Missouri housing board denies tax credits to Clayton developer
The Southernside apartment complex in O’Fallon.
Despite the support of its staff, the Missouri Housing Development Commission voted against providing about $1.3 million in combined federal and state tax credits to Hennessey Development.
The Clayton developer had applied for and received tax credits – which are often sold on a secondary market – to help finance its Southernside development in O’Fallon.
But the tax credits have been withheld for more than a year because of a dispute over allegations that one of Hennessey’s subcontractors used illegal immigrants on the job.
Last year, the housing commission passed tougher rules which force developers to prove their workers are legal.
MHDC director Pete Ramsel told the board that at least as it relates to the federal tax credits – about $700,000 – he believed the board had no choice but to approve them because Hennessey had fulfilled the federal regulations.
Three commissioners, Treasurer Sarah Steelman, assistant attorney general Jeff Schaeperkoetter, and Bill Luetkenhaus, voted against paying any of the credits. Luetkenhaus wanted the commissioners to issue sanctions against Hennessey and its subcontractor, but the commission decided to take up the issue again in December.
One of the issues with such sanctions, argued Schaeperkoetter, who represents Attorney General Jay Nixon on the commission, is that there has been no official finding that Hennessey violated any rules that were in place at the time.
“Can we issue sanctions without a finding,” Schaeperkoetter asked?
Steelman responded. “If you hire illegal workers, it’s illegal,” she said.
Ramsel urged the board to consider the action carefully, because Hennessey had sold the tax credits on the secondary market to another buyer, in this case, Safeco Insurance. And if the MHDC chose not to pay out the credits, it would scare away the investors that fund the low-income housing projects the tax credit program is supposed to fund.
“We are very concerned that if we don’t approve the credits, that we will be sending a message to the investment community … that their credits can be” pulled at a later date, Ramsel said.
The commission’s attorney had asked the board to consider discussing the issue in executive session, but the board voted against it.
Bail-out the Carpenters and Electricians….They’re legal…I’m tired of businesses holding their hands out for tax dollars. Nothing is more socialists…except for the free-market free-loaders who think unions are against capitalists….We found the enemy. They’re not union freindly. How much more do taxpayers have to give to corporate America?
Bail out!
Hennessey Development contributed to Hulshof’s campaign for governor. Steelman voted against their tax credits. And the other two who voted against are Democrats. Probably all just a coincidence, though.
Sure Nick, it is DEMOCRATS in Missouri using immigration as a wedge issue. The Commission has been on their rampage from long before there was an opening for governor, when Sarah was happy being treasurer & Hulsof was comfortable in D.C. Get clue.
Clueless = Nick. Nough said.
The article states a key issue, “Last year, the housing commission passed tougher rules which force developers to prove their workers are legal.” Hennessey was approved for the credits, sold the credits, and is now being punished for the subcontractor’s use of illegal immigrants of which the tougher rules were put in place at a later date than the hiring and use of such workers. It appears that this is a political scandal and another issue which must be considered is if the workers had valid identification and papers, which we know is possible, how is it that the developers are being punished? If the contractor/sub-contractor followed the standard procedures of hiring workers, it is unfortunate to think that MHDC may be using this for political advantage at the risk of the investor(s) and developer involved.
I think the problem is that there is no way to check to see if a person is illegal or not .In the case of Southernside the state has had all the I-9 forms submited by all the contractors on the jobsite for two years and has not been able to say for sure that anyone was illegal,but expects Hennessey to know who’s illegal when someone shows up on the site.The city of Ofallon didn’t even try to find out if anyone was illegal by comeing by the site and talking to anyone on site or even checking I-9 forms to see if they were valid. But they show up and yell ILLEGAL. If the city and the state can’t find out if someone is illegal how can they hold tax credits because a developer can’t find out if someone is illegal.