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Guidelines for city of St. Louis development subsidies watered down

Guidelines for city of St. Louis development subsidies watered down

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Group protests Laclede Gas TIF package proposal

FILE PHOTO: Members of Take Back St. Louis protest a TIF proposal package by Laclede Gas on Monday, Oct. 28, 2013, outside the company's headquarters in downtown St. Louis. Photo by Christian Gooden,

Specific parameters outlining where St. Louis developers should receive tax breaks — and how large they should be — are still six months or more away, the latest delay in the city’s efforts to reform the routinely granted subsidies.

Prompted by growing concern that the cash-strapped city should have better guidelines for how it doles out incentives, the city’s economic development office and the Board of Aldermen’s Housing, Urban Development and Zoning (HUDZ) Committee unveiled a resolution establishing guidelines in June.

A measure setting those recommendations quietly passed the committee Wednesday.

But gone from the resolution were specific recommendations for the amount of incentives the city should offer based on the strength of a neighborhood. Instead, a far more general substitute was sent to the full board.

While the guidelines never would have been binding, economic development officials and aldermen had indicated they could help guide negotiations with developers and debate by city lawmakers.

The guidelines were supposed to serve as a stopgap measure until the city conducts a more in-depth economic development plan. But that proposal, too, has been delayed. Despite being a frequent topic during the mayoral election at the beginning of the year, St. Louis has yet to find funding for a citywide plan and there’s little indication it is close.

The resolution passed Wednesday simply expresses support for the general idea of approving less valuable incentive packages in strong areas and offering richer subsidies in struggling neighborhoods.

The original resolution cited a market value analysis conducted by the city’s planning department and said property tax abatement should be capped at five years at 75 percent of added value in the strongest three market value categories of the study.

In those areas, tax increment financing (TIF), which lets developers use increased tax revenue to finance a project, would have had a recommended dollar cap of 10 percent of the development’s value.

Alderman Joe Roddy, who chairs the HUDZ Committee and has pushed for the guidelines, had said he was holding up development subsidy bills in his committee until the language passed. But with several bills coming up that are “time sensitive,” he asked colleagues to move it out of his committee “with the idea there’s a lot more work coming on this.”

“It’s not as specific as I like, but unless I’m going to hold everything back, this is as far as I’m going to go,” he told the Post-Dispatch.

A more detailed analysis outlining the size and location of incentive packages based on neighborhood strength is in the works. But the analyst in the city’s short-staffed economic development office has said it could take another six months to complete.

The guidelines passed by the committee on Wednesday still contain recommendations against letting TIFs capture new sales taxes passed by voters or letting the city pledge tax revenue to TIF projects above what is outlined in state statutes, among other provisions.

The city’s economic development chief, Otis Williams, cautioned aldermen not to make the guidelines too specific “because we don’t have any deal that is the same.”

If his office crafts developer incentive packages beyond the guidelines, he added, “we will clearly make a case” why they’re necessary.

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