scottrade Has No Branch Office in the City of St. Louis

The discount brokerage firm Scottrade recently opened their 300th branch office (press release), however, the company located in St. Louis’ suburbs does not have a branch in the City of St. Louis.  Their name is in big letters downtown but as the naming rights for a sports facility. Can someone downtown please give Scottrade CEO Roger Riney a tour of available spaces?