St. Louis city aldermen voted today to move forward with two bills that would increase sales tax by one percent at an area where NorthSide Regeneration developer Paul McKee Jr. is building a grocery store and gas station – near the intersection of Tucker Boulevard and 13th Street.
They voted to perfect Board Bill 149 and 150, which would establish a Community Improvement District (CID) as part of McKee’s TIF funding structure for the “GreenLeaf” project. The CID increases the sales tax at the future market and gas station by one percent, and that tax revenue will go towards the $17-million project’s infrastructure, site acquisition, demolition and repairs.
However, the sales-tax increase will now expire after 16 years – instead of the originally proposed 40-year limit – after St. Louis Comptroller Darlene Green raised questions at the October 19 Board of Estimate and Apportionment meeting.
“Infrastructure needs don’t necessarily meet the needs of the community for the 40 years that the city is allowing for this CID,” Green said at the Oct. 19 meeting.
Green’s lawyers worked with attorneys at St. Louis Development Corporation come up with an amendment that limits the sales-tax increase to the life of McKee’s GreenLeaf TIF, which is 16 years. On Oct. 20, the Board of E&A met again to approve those changes. The amendment states that the Board of E&A would only approve McKee’s $2.8 million TIF note if the aldermen approved their amendment.
With the amendment, Green said now about $310,000 over 16 years in sales tax revenue will go towards paying off McKee’s TIF note. A TIF note is an alternative to TIF bonds and allows McKee to go to a third-party lender and get a loan for the project.
Today, 18 aldermen voted in favor and five aldermen opposed Board Bill 149, which refers to the $2.8 million GreenLeaf TIF note. The opposing aldermen included Antonio French (Ward 21), Cara Spencer (Ward 20), Christine Ingrassia (Ward 6) and Scott Ogilvie (Ward 24). Board Bill 149 is dependent on aldermen passing Board Bill 150, which establishes the CID and sales tax that goes towards paying off the TIF Note. The aldermen voted to perfect Board Bill 150 with a voice majority vote.
Spencer said she opposed the bill because it sets a bad tone for the “long line” of TIF dollars that the aldermen will have to approve for McKee’s Northside Regeneration project in the future. This is the first development that McKee has sought to use any of the $390 million TIF, which was first approved in 2009 for the large-scale Northside Regeneration project in North city.
The two bills will before to the full aldermanic board for their final reading and passage on Friday, October 28.
The proposed GreenLeaf Market will be located at 1408 N. 13th St., near the Stan Musial Veterans Memorial Bridge. The ZOOM Store – a gas station, store and car wash – will be directly across the street. If the bill passes, the North City gas station will have a 9.68 percent sales tax – making it among the highest sales taxes in the country. Chicago is at the top with 10.25 percent, and Seattle sits in sixth place with 9.6 percent, according to the Tax Foundation. The grocery store will have a slightly lower tax, per state law, but St. Louis Development Corporation representatives said they do not know the exact amount.
Southside vs Northside CIDs
On Oct. 19, Green said taxing residents for 40 years at these businesses is too long, if the main purpose is to pay for the development’s infrastructure. Green pointed to a CID in South City, called the Loughborough Commons CID.
There, the CID is used to pay back money that was borrowed to build infrastructure with a maximum amount of $5 million. That district is in place for 25 years, not 40 years like McKee’s, she said. Green suggested that McKee’s CID needs to have a maximum as well, and it can’t be an “open-ended contract.”
In 40 years, the community is going to have needs that go beyond infrastructure, such as security and public safety, she said. And the city needs to make sure they aren’t dipping into other revenue streams to pay for that when the CID is designed to pay for such things.
“You don’t want to overlook the fact that this is North, that was in the South,” Green told The St. Louis American after the meeting. “So, wait a minute. You can do it good over there. Why can’t you do the same in North City?”
Activist Rasheen Aldridge, who is on the November re-election ballot for 5th Ward Democratic committeeman, attended Oct. 19 meeting. He said he didn’t agree with increasing sales tax to build the gas station.
“Any time you have to tax the poor, it’s not a good method,” Aldridge said. “The median income of people around the area is $15,000. People are just barely getting by. We don’t need a gas station, but we need a grocery store. So it’s like we are getting penalized to get what we need.”
