About 10 miles south of the Ferguson unrest’s Ground Zero, developers have proposed a $203.3 million project that will redevelop the northern third – or 800 acres – of University City, making a Costco or similar “big box” retailer the anchor.
However, some residents question whether University City officials are going to follow the Ferguson Commission’s recommendations to ensure that the project will create a more equitable, inclusive region.
“We must take the time now to ensure that benefits for the community are not only promised, but written into this deal as contractual obligations on the part of the developer,” statedMargaux Sanchez in an open letter.
The developer is requesting $70.5 million in public subsidy – in the form of tax increment financing (TIF) and a Community Improvement District – for the project at Olive Boulevard and Interstate 170. At the University City TIF Commission meeting on Tuesday, May 15, Sanchez and other U. City residents called for a Community Benefits Agreement that would legally bind the developer, Novus Development Company, to provisions that reflect the Ferguson Commission’s recommendations.
A Community Benefits Agreement (CBA) is a contract between community representatives and a real estate developer requiring the developer to provide specific benefits or protections to the affected community, Sanchez explained in the letter. It can address topics such as fair employment, affordable housing, youth resources, racial equity, and historic preservation.
In response to the call for a CBA, City Manager Gregory Rose said, “I believe a number of elements that were identified as part of the CBA are things that we are looking to include in the redevelopment agreement. The real purpose for this development is to make major improvements in the 3rd Ward.”
The 3rd Ward has the highest minority population of University City’s three wards and it also is the most impoverished. Rose said that he supports the community if they want to “pursue that endeavor” of drawing up an agreement with the developer.
When asked for his response to the CBA, Jonathan Browne, president of Novus, told The St. Louis American that he read Sanchez’ letter, where she also questioned the transparency of the process.
“I do not agree with it,” Browne said. “This has been a very public procedure. She was requesting everything that has been done before.”
Browne said that neither he nor the company has ever been part of a CBA. He did not comment on his willingness to participate in a CBA. When asked about his community outreach so far, he said that aside from public meetings, “We have primarily been in contact with 107 property owners in RPA 1 (Redevelopment Project Area).”
RPA 1 takes up about 80 percent of the project area, and that will be the site of the Costco or large retail store. The entire area is bounded generally by I-170 on the west, the city limits to the north and east, and Olive Boulevard on the south.
Browne said 68 of the property owners who will be relocated are single-family homeowners. He has contracts with all of them, but he doesn’t have contracts for all of the business owners yet.
“The concentration has been on the residential,” Browne said. “We were trying to determine whether the residential owners would be in or not.”
The city has said the developer could not use eminent domain for residential owners. Rose could not say whether the number of homeowners will increase or decrease after the project is completed.
At the meeting, TIF Commissioner Susan Armstrong asked about goals for employing minority workers and business owners on the construction side of the project.
University City currently does not have established inclusion goals. Rose said they are working to establish a policy for minority inclusion, and those goals will be included in the project’s redevelopment agreement. Rose could not give a ballpark number on what those goals would be.
Mark Grimm is an attorney for Gilmore Bell and is representing University City on the project. He also represents St. Louis Development Corporation, where St. Louis has established goals for minority inclusion. In St. Louis, developers are required to present a plan for how they will employ minority workers and businesses at the TIF Commission meeting. St. Louis’ TIF Commission also takes into account a developers’ track record of achieving minority inclusion goals. However, that is not required by U. City’s commission.
When asked the reason, Grimm said, “This is the first TIF project in University City in a long time.” St. Louis has a larger volume of TIF projects, he said.
Grimm explained that real property taxes generated currently in redevelopment project area one are about $550,000. If the project is completed, those taxes are expected to rise by about $2 million by 2040. However, the real benefit will be the increase in Economic Activity Taxes (EATS), Grimm said.
A cost-benefit analysis projects that the city would receive $2.7 million in revenues in 2040 if the project is built, compared to about $239,000 if it isn’t built. That is assuming that no other development were to take place. With some of that revenue, the city would give out grants to homeowners in effort to convert renters to homeowners, the proposal states.
“If you have a renter who wants to buy a house and they know if they buy a house they can get a $20,000 grant to fix up the house, to me that would be a large incentive to buy a home and fix it up,” Grimm said.
Patricia Washington, a U. City resident, represented the coalition that wants to see a CBA during the public comment portion of the TIF Commission meeting.
“We want to make sure that those people who are often left out of the discussions – those who are low-income, those who are minority, those who don’t speak English – that their voices are heard as part of the project.”
The city anticipates that, if approved, the RPA 1 project will begin construction in 2019 and open for business in 2020. Redevelopment programs for RPA 2 and RPA 3 will be initiated as funding permits, according to the city.
“There is a growing interest in our community to see a Community Benefits Agreement negotiated,” Washington said. “The timeframe for this project is very aggressive, and so we know that the window of opportunity to negotiate a Community Benefits Agreement is very short.”
A public hearing will take place on May 23 at 7 p.m. at the Mandarin House Banquet Hall, 8008 Olive Boulevard. The meeting will focus on the city’s relocation plan for property owners. For more information on the project, visit http://www.ucitymo.org/798/Olive-and-170-TIF.
