In the wake of the Flood of 1993, a tall order came down on the leadership of Chesterfield Valley:

Build a massive, $58 million levee system. And do it without any current city tax dollars through a levee district with a mere $125,000 in 1993 revenue.

Despite the funding obstacles, Chesterfield Valley's leaders have succeeded in raising their once-broken Monarch Levee to the brink of 500-year-flood protection.

To achieve that, they've turned to an intricate funding system. They centered it around a tax increment financing plan that has already been responsible for more than $55 million in construction work.

By doing so, they've also set themselves up for more criticism from the same forces who opposed the very idea of redeveloping a flood plain.

Allan Sheppard, a former city councilman, equates the TIF to subsidizing the more than $300 million in private investment that has been drawn to Chesterfield Valley since the flood in 1993.

Instead of funding the levee improvements through public dollars, Chesterfield Valley should have asked new businesses to pony up the money, Sheppard says.

"We should never let developers take advantage of us like this," said Sheppard, a frequent critic of Chesterfield Valley building projects. "I believe in the free-market system. If the developers want a levee, fine, let them pay for it. But don't make us pay for it through a TIF."

But many in Chesterfield Valley believe developers never would have descended on the valley without a system of fund raising for the Monarch Levee and related improvements.

Dick Hrabko, director of Spirit of St. Louis Airport and a Chesterfield city councilman in the early 1990s, said Chesterfield had tried unsuccessfully to recruit retailers to the valley for years before the flood. Then, after the TIF plan was in place, retailers arrived in droves.

Hrabko also defends the TIF by citing one of the main requirements for creating a TIF district: blight.

"You want to see blight. I'll show you blight," he said. "That valley was blighted after the flood."

The TIF district was set up in 1994. But it wasn't until 1999 - when Wal-Mart and Lowe's came to the valley, leading a storm of big-box retail development - that work on the Monarch Levee and other related projects really took off.

About $29 million worth of work was fronted by THF Realty, the developer of Chesterfield Commons, the mega-strip mall that Wal-Mart, Lowe's and other retailers call home.


THF needed the higher levee to attract national retailers. The developer also needed a new exit ramp off Highway 40 so shoppers could get to Chesterfield Commons.

So in a 100-plus-page agreement with the city of Chesterfield and the Monarch-Chesterfield Levee District, THF - which stands for "To have fun" - agreed to put up the $29 million.

That covered raising a large chunk of the Monarch Levee, constructing the Boone's Crossing interchange and building a new section of Edison Road, east of Long Road.

When the pot of TIF revenue was eventually fattened by taxes on Wal-Mart and other retailers, THF Realty was reimbursed.

Here's how the TIF works:

When a TIF district is created, the amount of property and sales taxes generated on that property is frozen. Then, taxes collected on subsequent development are redirected to the TIF fund. The money in the TIF fund is then used to build infrastructure and other items related to developing the area.

In the case of Chesterfield Valley, developers like THF Realty and other groups, such as the Monarch-Chesterfield Levee District, paid for projects with the thought that they'd later be reimbursed if enough funding were generated through the TIF.

The levee district spent some $20 million on raising the levee, creating wetlands areas and other projects; the city of Chesterfield has spent $5.7 million. Most of the money for those projects was reimbursed by the TIF.

The amount of TIF revenue available for such projects has grown quickly over the past five years, as more retailers and other businesses have opened shop in the valley. This year alone, city officials said the TIF will collect $10.6 million in revenue. That amount is expected to reach more than $20 million by 2011.

Other major financiers of the levee system have been the levee district, through its own growing budget, and the federal government, through the U.S. Army Corps of Engineers.

The corps agreed to fund the project in 2000 after more than seven years of study. Although the corps has yet to spend a dime on construction, it's provided money for reports and planning, and expects to fund building projects within the next few years.

David Human, a lawyer with Husch & Eppenberger and the administrator of the levee district, said about $20 million in levee-related work is left for the corps. The corps will not be reimbursed through the TIF.

The growth of the TIF has many critics of the valley's development wondering whether Chesterfield needs any federal funding help at all.

Rick Hansen, a biologist with the U.S. Fish and Wildlife Service, has watched the process by which the levee district has secured federal funding.

Normally, he says, when a group asks for Corps of Engineers' funding, it waits for an answer before beginning a project. In this instance, the valley's leadership proceeded to build much of the levee, hoping that the federal government would eventually agree to foot the bill for the final high-cost items.

But by doing so, Hansen said, the valley has shown that it could fund the entire project without corps' help.

"That would be an easy way to save federal taxpayers a lot of money - to build their own project," Hansen said.

For Sheppard, the former city councilman, the large problem is the TIF.

"The builders should have paid (the city) to come here, rather than us paying them," he said. Sheppard believes that developers would have still come to the valley, even without the TIF to entice them.

Rockwood supported
TIF then and still does


Critics also say the TIF diverts tax revenue from entities like the Rockwood School District.

But Rockwood officials supported the TIF when it was passed in 1994 and still do.

"If that TIF wasn't there, none of the development would have come, and we wouldn't be getting any of that revenue anyway," says David Glaser, the school district's chief financial officer.

And because the TIF has generated funding so quickly, Rockwood will begin receiving dollars from the TIF starting this year. It will come in the form of "pass-through" payments, or extra revenue not needed for infrastructure.

While the district will get less than $200,000 this year, that figure is projected to rise to more than $1 million a year by 2017.

Supporters of redeveloping the valley also say their TIF stands out from others because it doesn't funnel revenue to projects that solely benefit one developer. Instead, the infrastructure built by the Chesterfield Valley TIF benefits the entire valley.

"This is the cleanest TIF in St. Louis County," said Tom Shaw, a longtime valley real estate agent.



Reporter Eric Heisler:
E-mail: eheisler@post-dispatch.com
Phone: 314-340-8183