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Wentzville shopping corridor exposes new Kroenke conflict

The bulk of the Wentzville Crossroads Shopping Center, anchored by a Walmart at 1971 Wentzville Pkwy, bustles with activity on Tuesday, Sept. 10, 2019. THF Wentzville Development LLC, a company affiliated with Stan Kroenke, owns the property containing Walmart and several others retailers. Companies connected to Kroenke are forcing shoppers at competing, adjacent businesses to help finance a new $30-plus million big-box development planned nearby by Kroenke lawyers Alan Bornstein and Jeffrey Otto. It represents an unusual arrangement that the city signed off on to help it build a $38 million rec center. Photo by Christian Gooden,

WENTZVILLE — Less than two weeks after filing it, a property owner has dropped a lawsuit challenging a special taxing district set up to finance a competing retail development and a new city recreation center.

On Monday, the Desco Group, which owns the shopping center anchored by Schnucks on Wentzville Parkway, filed a motion to dismiss its lawsuit challenging the creation of the Wentzville Parkway Regional Community Improvement District. Its suit, filed Oct. 4, said it did not receive proper notice prior to the CID’s creation and a vote by property owners on a special sales tax.

“There was no settlement between the parties and the (Desco) property remains within the CID boundary,” Wentzville City Administrator David Gipson said. “This case was simply dismissed with prejudice due to the proper provision of all required notices during the CID formation process.”

The city provided copies of certified mailings that it indicated proved proper notice was given to the property owners within the CID, as required by Missouri law.

Capes Sokol attorney Amy Fehr, who represented Desco, did not return a request for comment. She had previously said it was “evident that this Community Improvement District was not lawfully created.”

Under a deal blessed by the Wentzville Board of Aldermen in a series of meetings over the spring and summer, the new CID includes the big-box shopping centers along Wentzville Parkway. It would use 40% of the proceeds of a 1% tax to help pay down debt financing $23 million worth of site work for Wentzville Bend Development LLC, a company connected to Stan Kroenke lawyers Alan Bornstein and Jeffrey Otto of the Dentons law firm.

The company plans to purchase undeveloped farmland and turn it into a big-box development that plans indicate would include a grocery store. The local union representing grocery workers at Schnucks and Dierbergs — both of which are included in the CID — has complained that the deal forces shoppers at those stores to finance the local grocers’ competition.

Because companies affiliated with Kroenke own most of the property on Wentzville Parkway, they were able to muster the majority of property owner support required to form a CID and impose a special sales tax. Schnucks and Dierbergs are in shopping centers owned by non-Kroenke entities.

The other 60% of the CID tax would support an estimated $38 million in debt issued to build a new recreation center on undeveloped farmland between William Dierberg Drive and Wentzville Parkway. Aldermen have said it was the only way to finance a new recreation center anytime soon in the fast-growing suburb on the edge of the metro area.

CIDs and their special taxes, often unnoticed by shoppers, have proliferated throughout Missouri in the past 20 years as property owners established some 400 of them. Sometimes they’re used to pay for marketing, cleaning or security services in commercial districts such as downtown St. Louis. That often means winning the buy-in of a variety of property owners and support from residents of the area.

But developers also set them up on their own properties, using the sales tax to finance their projects. Even then, they typically only tax their own shoppers.

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