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Maryland Heights sues to resurrect flood plain TIF

Maryland Heights sues to resurrect flood plain TIF

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Missouri Highway 141 closed

Workers with the city of Maryland Heights and the Levee District build berms out of gravel on Wednesday, June 19, 2019 to hold back flood waters alongside Missouri Highway 141. The highway is closed on both sides from Creve Coeur Airport Road to Creve Coeur Mill Road due to flooding from Creve Coeur Lake. Photo by Colter Peterson, cpeterson@post-dispatch.com

MARYLAND HEIGHTS — Officials here want another chance to use tax subsidies to spur development near the Missouri River and have crafted an unusual argument in their attempt to do so.

They filed a lawsuit on Friday challenging the validity of the city’s tax increment financing commission, which blocked the development last month. In the suit, they argue the commission was improperly set up, because the law that governs it refers to a county with 1 million residents — and the county isn’t that big anymore.

The TIF commission voted 7-5 in January against as much as $151 million in subsidies to pave the way for building here on 2,000 acres of farmlands and green space long eyed by developers.

The proposal was heavily criticized by environmentalists for seeking to develop in the historic flood plain, now protected by the Howard Bend levee. All six commissioners appointed by St. Louis County Executive Sam Page opposed it.

The vote effectively blocked the use of TIF in the area, thanks to changes made to the state law meant to control municipalities’ use of the tax incentives. TIFs let local governments and developers use tax revenue generated by new development to finance projects.

January’s vote was one of the first instances of St. Louis County appointees blocking a city’s TIF plan. Page told the Post-Dispatch last month that “the use of TIF for green space should be rare.”

A study from the regional planning arm East-West Gateway Council of Governments found $729 million in tax money was diverted to TIFs from 1987 through 2015. Rather than generating new economic activity, it often shifted it among the region’s municipalities competing for tax revenue.

To help control the municipal competition, the Missouri legislature amended the TIF law in 2008 to give St. Louis County and others in the St. Louis area the power to appoint half of the members of a TIF commission. Affected school districts, reliant on property taxes, get two members on those commissions and other affected taxing districts get one. The municipality only has three members on those commissions.

But the lawsuit Maryland Heights filed last week says it should have gotten half the appointments.

The issue is in the way the law was written: It doesn’t refer to St. Louis County specifically — it mentions a county with over 1 million inhabitants.

St. Louis County’s population dipped slightly below that mark in the 2010 census, to 998,954 people. It was estimated to be about 997,000 in the U.S. Census Bureau in 2018.

Maryland Heights argues in its suit that, because of the dip in population, the 2008 TIF reforms don’t apply to St. Louis County.

In 2017, the state Legislature tried to clarify the language of the law, and avoid arguments when county populations change.

But Maryland Heights, in its suit, says that change can’t apply retroactively.

In 2018, the administration of former St. Louis County Steve Stenger appeared to foresee such a legal challenge in another controversial TIF proposal: Novus Development’s proposed Costco-anchored shopping center in University City.

The Stenger administration asked University City to propose three of the county’s six appointees to that TIF commission.

“We’ve just tried to avoid the argument because of a poorly worded state law,” Stenger adviser Tom Curran said then.

On Wednesday, Maryland Heights Mayor Mike Moeller said the city wouldn’t comment on pending litigation. A spokesman for Page also declined to comment.

Jamie Gilley, a member of the group Maryland Heights Residents for Responsible Growth who opposed the plan and is running for city council in April, called the lawsuit “another example” of officials acting against taxpayer interests.

“They have been met with significant opposition from residents and environmental organizations who have spoken loudly against irresponsible development especially in historic flood plain areas and with the use of a TIF,” she said.

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