Today's St. Louis Post-Dispatch carries an editorial on Paul J. McKee Jr.'s NorthSide project ("Next 90 days could set North St. Louis' direction for decades").
Among reasonable suggestions and enthusiasm for the potential of NorthSide, the editorial's main purpose seems to be making the case that the city of St. Louis, pension crisis be damned, should guarantee some of the tax increment financing for NorthSide, and that McEagle should be given eminent domain latitude:
Financial guarantees from the city and the use of eminent domain are "hot-button" issues with the public, and for good reason. But there is every reason to think they can be resolved in ways that both impress potential investors with a prudent city commitment and protect the public.
Well, the Post-Dispatch has it wrong here. The absence of a city guarantee is the work of the office of Mayor Francis Slay, who is not exactly an opponent of the NorthSide project. The restriction on eminent domain that will likely be in the redevelopment agreement comes from Alderwoman April Ford-Griffin (D-5th) and her colleagues involved in discussions with the developer. Again, Ford-Griffin is a supporter of the project. Ford-Griffin's ward comprises 80% of the proposed project area, and her constituents are up in arms about eminent domain. McKee says that he only wants 20 parcels through eminent domain anyway, although the developer has not provided a list. Disallowing broad condemnation rights on this project -- which may take over 30 years to complete -- makes sense. Life has to go on for residents while McKee is working on the Downtown West and Mississippi River Bridge landing phases of his project.
If public officials who support the project have placed limits on the public financing and eminent domain use for NorthSide, that's for good reason.
Monday, September 21, 2009
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3 comments:
What if the TIF won't fly without a public sector guarantee?
Should McKee seek a financial endorsement for his TIF from the state of Missouri?
That's a can of worms that McKee wants to avoid.
In the end, look for the city to back the TIF in a very tightly controlled fashion (not before signed leases from major national tenants, etc.).
That condition alone could stall the project indefinitely, especially during this weak economy.
What's better: an indefinitely stalled project with a tightly limited city guaranty, or a project that moves ahead now with fewer taxpayer protections?
Obviously, McEagle will push hard for the latter.
You mean, what if the TIF won't fly on the McEagle timeline without a guarantee? That's a problem the developer will have to resolve. McEagle will be able to tap up to $20 million a year in state tax credits, so it won't exactly lack cash flow up front -- it will just have a slower flow. Ultimately, the project will be better if it goes slower now. The vast scale is a liability in this market, so breaking up the development will be more realistic and less invasive to existing fabric and projects.
The city should not offer any guarantee; the time when the vast scale was realistic has passed. the best thing for all parties now is to break the project into as many pieces as possible and be more careful about implementation.
Past abuses of the TIF and tax abatement bind the city, ironically for a large project in an area that more appropriately should be the beneficiary of TIF projects. However complicit elected officials are in past mistakes, that should not force them to continue down that path.
So it looks like nothing has changed at the Post in almost 50 years.
http://www.umsl.edu/virtualstl/phase2/1950/events/perspectives/documents/prog-decay1.html
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