PAGEDALE — A nonprofit developer is nearly finished building out another block of this north St. Louis County suburb, a 10-year-old project that has turned a derelict intersection into a bustling commercial corner.
The nonprofit, area developer Beyond Housing, is wrapping up a food hall and gym next to the grocery store, bank and movie theater the organization has already developed at the intersection of Page and Ferguson avenues.
“One of the reasons why we did the food hall is the community told us over and over again there’s no where to eat, no where to sit down and have a meal,” said Beyond Housing CEO Chris Krehmeyer.
The new construction is the latest phase of Pagedale Town Center, which has slowly added amenities. First came the essentials: a Save-A-Lot grocery store a decade ago, then a Midwest BankCentre, plus health care centers run by Affinia and BJC. Perhaps most well-known is the 24:1 Cinema, which opened in 2015.
But as Beyond Housing works on the fourth phase of the project, it’s not getting a helping hand from the Missouri Department of Revenue. The department denied a request in 2019 from the nonprofit for a sales tax exemption on construction materials for the project.
Beyond Housing, which focuses its work in municipalities that make up the low-income Normandy School District, has always received sales tax exemptions for itself as a civic organization. But for this project, it applied as a charitable organization so it could utilize a sales tax exemption for construction materials its contractors purchased for the new building.
The state argued Beyond Housing focused on just one geographic area and was thus a “civic organization” that didn’t qualify for the sales tax break on the construction materials. Beyond Housing appealed the state’s decision, and last month, the nonprofit won before the state’s Administrative Hearing Commission. The administrative hearing commissioner, Sreenivasa Rao Dandamudi, disagreed with the state’s argument in no uncertain terms.
“Obviously, Beyond Housing performs civic activities,” he wrote in his March decision. “It has developed buildings, solicited businesses, repaired sidewalks, and built parks. But the scope of these activities does not preclude it from charitable status. To the contrary, the broad scope of its activities is the reason it excels as a charity, and we will not punish it for its successes or inhibit it from fighting the social ills of poverty.”
The state is still fighting the exemption. It appealed the ruling on Monday, asking the Missouri Supreme Court to review the decision.
It’s unclear why the state has fought the organization’s efforts to qualify for a sales tax exemption on the project. The ruling could have wider implications on other nonprofits.
But it also appeared state attorneys have a dim view of Beyond Housing.
According to the hearing commission, lawyers for the revenue department “attempted to advance unpled allegations that Beyond Housing is not truly a non-profit organization (civic or otherwise) at all, but a payola scheme serving the private interests of wealthy donors.”
Dandamudi, in his decision, scolded them for the allegation. A spokeswoman for the revenue department did not respond to a request for comment.
Beyond Housing got its start helping with rental and utility assistance in the 24 north St. Louis County suburbs that make up the Normandy School District area. It also provides home loan programs, plus down payment and closing cost help to homebuyers.
It got into development to fill a need the private market wasn’t. Through its sister agency, the 24:1 Community Land Trust, it began purchasing real estate, including shuttered Normandy School district buildings in a transaction that gave a financial lifeline to the struggling district.
Over the years, it has worked closely with the area’s municipal governments. For the Pagedale Town Center development, it set up a tax increment financing district and used federal New Market Tax Credits to leverage investment in the corner the organization has slowly begun to turn into an area of community activity.
“None of this gets done unless it’s tax exempt,” Krehmeyer said.
The goal of the latest phase is to provide affordable space to grow area businesses, he said. The food court will be filled by Healthy Habits Smoothies, Three Vegan Brothers, and Goss’Up Pasta, a caterer and restaurant owned and operated by Quiana “Queen” Chapple for 25 years. A gym owned by former Pagedale police Officer Shameka Smith, Burn 365 Fitness, also plans to move into the new building.
Propel Kitchens, a nonprofit commercial kitchen affiliated with Key Strategic Group, led by former St. Louis Economic Development Partnership executive Erica Henderson, plans to open in the second floor space when the new building is ready this summer. Propel Kitchen plans to produce food for clients, including Three Vegan Brothers, while offering jobs and training opportunities for area residents interested in the industry.