Finance news

University City — For nearly two years, no new development in St. Louis County has obtained tax-increment financing, the controversial incentive that cities use to attract developers.

The Kingsland Walk development, about two blocks north of the Delmar Loop in University City, is expected to change that.

It will be the first TIF project in the county since state law changed the make-up of TIF commissions on Jan. 1, 2008.

For years, local governments doled out tax-increment financing as a tool to encourage developers to locate in their cities. In 2007, the Missouri Legislature changed the law, taking some authority from the cities and adopting a regional countywide approach. That — combined with the downward spiral of the economy — put a lid on TIF requests.

While not as far along as the U. City project, Brentwood, Valley Park, Bridgeton and St. Louis County also are beginning to look at possible TIF projects, said Glenn Powers, the county’s planning director.

Under TIF, a developer may divert some money that would have been used for taxes to help pay for some development costs.

Local governments and schools receive the same base property and sales taxes as before, but forgo part of the additional tax money generated by the development for a period up to 23 years. The jurisdictions expect to benefit fully from the development in future years.

In University City, developer Metropolitan Development-Kingsland Walk LLC has asked for $5.5 million in tax-increment financing for its $36 million project, featuring 98 condos and apartments and more than 23,000 square feet of retail space at the southeastern corner of Vernon and Kingsland avenues. The development would be built in two phases.

The proposed agreement with the city requires the developer to close private financing by March 1 and begin construction within 60 days. A 12-member TIF Commission has given unanimous support and recommended the City Council do the same. Final approval is expected Dec. 7.

"It’s a fabulous re-use of an almost vacant area," Mayor Joe Adams said. "It will help University City move forward."

The developer sought $2.5 million in TIF money for phase one — an area north of Metcalfe Park — and $3 million for the second part, extending to Vernon. The builder will be Metropolitan Design and Building with Thomas Cohen Architecture as architect.

Lehman Walker, director of community development in University City, said Kingsland Walk fit the criteria for the special financing because it’s in a depressed, largely vacant area. University City had only awarded TIFs "if an area is truly blighted and in need of redevelopment," Walker said.

The project would be U. City’s third TIF project and its first in more than 10 years direct payday loan lenders. Powers said TIFs were intended to encourage retail and commercial growth in areas where development might not otherwise happen.

hurting competitors?

The changes in state law altered the composition of 12-member TIF commissions — increasing the number of St. Louis County representatives to six and cutting to three from six the number of slots for the municipality in which the project is situated.

The other three appointees represent affected taxing districts such as school and fire districts.

"The idea behind the changes was to get the composition of the TIF commissions more regional," Powers said. "When a city’s members dominated the commission, a TIF was usually about the city getting more commercial revenue into their city, a lot of times that was at the expense of other cities. You’d open a store here, and another one would shut down over there. "

He gave as an example a Wal-Mart closing in Town and Country and a larger one opening in Manchester a mile away.

"As a county TIF commission member myself, we’re going to be scrutinizing these things a little more. … Do we really want to approve a new retail development if it’s going to hurt the competitor down the road?"

If a county TIF commission turns down a project, the local government may still approve it but only with two-thirds majority of the council. Powers, who was on the commission that voted on Kingsland Walk, said the project was a good use of TIF. "It strengthens what’s already there in University City."

Jay Simon, president and CEO of Metropolitan Design and Building Co. here, said the 98 condos and apartments would vary from 680 square feet to 1,600 square feet. One, two and three-bedroom units would be available in the nine-building project.

"We plan on just building primarily apartments at first due to the market condition on condos," Simon said this week. "Those units will start at $750 a month and go up to $1,680 a month."

Preliminary plans call for Phase One to include four buildings with 51 residential units and about 8,800 square feet of retail space, scheduled for completion by early 2011. Phase Two includes five buildings with 47 residential units and about 11,000 square feet of retail space scheduled for completion by early 2012.

City officials hope the project will be a catalyst to revitalize the eastern part of University City.

"We think this will generate additional improvements as the Loop continues to expand," Walker said.

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