All sides agreed on one thing during yesterday’s discussion of the $14.5 million TIF for developer John Steffen‘s makeover of St. Louis Centre — this is a bad deal for the taxpayers of the City of St. Louis.
“This is not something that any of us wants to do,” said Barb Geisman, deputy mayor of development. “But those of us that have thought about it and support this feel that we have no choice.”
Geisman’s remarks came at the meeting of the three-member Board of Estimate and Apportionment (E&A), which is composed of Mayor Francis Slay, Comptroller Darlene Green, and President of the Board of Alderman Jim Shrewsbury. The Board of E&A must approve all City real estate deals and financial appropriations — including TIFs (Tax Increment Financing projects), which they have done at least 60 times since 2001.
But what makes this TIF proposal different, said Comptroller Green, is that it puts the City’s credit rating on the line by guaranteeing Steffen’s bank loan.
“The earlier redevelopment agreement for this particular project — that we did pass — did not put the city’s credit at risk,” said Green. “Now that it has come back it has come asking for the city’s help to purchase the building because a speculator has offered an outrageous purchase price.”
The Comptroller said the only other time the City has put its credit on the line for a private developer was the disasterous St. Louis Marketplace development on Manchester Ave. That shopping center, built during the administration of Mayor Vince Schoemehl, today sits mostly empty and costs city taxpayers more than $1 million every year.
“There were safeguards put in place at that time. Those safeguards have failed,” said Green.
But Mayor Slay said it is worth the risk to taxpayers to help Steffen redevelop One City Centre, the underused 25-story office building, and St. Louis Centre, the vacant downtown mall.
“This particular property is a cancer in our downtown,” said Slay. “It is the biggest complaint we get from conventioners who come to this city.”
Slay praised Steffen, who is also a major funder of the mayor’s political campaigns, as the right man for the job and he said the City of St. Louis should do whatever it can to help get this deal done as soon as possible.
In the end, President Shrewsbury, who was seen as the swing vote on this issue and who is also in what could turn into a tough re-election campaign, agreed with Slay.
“Had this been the original proposal on this project, I, like the Comptroller, would have said no,” said Shrewsbury. “But it seems like circumstances have changed and we’ve been forced into this position.”
Green said that rewarding out-of-town speculators, like the ones that purchased this property in 2001 and now are looking at a $20 million profit in the resale, sets a bad precedent.
“I support the project,” said Green. ” But I don’t support the method in which we’re planning to go forward with this financing.”
This is the only option when are standards are low. Since when did the power of the state become subservient to the will of the corporation? Its funny how eminent domain can be used for private enterprise, Loughbourough Commons and 3rd Ward, however it cannot be used for actual public good, as in this eyesore. Maybe our leaders need to worry less about their contributions and more about the integrity of our city, its credit, and finally its citizens. If this is a great investment which would make a return, then developers would be fighting over it. Thank you Darlene Green for trying to protect the City against a potentially big mistake.
If we took the property then the City could set the terms of its sale, redevelopment, or demolition. This presupposes the LRA has the capacity to market the property, yet maybe with public pressure our officials could have had a better plan. Regardless, the taxpayers shouldn’t foot the bill if the market fails. Stimulation through ED yes but this is too much.
Posted by Doug Duckworth | 14. Dec, 2006, 12:24 PMDoug, the question of eminent domain came up briefly at yesterday’s E&A meeting. Slay and Geisman said it would be too risky to try to use E.D. because the owners might be awarded a greater value than what is being paid now.
Some might find that hard to believe considering there is a record of sale from just five years ago on these properties. BTW, according to Green, the current asking price is double the ’01 number.
I fully agree with you that it is at least a failure of leadership from the Mayor’s office to constantly defend harmful uses of eminent domain which result in poor people being forced from their homes, while deciding not to use it in this case.
The out-of-town millionaire owners of the Centre are going to make millions more, thanks to the full faith and credit of the people of the City of St. Louis.
This deal stinks to high heaven.
Posted by Antonio D. French | 14. Dec, 2006, 1:32 PMI hate the deal too. It stinks. But I also agree with the decision to do it under the (highly unfortunate) circumstances. What matters most to me in this decision is what happens if you DON’T do it. At this particular location, St. Louis doesn’t have years and years to get it right.
Posted by Margie | 14. Dec, 2006, 2:26 PMSadly, developer-backed “leaders” like Reed or McMillan would have easily voted with Slay too. Maybe our only watchdog Comptroller will run for Mayor in 2009.
Posted by Anonymous | 14. Dec, 2006, 3:23 PMWho knows how McMillan or Reed would have voted?
They were not sitting at the table, but President Jim Shrewsbury was and he voted for this terrible deal and he is an attorney and former Alderman that understands real estate transactions backwards and forwards.
He could have joined with Comptroller Darlene Green and voted against this terrible deal. Once again, he was afraid to take leadership as the President of the Board of Alderman. However, the citizens of St. Louis are going to take leadership and vote him out on Tuesday, March 6, 2007.
What a weak leader, no wonder he was sick sitting at the table. The City of St. Louis is not going to fall apart if St. Louis Centre is not redeveloped, where is the proof that it will happen.
Posted by Anonymous | 14. Dec, 2006, 3:55 PMIf the current owners have not done anything with the building for years and apparently have nothing in the works, I would go with eminent domain. I mean why should they make a huge profit for doing nothing? If the courts don’t agree then let it sit and wait until the owner gets rid of it. Meanwhile the city should stay on their butt to make sure it is kept up.
Alternately if the people of St. Louis are to invest in the project then there should be a great return on the investment, just as any investor would expect. This does not mean taxes. In capitalism if a project is successful then those who take the risk are rewarded. That should be the case here too. Certainly the people of St. Louis are not going to be asked to take the risk and then get nothing in return? It would be interesting to see the final agreement.
Posted by gmichaud | 14. Dec, 2006, 4:16 PMAs a 6th ward resident, I KNOW how Lewis Reed would vote! Pyramid and the other developers own him. Other wards worry about absentee landlords. We worry about an absentee alderman. Well…absent to the 6th ward residents whom he represents. If a developer has a cocktail party, however, he’s there.
Posted by Anonymous | 14. Dec, 2006, 4:58 PMLRA is not able to market any property the way it currently operates. One must understand that 7 different agencys make up the St.Louis Development corp. This group was put together to facilitate Eminent Domain in North St. Louis and split the spoils of city goverment
Posted by Anonymous | 14. Dec, 2006, 5:03 PMThe Comptroller’s opposition may be based on a mistake. According to her press release:
“The building, One City Centre, was purchased for about $17 million 5 years ago. Today, the seller wants $37 million of which the city is being asked for upfront TIF funding of $14 million using its full faith and credit.”
Actually, the “$37 million” isn’t the seller’s price, it’s the cost of the entire project.
No wonder she was upset: she was looking at the wrong column!
Posted by Anonymous | 14. Dec, 2006, 5:17 PMIt is a shame that people are reacting to this without a full comprehension of eminent domain. If the city uses Eminent Domain to purchase the building, by law a three person panel would set the sale price based on appraised value and other issues. In this case, if the sale price at $20 million, then where would the money come from to do the development?
Remeber, the buildign is downtown and does have some value associated with it, so the price could be very high.
Posted by Anonymous | 14. Dec, 2006, 6:24 PMWhy don’t we make the St. Louis Centre building the location of our Super Recreation Center, instead of South St. Louis where there are an abundance of recreation facilities?
We may have to rezone and reclassify the land first, but that just takes a vote.
There is enough space in the building, there is already a parking garage, it is easily accessible by the metrolink,it is next to our convention hotels and many other ones, and it may increase traffic downtown.
Just thinking outside of the box on this one!
Posted by Anonymous | 15. Dec, 2006, 8:07 AM